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January 24, 2013

Legal MBAs are tough. But are they useful?

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For a long time, law firms have realised the importance of giving their senior associates and partners training in business and leadership skills. But more firms have started to introduce business training at more junior levels, with compulsory MBA-style programmes appearing for graduates, trainees and associates.

Some firms, for example, have started delivering MBA courses for graduates in partnership with external suppliers, aiming to get them on the right commercially-minded track before they’re even qualified. And an increasing number of larger firms are delivering bespoke MBA programmes to junior lawyers internally, from their own impressive sounding ‘business academies’.

With law firms always keen to keep up with their competitors, be sure that others will follow. And if they don’t, ambitious associates may feel compelled to seek out an MBA anyway – if only for fear of the business ‘experts’ coming up through the ranks. Increasing numbers of lawyers are already known to be signing up for traditional or legal-practice MBAs in their spare time.

But is this really the right development for law firms or lawyers?

Did MBAs cause the GFC?

There is a growing argument, for instance, that the traditional MBA isn’t quite what it’s been cracked up to be. The MBA has topped the business management charts for some years. According to Forbes, the total number of business master’s degrees (MBA plus Master of Science (MS) degrees in business) annually awarded by US schools rose by 26,000 in 1970 to 168,000 in 2009.

With more business managers boasting MBA qualifications, so more people have raised a rather uncomfortable question: Has the prevalence of MBA training actually contributed to the recent global financial crisis?

The theory comprises twin arguments:

  1. That it has put a qualification before invaluable experience, promoting those who don’t have the real-world skills to perform; and
  2. It has taught graduates certain business models but without any lessons in how to question them, recognise problems, or fix/ re-engineer them when they start to fail.

Linking MBAs with economic collapse is more tempting when you consider that the banking industry has been one of the most popular destinations for MBA graduates.

The legal dimension

For lawyers, there may be some advantage to not buying into this system. It may mean retaining some independence of thought nurtured by actually working with clients, rather than being drilled in business theory. In addition, clients often say their lawyers are arrogant and don’t listen. Giving lawyers an MBA so they think they know everything about business too may not be the best response.

There is also another important reason why the shift to MBAs in law firms is a worrying one. How exactly are lawyers meant to fit all this in?

If you want your lawyers to be adept in both business and law, then that requires considerable time to be spent on both. Given that a typical lawyer’s timetable is hardly slack, fitting in an MBA qualification at any level is a stretch. Something may have to give.

Clients may ideally want a lawyer that has an understanding of business, but will they accept one that accordingly has weaker legal expertise? It’s doubtful.

And are clients actually driving this trend? Yes, there are testimonies from a few saying they’re pleased that firms have started implementing MBA training. But on the whole, client complaints seem to boil down to this: their lawyers are too expensive, and they don’t communicate enough. Will MBA training resolve that?

There is a huge pressure on lawyers to be all things to all people: technically brilliant, with outstanding client management skills, business and commercial acumen, and marketing nous to boot.

The fact is that not all lawyers can be all of these things. Those law firms that try to engineer this universal lawyer of the future might find themselves facing a compromise too far: a dumbing down of law.

A happy solution?

Associates that seem to have real business flair could be trained up to maximise that potential, including taking an MBA or equivalent. They may become the managing partners of the future, or play a key role in heading up practice groups and client teams. Meanwhile, those associates that are truly brilliant at law should be allowed to practice law and be given every support to do so with all of their time.

This means, however, not even thinking about MBAs or other sophisticated business training until the lawyer has worked in law for long enough to discover their strengths and weaknesses. This too would put the MBA into the context of real-world experience, an arguably far more worthwhile investment than putting it into the hands of graduates or trainees who know next to nothing about business in practice.

Training in legal or traditional MBAs could support the growth of the modern legal business if applied wisely. But law firms should also remember what it is they’re paid for. And that’s not competing with business at its own game. It’s doing what they’re still supposed to be really good at: law. CP

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