Community Table: The Difference Between a Manager and a PLA

Episode Notes

Transcript

Announcer:

This is Unbillable Hours community table with Clio, a monthly virtual round table where lawyers discuss issues their practices are facing and receive feedback from lawyer and law firm management consultant Christopher T. Anderson. Join the conversation live every third Thursday at 3:00 PM Eastern. Our first segment is an in-depth discussion between Chris and Rob about ps.

Christopher T. Anderson:

Welcome to The Un-Billable Hour. This is the community table, and my guest today is Rob Lietner, a fractional COO for several firms. Also works with my law firm and is our chief strategy officer. But Rob helps us with a lot of great stuff and is often gives me a different way of thinking about things and hopefully gives you a different way of thinking about things. And so the first one we’re going to talk about today is a question that’s come in regarding PLA professional law firm administrators, PLAs. Really where I wanted to focus today and the questioning was, was when does a firm need one and how do they know? And then what will they do for the firm? But let’s start, Rob, if you don’t mind. First of all, let’s just talk about what is a PLA? What is a PLA? What is it? Just generally writ large. I’ve said the words professional, legal administrator, professional law, firm administrator, but what’s really their job? Because some people get them confused with office managers, some people get them confused with COOs. Where do they fit?

Robert Leitner:

That is an excellent question. So as you said, and I actually encourage law firms to use this type of language when they put out classified and ads, the professional legal administrator or law firm administrator is not an office manager and it’s not a simple admin position, not to say anything wrong with either of those positions. This is a higher level, different positions. So that’s number one. Let’s break that out. In my experience, the PLA is typically divided into three areas. Number one, operations, number two, finance, and number three, human resources, hr. If you are lucky enough to find an experienced PLA who has expertise and experience in all three areas, it’s excellent and you should go for it as long as you can. The firm can afford it. Some of the lower level PLAs, we’ll have maybe two out of three of these skills and areas.

But not every firm needs operations, finance and HR expertise. So example, a firm may already have a controller and if the firm already has a controller, then when we’re interviewing PLAs, we don’t have to focus on finance so much. The PLA LA is sometimes thought of as a junior COO. The PLA exists normally in between the owners or managing partners and the rest of the firm. In other words, the other managers, they bridge the gap. They act as a conduit up and down. So the law firm owners and managing partners can get out of the weeds. They are also somewhat of a general manager. And reporting typically goes through the PLA. They’re able to take the pulse of the firm, they know the revenue, they know the profitability, they know where hiring, where the holes are, where the opportunities are, and they help implement tactical initiatives that are defined by the C-level suite.

Christopher T. Anderson:

Got it. So would you say as a firm continues to mature, if a firm continues to grow and they end up getting a controller or even A CFO and they end up getting an HR specialist and a COO, then the PLA role withers and dies, that role is no longer necessary because when the firm reaches the size where it can afford all three high level specialists, then you don’t need the PLA. But until that time, the PLA fills that gap for firms between where they can’t even afford A PLA and where they can afford the full C-suite. Is that about right?

Robert Leitner:

Absolutely.

Christopher T. Anderson:

Okay, cool. It is interesting. But those three skill sets don’t always come together, right? Operations is huge attention to detail within all the moving pieces of the firm. Finance is really a specialized skillset. Not everybody can read a balance sheet and tell you what’s going on in the firm. And then HR, again, totally specialized, requires individualized training and knowledge of the state’s rules and regulations. It’s a compliance role. So that helps to understand what A PLA does. No, you can’t get CLE for this folks. Sorry, what A PLA does. And I think when a firm outgrows it, so let’s start at the bottom end. How does a firm know? You said once if they can afford it, all three has a firm know when it’s time for A PLA because I think most people when it comes time to hire A PLA, probably believe they can’t afford it, but yet I’m sure your experience is much like mine. They need it and the belief they can’t afford it is fraught with problems because the PLA can actually introduce efficiencies and savings that will help to fund the role. So when does a firm need A PLA? How do they know?

Robert Leitner:

I sometimes refer to it as the law firm owner or the managing partner need a right hand woman or man to help run the firm and keep an eye out things. There are many firms that experience tremendous growth and they have really nice revenues and profitability, but the owners are still in the weeds. They’re still drastically involved with everything, with most of what’s going on in the firm. I find that the PLA literally fills the gap between the owners and the rest of the firm. As the firm grows, there are communication issues. There are a lot of channels, there’s a lot of noise, there’s a lot of responsibility. Physically there are more people and it just becomes a little too hard to keep an eye and manage the entire firm. That’s the point where you need A PLA. We don’t yet need A CEO perhaps, and we don’t yet need A CFO or A COO, but we’re getting close.

That’s why I often refer to A PLA as a junior COO. And you’re a hundred percent right. The PLA is an investment. So the astute law firm owner looks at it as an investment. The PLA will increase efficiencies, they will increase profitability, they will increase communication. Perhaps most importantly, they will increase the amount of time available to the law firm owners managing partner in whomever else. So then the law firm owner can engage in their highest and best use whatever that looks like. So what is the value of that time? And often I counsel law firm owners to think of it like this. Let’s just not think about how much we’re going to pay them per year and divide it by 12 and think about that as an expense. How many extra cases would we need a month to cover that expense? For most firms, it’s not a whole hell of a lot. And the amount of time that the PLAs are going to free up and the amount of efficiencies that they’re going to bring to the table more than compensate for the compensation.

Christopher T. Anderson:

Cool. So can we put a dollar amount on it? I think you put a lot of good subjective measures. When the law firm owners, as the firm is growing or finding themselves still in the weeds, they’re probably pulling their hair out, working long hours on a lot of administrivia that the PLA LA should and could take off their plate because they’re actually going to be better at it. But how do they know? When’s it time to pull the trigger? Or is there someone they should ask?

Robert Leitner:

Well, when they know something’s missing and they know they need help, and you’re not yet ready for C-Suite, any of the C-suite, you want a right hand person and you are engaged in the weeds too much and you don’t understand why we’ve grown the firm. We’re at four or 5 million, our profitability is 22%. Why the heck am I still involved so much with the day-to-day running of the firm? When you ask that question, that’s probably the time to hire A PLA.

Christopher T. Anderson:

It’s probably about a year late, I would guess, but yeah, fair enough. Okay, cool. I think that gives a lot of great hints on A PLA. So let’s start with the last question on that topic, just because when do they look, okay, we need one. They’re not in the yellow pages. Did I just date myself or anybody has the yellow pages? But even if you Google PLA, it’s like it’s not that easy. If you try to do this through Indeed or Monster or something like that. I don’t know how good a return you’re going to get. Where should they look?

Robert Leitner:

That’s an excellent question. I’d like to preface my answer first by saying the PLA LA does not have to necessarily come from the legal industry.

They can come from another service industry. The main thing is that they have experience running a business, reporting, being a general manager, evaluating accountability, all of those types of things. If they have that type of experience in a service business, it’s very easily adaptable to a law firm. As people who work in law firms, we tend to think we’re very special and we’re a unicorn. The industry actually isn’t a service business any other. We just happen to provide legal services. So to the point we to look, number one, keep in mind, not everybody knows what A PLA is, right? Well, what the heck does PLA mean? So when you’re putting a title out, if you’re putting a classified anywhere digital or non-digital, you have to really be careful about the title. A lot of times I recommend a law one, so professional legal administrator slash law firm administrator or something of the most of the time, you are going to have to go through a lot of resumes to find a nine or 10 out of 10 type of candidate using digital channels such as Wise Hire, indeed, LinkedIn, all them have been pretty good resources.

I also suggest using LinkedIn and searching. So it’s a push versus pull. Sometimes you go on LinkedIn and you type in some search terms and you scout someone out and you engage. I’m not saying you poach, but you engage to see if someone in your sandbox maybe knows of someone who would fit the bill. I would be very careful about the wording of the classified. So again, 3 million areas, operations, finance, and human resources. If candidates don’t need to be experts in all three, please don’t emphasize it because it’s difficult to find a candidate who really can fulfill all three roles,

Christopher T. Anderson:

But get clear in your own head which skill sets you’re looking for so that you attract the right folks. And also so you don’t get people that are going to be the other two, right? If I need ops and finance, but I’ve got HR covered, I don’t want a whole bunch of folks with HR expertise applying. So that makes complete sense.

Announcer:

In our next segment, an attorney is looking for advice for hiring a non-attorney salesperson.

Caller #1:

I’m in the midst of hiring a non-attorney salesperson to perhaps replace somebody. Sorry, Christopher, I’m going to try to say this so that it’s for the audience, but I think you’ll get what I’m talking about. I had a trusted business advisor interview my potential candidate. I need to figure out, I heard some things and I wanted to know what, based off the conversations that were discussed in this interview, I want to know what I should be looking for to whether to move forward or not move forward, whether it’s worth moving forward with this potential candidate. So I’m sure you need to kind of know.

Christopher T. Anderson:

Sure. What do you think you heard? And then we can go into what criteria you’re looking for, what criteria I might suggest you’re looking for.

Caller #1:

Okay. So what I heard in this particular candidate’s interview was that she wants to be involved in an organization that also serves a purpose and that she could be tied to a greater impact, and she has experience in my particular niche and my industry. That being said, her current position is really more about, I think really business development going out, the hustle, the interactions, the finding. She has to hunt for the person and then sell them and then have to do client management and bring them along, and then B, with them through their journey at her current firm. And her current firm is not a law firm, it’s a marketing agency. So that was a little bit, and I asked her and I said, look, this is a very different kind of position. A, they’re all inbound. Yes, you have outbound follow follow-ups, but it is a desk job.

And she said that she’s mulling over that. That’s not an impediment to her proceeding. She’s mulling over, but she appreciated the fact that I raised that issue. She’s still very much interested. And so that’s what I heard. And I don’t know, I guess if I’m being cynical and skeptical, I didn’t hear a lot of details on how she could close a client. I didn’t hear a lot of that. Although she says she can, I didn’t hear a lot of specifics about at her current firm. She’s closed. 80% of the people that she brought in, I didn’t hear. And also the comp that she said she wanted concerns me because nobody in my particular organization has hit it, and I don’t believe that the current way it’s structured, that’s not true. I would have to revamp the comp structure in order to even have her to have a chance to hit it.

Christopher T. Anderson:

Okay, so several things there. Let’s start at the first. She likes to be with something that serves a purpose. I mean, quite honestly, as far as I’m concerned, you can’t ask for more than that. Listeners to the show or people that have worked with me have heard me on offense say that salespeople, good salespeople tend to be coined, operated. What I mean by that, it might sound a little pejorative, but it really isn’t. It means that most salespeople love the Chay ching when they conclude a transaction, when they get the job done, and that will drive them most salespeople for a good long time to produce what you want them to produce, but someone who’s doing it because it also serves a purpose, is going to step up a whole nother level, which is just, it’s not trainable, but it’s searchable, right? You can hear it when you’re interviewing people, and it’s something to latch onto because if they’re also serving a purpose, then they’re also going to do a great job on the losses.

They’re also going to do a great job of representing your brand regardless of how the sale is going. One of the problems with truly coin operated salespeople is that as soon as the sale is clearly cold, they will drop it like a hot potato. That’s a terrible mixed analogy, but they will get off the phone as quickly as they can. And one of the things that I try to stress with my team, and I actually give my people that work for me in various sales organizations, I always give them away to earn something when the prospective client does not close. And a lot of people look at me like, you’re absolutely nuts. You pay your salespeople to not close. And the answer is, you betcha every single, not every single time you betcha. I always make that available to them. Why? Because my philosophy is that sales is not about convincing people to do something.

And I tell my salespeople, no matter what organization they’re in, that sales is not about convincing anybody to do anything. Sales is education, sales is a service, and sales is a calling. So when I say that they’re coin operated, I give them a way to put a rock into that can when they don’t sell. And someone who’s serving a purpose is going to find that making a whole lot of sense. So how can they do that? Well, one mechanism is that if the client or prospective client, even though they don’t buy, leaves the firm a five star review on Google or Yelp or somewhere else, they can earn that way. And then sometimes, depending on the line of business, there might be other ways because there’s other ways that clients can become, or prospective clients, even though they don’t buy, can still serve the business.

Will they give us a quote? Will they give us a testimonial? Will they talk about how wonderful the process was and how much we care? Anything like that helps, quite honestly, a lot more than a single sale. So I make that possible. So a person feels like she wants to serve a purpose, fantastic that their background is business development, not sales. I don’t have a problem with that. That is not a negative to me. What I wanted to talk about there was that is what kind of sales skills am I looking for? Because if you’re a business developer, you’re in sales. So what are we talking about in sales? I just said the goal is I missed my opportunity there, so I’m going to take it now. I said, the goal is not to convince anybody to do anything. So then what is the goal?

The goal is to give the prospect enough information, enough context to connect with their particular situation sufficiently that they can make a decision whether or not to work with you or whether or not to pursue their goal at all, which would also mean not working with you if they decide not to pursue their goal. So if they have four choices, pursue their goal with you, pursue their goal without you, don’t pursue their goal and remain an indecision is the fourth one. And sales is about eliminating the fourth one. If they know that they’re going to pursue their goal with you, pursue their goal without you not pursue their goal, you’ve done your job, you’ve educated them enough to know and to make a decision. Sales is the sale is complete, and you have provided them enough information to move forward so in biz that they’re doing that.

And then what kind of salespeople do I look for? I much prefer people on my teams, even though all my teams sell services, that sales, the salespeople we hire are actually experienced in selling products. The reason for that is that most service organizations sell poorly and lazily. Let’s just put it that way. Why? Because it’s a service. So it’s much easier for me as a salesperson when I’m talking to the prospect, to listen to the prospect. And then when the prospect says, yeah, what I need is this thing that you don’t do, it’s much easier for me to come to you and go like, Hey, Bob, who I just spoke to. He needs our services, but he needs them this way that we don’t do as a service organization. We live to serve. So we will try to find a way to do that. And what happens is we introduce workflows, we introduce ways of working that break our team, that break our factory, that break our flow, that we’re doing things that are bespoke all the time.

When we get people who are used to selling services, they’re used to the service being malleable, and so they fit the service to meet the client. Now, that sort of sounds kind of nice. Oh, we fit the service to meet the client. Isn’t that great? The answer is no, it’s not because it makes our business very inefficient, makes our business work poorly for the client, and it leads to poor client experiences because nobody on the team is really secure in delivering the service in this new way that the salesperson did. Now, if you sell widgets, for those of you in Radioland, I’m holding up, well, you can’t even see it. I’m holding up a pencil. If you sell pencils, then you as a salesperson are going to learn to help the prospect see how a pencil can work to solve their problems. Not a pen, not a paintbrush, not a pricked finger.

It’s a pencil because that’s what you’ve got. And so salespeople who sell products are used to conforming and helping the client see their future using a pencil, using the product that we’ve got available. So that’s why I prefer whenever possible to work with people who have sold a product and not a service. You then discussed what you heard was that you didn’t hear her particular close rate, what her close rate was. What I would caution you is that if you had heard that to be very, very careful with that information, had you heard that, what you wouldn’t have heard is what the quality of the leads were, what the environment was, what the typical close rate was, where this person was in their team, and most of all, how that would translate to your business. The answer is you have no idea. And so I would always take that kind of information with a grain of salt.

Little bit more important is information about how they did in relation to the rest of their team. Were there contests, were there awards? Were there comparisons? Were there comparators that they can translate and say, yeah, we were expected to perform X and I did Y, which was better on a regular consistent basis. Does that show they’re a better salesperson? No, it actually does not. What it shows is that they strive that having a goal in front of them is something that is important to them and that they will strive to capture it for whatever reasons. And I would ask, if I’m interviewing that kind of person, I would ask, why did you beat that? Why was that important to you? Why are you telling me? Why is that important to you? How do you see that translating in my business? And then finally, you talked about comp structure and that we’ll go back to the coin operated.

It’s important to understand what the total compensation they are looking for with you. And don’t limit it to just money. Maybe part of what they need is some stability. Part of what they need is something that’s nonfinancial insurance, shorter commute, whatever it might be. But then once you get there, when they tell you what they want to make, one of the key questions is, is that the most you’ve ever made? What are you making now? But not just what are you making now, but is that the most you’ve ever made? Because that will give you a key piece of evidence that even this person doesn’t know about themselves, which is unless they’re really, really at the beginning of their career, the most they’ve ever made is the amount they worked to make that they were motivated for whatever motivates them to make. And there was honestly nothing stopping them from making 5% more than that, 10% more than that, a hundred percent more than that.

Nothing at all other than they didn’t want to. And then you’d never get into that argument, tell you they did want to or they would’ve if it was available or if it was possible or whatever else. But the truth is, well, maybe they should have found another job, but you can’t rely unless there’s some really impactful thing going on in their life that they suddenly want to make more money than the most they’ve ever made. Now, you as a leader of their business can help them want to over time. And so they don’t have to get locked into where they are forever. But that’s what you can expect for them in the short term is that’s where they will work to, and that’s where they will stop. And so if a person, if you’re interviewing says, in my current role, when I won President’s Circle or Chairman Circle or whatever, each business, those are the most common two names out there. I would say, well, when you did that, how much did you make? And is that the most you ever made?

Caller #1:

I don’t know if we can ask that period, but I can circle around the dream

Christopher T. Anderson:

Dave raised. You could say, would you like to share with me your compensation needs? Have you ever made that before? Is that the most you’ve ever made? I think you can. And if they choose not to share, that’s fine. You don’t press it. But you say that because I want to design this comp to meet your needs, and I don’t want to guess, and there’s nine different ways I can skin the cat with this role, and I want to make it work for you, because then of course, I’m going to have to make it work for me. And if those two lines don’t meet, they don’t meet. But that’s what we’re going to try to do. And then you make sure that when you design the comp structure, that the person on that comp structure meets your goals for that role right before they meet theirs, because otherwise you have no reason to believe that they’ll stretch to meet yours.

Caller #1:

Yeah.

Christopher T. Anderson:

Does that help it serve what you were asking?

Caller #1:

I think so. And I like the fact that even if she’s not going to, she’s going to work towards, I have wiggle room. Realistically, what I know she can do after training, she’ll probably get there quick, but then she’s got some room to go up to what she’s only made in the past, which isn’t too farfetched. It’s actually within reach, which I like that space because it’s not like, oh, I used to make 300,000. I’m like, yeah, that’s probably, I mean, it’s probably never going to happen at this level of where I am at the firm currently, but if we’re talking between 80 to 1 25, we are on the same ballpark.

Christopher T. Anderson:

You could make $300,000 in a sales role at your business.

Caller #1:

Yes,

Christopher T. Anderson:

I could make $300,000 in a sales role at your business.

Caller #1:

Yes.

Christopher T. Anderson:

So don’t sell everybody short.

Caller #1:

I got it.

Announcer:

Our last segment covers Christopher’s thoughts on the differences between wealth and money.

Christopher T. Anderson:

Wealth versus money. Paid search is a good source of money. The ROI is starting to suffer, but it’s still a good source. If you need to go generate some new leads tomorrow, paid search is the best place to go, and it’ll start slow. Don’t get me wrong, you’re not going to get a flood of leads tomorrow, but you’ll get ’em quick. But as soon as you turn off the money, the you’re paying to the paid search and two, your vendor, the leads, I promise you, the leads might not ramp up immediately. They will stop immediately. That’s the nature of money. So that you’ll get quick money, but you’re not building wealth. You’re building a quick fix. How do you build wealth? Referral sources, SEO. These are things that if you stop doing them, like if you stop putting energy into building your referral network today, it won’t dry up tomorrow.

It’ll dry up over time. But you build something that keeps on paying you even after you stop investing. SEO, same thing. You can’t listen. You can’t go from brand new website to SEO leader in a month. It’s just not going to happen. It’s something you’re going to have to, you can make a lot of big changes early on, and you can make a difference. So don’t get me wrong, do the content, do the videos, do the understanding how to describe things. Work with an SEO provider who knows how to get you bank back links and help your web domain authority, but it’s not going to be fast, and some things just take time, but you’re building wealth because if you stop doing the SEO, the leads won’t dry up tomorrow or the next day. It’ll, over time, they will as things get stale. But you’ve got wealth. You’ve got something that, again, is providing and paying you back over time.

Announcer:

Thank you for listening. This has been Unbillable Hours. Community Table with Clio on the Legal Talk Network.

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