Category: Law Firm Strategy

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When the Phone Stops Ringing

What Big Law Figured Out – Part One of Four

The most dangerous threat to your firm will not announce itself. Clients will not explain why they move on. The work just stops.

Jae Um, legal analyst and founder of Lumio, explained this on the AI and the Future of Law podcast, hosted by Jen Leonard of Creative Lawyers and Bridget McCormack of the American Arbitration Association. In some practices, the phone simply stops ringing. You are left guessing. A client found a cheaper way and the work got done elsewhere. No announcement, no discussion.

One in-house counsel completed a $10,000 matter with a $20/month tool. The former law firm never knew. You cannot measure what you never received.

That is the nature of this threat. Missed matters go untracked, making the competitive loss invisible.

Most firms focus on visible work at risk: commoditized, high-volume matters with price pressure. But a bigger risk is work leaving the firm unnoticed. When clients handle legal matters elsewhere, no one notices until the pattern has continued for months. The key question is not where price pressure appears, but where work disappears before you see it.

The most exposed position, in my experience, is serving clients you barely know. If you do not truly understand these clients’ businesses, you will not spot a problem before it becomes a decision. When a $20/month tool is viable, the client weighs it against your cost. If your value is not clear, they choose differently. They will not say why; they will simply stop calling.

If clients are solely focused on price, the risk of loss is high. Lawyers must be able to communicate their value beyond just the price, including judgment, experience, track record in court, $ won, $ saved, reputation, creativity, references, etc.

A general counsel in Um’s analysis said it plainly: “If a firm isn’t cannibalizing its own inefficient billable hours, we will find a firm that will.”

Take that as a forecast. Clients already have alternatives, and they are signalling what happens if you do not act first.

Um described how this pressure arrives to a room full of managing partners in London. It never comes as one event. New business gets harder to win, and existing matters shrink. Realization rates slip, and it will be hard to say why.

If you are asking the right questions, you are already ahead. A Cleary senior partner advised: envision the business that would put yours out of business. This explains the threat faster than any market analysis.

For each major practice area, ask: how hard is it for clients to solve this another way? The competitor may not be another firm, but a $20/month subscription. If the honest answer is “not very hard,” that area is more exposed than you may be treating it.

The most at-risk work is process-driven: matters where clients with the right tool and some internal capacity can reach an acceptable result without you. Think work that follows a predictable process and produces a predictable result. The work least at risk requires judgment that the client cannot buy off the shelf, especially where the stakes are material and getting it wrong costs far more than the tool costs to try. Most firms have both: the question is whether you know which is which.

If your firm is smaller, you have a real advantage here. Close client relationships are an early-warning system, but only if you use them that way. Ask clients directly what they are handling without you. Learn what tools or services they are already using. Knowing this before you need it gives you time to respond.

This is not a cause for paralysis. The same disruption pulling work away from firms that are not paying attention is creating real opportunity for those that are. If you understand what you deliver and can make that case against the alternatives, you will be in a stronger position at the end of this period than you are now.

Don’t wait for silence to signal risk. Contact clients now and ask specifically why their needs are changing. Taking initiative to reach out demonstrates attentiveness, not desperation. Approach these conversations as opportunities to help clients with their challenges and reinforce your commitment to their success. Be proactive: schedule conversations, request candid feedback, and use what you learn to adapt immediately. The managing partners who do this consistently and directly are the ones who stay ahead of shifting client expectations.

This article is the first in my “What Big Law Figured Out” series, inspired by the AI and the Future of Law podcast featuring Jae Um. In Part two, learn how to design AI investment around a distinct competitive strategy, not by following others. Part three will walk you through essential foundations to put in place before any investment discussion. Act on these insights today to outpace competitors tomorrow.

Rethinking the COO Role in Law Firms

Law firms have always been led by lawyers. The senior partner was often both rainmaker and chief administrator, managing everything from finances to facilities. That model worked when the business of law was simpler and the competition was local. It no longer fits the complexity of today’s legal market.

It is time to rethink what this role should entail and who is best suited for it.

The Role of the COO

The main role of a COO in a law firm is to run the firm’s business operations. Partners’ time is best spent practicing law and building client relationships. Someone must ensure that the business runs efficiently behind the scenes.

The COO position includes creating the systems and discipline that enable partners to focus on client work. A strong COO connects the dots between finance, operations, people, and strategy. This relieves partners of this task and helps execute the firm’s goals.

The New Skills Required

The skill set for today’s COO has changed. Now legal COOs must be fluent in both management skills and technology. They must understand automation and AI applications that can streamline workflows and improve decision-making.

Strong COOs now act as translators between business strategy and operational execution. They can analyze profitability at the matter and client level. They can interpret financial and operational data to guide strategic investments. And they can communicate these insights to lawyers in ways that lead to action.

The most effective COOs combine four abilities:

  • Operational discipline to ensure the firm’s core systems run smoothly.
  • Financial literacy to create budgets and new pricing models.
  • Technology fluency to identify where automation and AI create leverage.
  • Leadership credibility to influence senior lawyers without authority based on title.

These abilities rarely come from the traditional legal path. That is why many of the most successful COOs in professional services come from finance, consulting, or technology backgrounds.

Why Some Firms Struggle to Empower the COO

Even when firms hire a capable COO, many fail to use the role effectively. In some partnerships, operations managers are limited to managing facilities, HR, or IT. This limits the COO’s ability to execute. Without clear authority, the role becomes reactive rather than strategic.

Empowering a COO requires the managing partner and the executive committee to treat the role as part of firm leadership, not support staff. The COO should sit at the table where strategic and financial decisions are made, with access to the same data and accountability.

The COO and Change Management

Law firms face rising cost pressures and technology-driven disruption. These challenges cannot be solved through individual effort or incremental change. They require systemic thinking, the kind that a professional COO brings.

A forward-looking COO can lead firmwide initiatives in areas such as:

  • Redesigning work allocation models that improve leverage and profitability.
  • Introducing firm-level KPIs and dashboards to measure performance in real time.
  • Managing AI adoption projects across practice groups.
  • Building training programs that develop “business of law” concepts among lawyers.

The goal is to help the Managing Partner execute on the firm’s strategic plan. The COO becomes the connection that links strategy with day-to-day execution. COOs can also take on many of the regular duties of the Managing Partner so that they can focus on higher-level firm strategy and leadership objectives.

What Law Firms Should Do Next

Every firm should begin by asking a simple question: What is our COO actually accountable for? If the answer sounds administrative rather than strategic, the firm may be missing an opportunity.

The next step is to align the COO’s role with measurable outcomes. Examples include improvement in profit per partner or percentage of work automated. These are results that move the firm forward and justify the investment in senior operational leadership.

Closing Thoughts

The modern law firm operates more like a business than a traditional partnership. Rethinking the COO role involves giving COOs more authority and accountability to give the firm a strategic advantage. This can also lead to non-lawyer COOs becoming CEOs or recruiting non-lawyer CEOs from other industries. Given the immense changes happening in the legal industry today, high-end professional management in law firms is becoming a must-have in order to succeed.

The Unseen Cost of Partner Misalignment

Law firms don’t often fail because their lawyers aren’t good enough. They fail because the partners aren’t on the same page.

Firms may look strong on paper if they are profitable and have good clients. But underneath, conflicting partner priorities and misaligned incentives slowly eat away at profits and stall innovation.

People often don’t notice this misalignment until it’s too late.

How to Tell if Your Partners Aren’t on the Same Page

When partners aren’t aligned, it shows up in small ways that affect both the way things work and the way people act. One partner is building long-term relationships with clients, while the other is maximizing billable hours. The result is that clients have different experiences and there is tension over how files are staffed.

Incentives that reward only billings or originations put partners in competition with each other, which makes it less likely that they will work as a team or share information. Leadership agrees on growth goals, but without support from all partners, strategic plans stay on hold.

The issue is not a deficiency of talent. It’s that the partnership is going in different directions.

The True Cost of Misalignment

Misalignment has a cost that can be measured in dollars. High-value clients go to competitors because the service is inconsistent. Associates leave because the partner they work for decides not to mentor and delegate. Partners don’t want to make changes that could hurt their pay, so investments in AI or changes to pricing models get put on hold.

Even small cracks in alignment can lead to lost revenue and a weaker market position.

Making Things Fit Together

To get everyone on the same page, firms need to deal with the things that really change how partners act. Compensation systems influence what partners should focus on, and they should reward working together and building client relationships. Plans must be directly linked to partner interests in order to be successful. If a strategy doesn’t make it clear how it helps each partner, it won’t get off the ground.

Firms need effective management that ensures decisions are made promptly and carried out. Without accountability, alignment quickly disappears. When these levers work together, partners start to pull in the same direction.

The Chance to Align

Aligned partnerships lead to huge benefits. Clients get the same level of service from every practice group and matter. Associates are less likely to leave because they get better training and mentoring. Partners see innovation projects as shared goals, not threats, which helps them move forward.

Alignment does more than just stop problems. It speeds up growth and profit.

The Bottom Line

The biggest threat to a law firm isn’t other law firms. It’s not being aligned inside.

When partners put their own goals ahead of the firm’s goals, strategies don’t work and innovation stalls. But when pay, strategy, and governance are all in line, the firm has a big advantage over its competitors.

The cost of being out of alignment is high. The benefits of alignment are even greater.