Of the 30 firms you polled for this research, do most now have a COO or equivalent?
No. 12 do, 18 don't.
Is this number on the increase?
Yes. We have seen firms hire COOs for the first time recently and others enquiring about the role. It is not the natural evolution for all but it often works if, of course, you hire the right person and there is clarity on who does what and who reports to whom.
Where firms have a COO, do all the other support directors report to them?
Out of the 12 law firms that have a COO, five do but that leaves seven where some functions report in to the COO and others don’t. Often there is an historical reason for alternative and ‘carved out’ reporting structures. If a firm is hiring a COO role for the first time they may take into account the seniority and ability of their existing functional director team and recruit a certain type of person to fill the hole/skills base they feel they have left.
And sometimes it is a just a good old-fashioned fudge. If law firms ever wanted a diversification route then fudge production could be it. As my ex colleague, now spookily a law firm COO himself, once said of a law firm structure: "It is a fudge of Cornish proportions." Anyway, I digress…
Do law firm COOs all have finance backgrounds?
No. Most do but the number is decreasing. Examples exist of human resource, IT and marketing and business development directors moving into such roles, often through internal promotion.
We can think of five HR director to COO moves, although not all in this band of firms. But it is on the increase and that is great. As HR directors have got more involved in business decisions over recent years their contribution seems to have been noticed and valued.
Statistically, though, most COOs are accountants and the role will always require someone who is strong on the numbers side. An MBA often helps bridge the finance / non-finance divide.
In firms with no COO, does the finance director have other functional areas reporting into them?
Sometimes, though not often: three examples out of the 18 to be specific. In two firms, facilities reports to the FD, in one firm, IT reports to the FD. The other firm has someone who heads up marketing/BD and finance. In the vast majority of firms (27 out of the 30 firms researched), finance sticks to finance whether the firm has a COO or not.
Are we seeing COOs and FDs coming into the sector from outside of the legal industry?
Yes, gradually, and particularly from the big four accounting firms. However, they are sometimes from the wider world of business: yes, rumour has it there is a whole wide world outside of professional services partnerships!