Best Practice Tips: Firm Administrator vs. Director of Administration or Chief Operating Officer

Asked and Answered 

By John W. Olmstead, MBA, Ph.D, CMC

Q. Our firm is a 14-attorney firm in south Florida. I am the senior member of a three-member executive committee. Our firm is in the second generation of partners. The founders retired five years ago. Upon their retirements, we changed our governance from a managing partner to an executive committee model supplemented with an office administrator – some refer to the position as the office manager. Our executive committee model has worked relatively well. The administrator who we hired five years ago is still in place, but we are not satisfied with his performance. We believe that this is in part due to the fact that our expectations have changed. When we hired him, we thought that we needed an office administrator primarily to manage the office staff, billing, and the bookkeeping. So we hired an administrator who had an associate degree in accounting and had worked as an office manager in an eight-attorney firm for two years. He has done a good job managing the staff, billing, and the bookkeeping. However, we have now discovered that we want more – we want executive-level leadership. We want someone who is respected by all the attorneys and can:

1. Provide overall leadership
2. Help lead the executive committee
3. Develop creative solutions to problems
4. Lead the associates
5. Serve as marketing director, etc.
6. Take the lead in strategic planning and implementation of the strategic plan

I welcome your thoughts and opinions.

A. Yes, your expectations have indeed changed. Your administrator has not been able to grow in the role due to expectations that you now have for the position, and he does not have the education or experience to meet your new demands.

My observations are as follows:

1. You would like your administrator to act and think like an owner/partner.
2. You would like your administrator to be a quick learner.
3. You would like your administrator to provide a higher level of management insight and bring business training and experience to the table.
4. You would like your administrator to be accepted as a peer by all the attorneys in the firm.
5. You would like your administrator to be innovative and willing to question the status quo.
6. You would like your administrator to provide recommendations concerning new methods for improving the firm’s operations and profitability.
7. You would like your administrator to be able to resolve most administrative issues with minimal guidance from the executive committee.

I believe that you would like an administrator to serve more in the role as a director of administration or chief operating officer, and your present administrator simply does not have the education, experience, and maturity to function in this capacity. If you want someone to serve in this capacity, you will have to hire someone with degree credentials – such as an MBA or CPA – that will facilitate the candidate’s acceptance by other attorneys in the firm as a peer professional, as well as provide the candidate with the academic tools needed to carry out the expectations of the position. In addition, you need to hire someone who has 10 years or more experience as a director of administration or chief operating officer in a similar size firm or company – preferably a firm that provides professional services such as a law firm, accounting firm, engineering firm, etc. You will have to look beyond the titles that candidates have had and inquire into the specific duties and roles performed. You will need to back up this inquiry with solid reference inquiries.

A director of administration or chief operating officer position is rare in a 14-attorney firm. Many firms your size have administrators or office managers similar to the office administrator that you currently have. The downside to establishing such a position in your firm will be the salary that you will have to pay – more than many of your attorneys and even some partners are being paid – and turnover in the position when an opportunity from a much larger firm comes along.

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John W. Olmstead, MBA, Ph.D, CMC, (www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics and author of The Lawyers Guide to Succession Planning published by the ABA. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact John at jolmstead@olmsteadassoc.com.