Michael Caplan | How a Client-Facing COO is Changing the Business of Law

Elise Holtzman: Hi, everyone. It's Elise Holtzman here, a former practicing lawyer and the host of The Lawyer’s Edge podcast. Welcome back for another episode. What if your law firm COO spends substantial time in front of clients? For most law firm leaders, that's unimaginable. But for Michael Caplan, COO of Lowenstein Sandler, it's core to the job. In this episode, Michael shares how he's built a firm-wide strategy around embedding business professionals, not just lawyers, into client development, what it actually takes to drive culture change in a law firm and where most firms quietly leave money on the table. If you lead a firm and you're wondering whether your operations team should be working as hard on revenue as it is on efficiency, this conversation is for you.

Before we dive in, today's episode is brought to you by the coaching team at The Lawyer’s Edge, a training and coaching firm which has been focused exclusively on lawyers and law firms since 2008. Each member of The Lawyer's Edge coaching team is a trained, certified and experienced professional coach and either a former practicing attorney, or a former law firm marketing and business development professional. Whatever your professional objectives, our coaches can help you achieve your goals more quickly, more easily and with significantly less stress. To get connected with your coach, just email the team at hello@thelawyersedge.com.

I am delighted to welcome my guest today, Michael Caplan, who is the Chief Operating Officer of Lowenstein Sandler, where he oversees the firm's business, financial and administrative operations. What sets Michael apart is how far outside traditional COO territory he operates. Before joining Lowenstein, he served as COO at an Am Law 50 firm for nearly a decade and prior to that, spent years leading legal operations at Goldman Sachs and Marshall McLennan. Those experiences on the client side give him a perspective most law firm COOs simply don't have and he's built that perspective directly into how Lowenstein goes to market. His approach has earned him recognition as one of the Financial Times' top five legal entrepreneurs in North America, Legal Innovator of the Year from the Changing Lawyer Awards and a spot on NJBiz's Law Power List for two consecutive years. Michael, welcome to THE LAWYER’S EDGE.

Michael Caplan: Thank you, Elise. It's nice to see you and I appreciate you taking the time to speak with me today.

Elise Holtzman: Absolutely. I'm really excited to talk to you, because as you probably know, business development and client development is one of my most favorite topics. And so I love when people are doing things a little bit differently on the law firm side, because we do know that, and I say this with love, because I am a lawyer, lawyers are not the fastest adopters in the world, right? We like to do things in a more traditional way. So I'm curious about your background. You came to Lowenstein with deep experience on the client side, working with general counsel, managing law firm relationships from the outside. So how did those experiences shape your vision for what a COO can actually do at a law firm?

Michael Caplan: You know, it really goes back to when I was the corporate chief operating officer of the legal departments at Goldman Sachs and Marshall McLennan and I worked very closely with many law firms. You know, I manage all the outside counsel relationships. I wrote outside counsel billing guidelines. I implemented electronic billing. I saw all the rates. I saw the relationships, all the data around law firm management on the matters on the corporate side. And I used to say to myself, God, you know, it would be great if, you know, the law firm and the operational folks at the law firm can really partner with the operational folks on the corporate legal departments. And back when I was doing this on the corporate legal department side of the business, it really wasn't something that happened. You know, I got to really learn and understand the business of law and matter management as a corporate legal COO. When I joined my prior firm, I was very lucky in that the leadership of that firm allowed me to kind of think a little bit differently and holistically, about building this business of law initiative. One of the things I did before I also came to the law firm, was I actually ran a legal operations business consulting business. And I worked very closely with general counsels, chief legal officers and business folks, in the legal department, implementing legal technology solutions as a consultant. So I was on the business development and sales side of the business that we started and sold. So I had the corporate legal department side, I had the consulting side of the business and then I came to the law firm. And when I joined the law firm side of the business, I said, I want to differentiate. And not only do I want to differentiate, but I want the team who works with me on the operations and administrative side of the business to be part of that differentiation. Because what we actually have on the law firm side is we have business professionals, who are subject matter experts in areas of marketing, talent, inclusion, finance, documentation, program management, practice management. I can go through the list, pricing, alternative fee arrangements. And how we think about RFPs, how we go to market, we work very closely with our lawyers. But at the same time, clients also have operational folks. They have COOs of corporate legal departments. They have folks that report into legal and talent management and HR, finance, technology, compliance, regulatory risk management. So let's marry these relationships on the business of law and let us, in operations, be the experts of the business of law and let the lawyers do what they do. They run the practice of law. That's where we sell our services. So I started doing that about 10 years ago. My old firm, we grew into a really nice way in terms of how we interacted with our clients. And now at Lowenstein, part of why I joined Lowenstein was, when I was meeting with Gary Wingans, our current chair and former chair and managing partner and John Wishney in our management committee, is the firm's culture needs to embrace this. And at Lowenstein, the firm's culture, part of why they brought me on board was they thought this was very cool and aligned very nicely to Lowenstein's strategic plan. Lowenstein's strategic plan of 2030 is this full service model of how we go to market with clients on the practice of law and business of law. So when I came to Lowenstein, we developed what's called BEST, the Business Enterprise Solutions Team. And I worked very hard with my chief officers and each of the directors of our core areas of operations administration to say, we should be working with our lawyers and working with our clients operationally, because it's all part of the full relationship model. We don't bill for this. So I work very close with clients on pricing. I work very close with clients on RFPs. I bring all of the subject matter experts at Lowenstein on the operations side to those meetings. We help with pitches. I bring business to the firm through the relationships that I have. And ultimately, the operational side, what it does with the client is, we help them in what they're thinking operationally without billing them for that. But it's a whole other part of building a relationship. So then when they have real legal needs, we're their people, we're the firm they want to go to. You know, it's funny, I've heard a lot of law firms talk about the business of law, but unless the firm leadership truly gets it and understands it and has a COO or somebody that can drive those relationships on the client side and can speak and talk the talk, it's very hard to implement. And you have to be willing to let lawyers, who are the relationship managers of those clients, bring us in. And they need to have the right people that they trust to do that. And at Lowenstein, we've been very successful at that in the two years that I've been at the firm.

Elise Holtzman: I'm curious about the lawyers, because you said that the managing partner and another member of the management committee was all in on this. Have you found, since you've… you’ve been there for a couple of years now…

Michael Caplan: Yes.

Elise Holtzman: … have you found that most lawyers, who are rainmakers and business developers, have been on board, or has there had to be some kind of education for them, or some kind of convincing for them, to understand how you can partner with them and how that benefits them, their own practices, and the firm.

Michael Caplan: You absolutely need to bring them up the curve. You know, I'm good, but I'm not that good, right? So you have to really bring them up the curve, because it's the business that we've been in for decades. It's getting the lawyers to understand that non-lawyer professionals with true subject matter experts in the business can add value to their clients. At the same time, they have to really trust the people that they're putting in front of their clients, understand the bigger relationship on the practice side. Look, I've been on all sides of this business for the past 25 years. So when I'm in front of a client, I get the practice side of it. I get the matter management side of it. I understand the lawyer relationship. I can speak about what we do legally as well. Part of being a successful chief operating officer is, I need to understand the practices. I need to understand our products and services, what we sell, how we go to market, who our lawyers are, who, which of our lawyers are very strong in business development, which of our lawyers are very strong practice lawyers and which of our lawyers need assistance. You need to build that full service model and relationship and education internally. It's very much like the movie field of dreams. If you build it, they will come. You know, once you do it once and lawyers say, oh, hey, I brought Mike Caplan, or such and such at the firm to a meeting and we're getting this work, or I introduced somebody in pricing, or somebody in inclusion, or somebody in data privacy and cybersecurity and my client wants to do more work with us. All the lawyers go, wow, that's pretty cool. Tell me more. You know, you don't just come in and say, hey, introduce me to all of your clients. It doesn't work that way. You have to build the roadmap. You have to get in front of your lawyers and you have to show wins. There's a lot of low hanging fruit you can do with clients. The other thing that I developed in my career, which, you know, look, I'm a COO, but I'm also a finance person by training, is I am very focused on the revenue side of the business. I'm very focused on billings and collections. I'm focused on realization and profitability. And I spend a lot of time negotiating alternative fee arrangements and different pricing arrangements with our lawyers. And they put me in front of their clients to have those negotiations. And I'm also really good at collecting money. A lot of lawyers don't love to go after the money. It's not something they're comfortable with. I actually really enjoy it. And I do it in a true partnered approach with our clients and I have managed and taught our pricing and revenue side of the collections team to do the same. So believe it or not, those little things, when you're in front of the clients, on behalf of the lawyer and you're able to negotiate a pricing structure, you're able to get bills out the door, in a way that they can be paid, you can discuss scope and assumptions with a client. At the same time, you can build your own relationship with the client and say, hey, by the way, let me tell you about our best program. Or the lawyers will say, you know, Mike, hey, I was on the phone with client X and they need help with project Y. And I learned about BEST, can you talk to our clients? So it's all part of his education and training. And then once they start to take place, more and more people want to be a part of it, because it truly is a full service relationship model that ultimately leads to revenue and profitable revenue. Because there's good revenue and bad revenue. And I try to help with the good revenue side of the business, which is high profit, high margin.

Elise Holtzman: Talk to me a little bit about that as well. You're coming from it with this financial hat on. And many lawyers, I've seen situations where lawyers say, oh, I'm the biggest rainmaker in my practice group, or I'm the biggest rainmaker in my firm, or the department, or whatever it may be. And then you find out that they're actually not that profitable. Right. They have a lot of clients. They're willing to bring in almost anything so that they can open up a new matter. But it's actually not really turning out to be what other people think it is. You know, if you just look at Jim and Jim has brought in 27 matters and isn't really looking at the profitability, you know, he thinks he's the biggest rainmaker in the practice group, but maybe he's not. So talk to me a little bit about how you and your team, help lawyers understand, how to have different conversations with their clients, or how to understand what the right clients are to be bringing into the firm.

Michael Caplan: There's also investments, you're going to make, in law firms. I mean, it's based on the current market and current economy, or what's going on in the geopolitical world and how it impacts our business. We don't want to give up clients, because of losing profit at time. You have to understand the client's business and how they raise money and how they public versus private clients across different practices, what they need in terms of the overall lawyer relationship. That's also where BEST helps, because we do a lot of that, you know, as an investment. But at the same time, most real rainmakers of law firms understand the difference between good and bad revenue. They understand profitability, they're very focused on it, they're very focused on discounts and how and when to give and not give. They're very focused on premiums, they truly understand the leverage. They discuss scope and assumptions with their clients on different types of matters up front and during the life of the matter. So we don't just throw a bill over the fence and the client's like, what is this, right? So most rainmakers get that. Where you really have to focus is, when you have the partners that are starting to become true originators of business. And again, it depends on the practice that they're in. Litigation is different from corporate, within corporate, there's different types of transactions and different types of clients. You can have 27 clients in emerging company and technology clients, but they have to raise money to pay you. Those are investments you're going to make. You have to, when you're creating funds and fund formation, or investment management, for those types of clients, they have to raise money to pay you. It's different than a public company M&A, or it's different than when you have a venture capitalist behind the business. You've got to know where the sources of funds are coming from. As a COO, that's a very important question that we look at as we're negotiating fee structures. At the same time, those partners that are starting to get to the 2, 3, $4 million numbers, they have to understand how to collect the money and they have to understand that it's a relationship with their client and how they bring in the money, without giving it all away. You're going to make investments, when clients need help, but it can't be continued investments and you can't continue to do work for clients that don't pay. And one of the biggest challenges that law firm partners have is, if the client owes you a substantial sum and it goes back six months and they haven't paid yet, you need to talk to that client and have a conversation, or go pens down. Because what you also find is those clients, there are certain clients that will continue to call different law firms and go through the same thing. And all of a sudden you're not the only law firm asking for money and then it becomes very complicated. So these conversations are things that we do on the operational side of the business, on the finance side of the business. And for me, as the COO, I'm very involved and engaged in those conversations. It's also about cycle time. You have to understand what realization means. So if you bill after 90 days, you're losing realization, you need to bill monthly, you need to bill on close, you need to know where your sources of funds are coming from. And then you need to get paid, because if your accounts receivable sits out 30, 60, 90, 120, 180 days, the longer that sits, the less you're going to get paid. They'll let it sit and they'll come and have negotiation with you later on. It's about getting those cycle times down and improving profitability. Partners ultimately understand that. Here, here's the other thing. When you are looking at PPEP and you're looking at net profit margin at year end and you're looking at allocations of compensation as a part of the offer, profitability is a very big part of those conversations. And that is something that most senior partners truly get and understand.

Elise Holtzman: What I've seen, because I've worked, you know, I started out myself as a lawyer in big law. I work with a lot of large law firms, but I also work with a lot of smaller to midsize law firms. And for some of those law firms, they're not as familiar with working with operations people. Right. So many of those law firms are just starting to grab on to that sort of thing where they may not have the team that's as sophisticated as a Lowenstein sort of a team or another Am Law 100 firms team. So if you think about those firms, because you've been in big companies and big law firms, if you think about those kinds of firms and somebody is a managing partner of a firm saying, you know, we're open to it. Like, we get it, we understand that this is really important and that lawyers can't necessarily run everything, because they've got to also be practicing law and developing the client relationships. What do you think is something that they should be thinking about? Like, how do they find the right person? Because I do think that in the conversation I'm having with you today, I am noticing a very different kind of approach than some COOs take. And I'm not saying that nobody is doing what you're doing, but this is a little bit of a different approach to it. And so if I'm sitting in a 100 person firm or 150 person firm, or something like that and I want to start building a team that is able to go to market, is able to fully partner with the lawyers on being really partnering with our clients, right, so that we can retain and serve our clients to the best of our ability. What are a couple of things that you think they should be thinking about, or places for them to get started?

Michael Caplan: That's a great question and I have a few ways I can answer that. By the way, the way I operate as a COO, in addition to talking about the client side of the business, I still operate as a traditional COO managing the operations, the administration and I work for the partners. But I want to be a go-to person for those partners who understand their business. When you're a smaller firm, but don't forget, I went from a $2.5 billion firm to a $500 million firm, right? So, you know, I asked a lot of questions coming on board and Lowenstein is a very big, small firm compared to the Am Law 100, but profitability wise, we're in the top 40, right? If you look at our revenue per lawyer, we're in the top 35 to 40. So, there's a lot of big firm components and we compete with the bigger firms in our high practice, high net worth, high profit practices. So, that to me was very important. But if you're on the smaller side of the firm, wherever the chairman and managing partner is, if they're interested in really thinking about their operations administration, this way they have to invest in a COO. You can't go pay someone $75,000 to run a law firm this way. You have to invest and truly understand that we are true subject matter experts in what we do. And with the right experience, it can lead to a higher profit, higher realization, faster growing business. But what's your culture, what's your objective, what's your strategy? You know, if you're a smaller firm and you want to be a 100 lawyer firm, you want to operate at the same level, you've always operated on and everybody makes their money and goes home and the partners are happy with making you know, X dollars a year, you know, that's not the right place for a COO like me. But if you have a strategic plan and you want to take your firm to the next level and you want to really dive into lateral growth and think holistically about organic and inorganic expansion and growing your revenue and profits and being competitive differently, you have to invest in a COO who understands that. You can't grow that in your firm. Or you can't take a partner that's about to retire and make them the COO, that's the biggest mistake. I'm not saying make me a lawyer. I'm not a lawyer. I'm an MBA CPA with 30 years of experience in doing what I do. But when you take partners that are no longer rainmakers, or want to still stay at the firm and make them COOs, they still think like partners of law firms. They're not thinking about the operational, the competitive intelligence, the data, the analytics, the technology, the tools, the program management office, the resources. Look, I came to Lowenstein with a massive network of people I can hire from, who want to come work with me, who don't care that it's Lowenstein Sandler, they want to be a part of something special. So those firms, if they want to do this, you have to invest in the talent. Now, I'm not saying you've got to pay the same level you pay your Rainmaker lawyers, but you can't hire a COO who has this type of experience and pay them as a CAO, it's a different model. Because we want a seat at the table in how the firm grows, yet understanding we are also execution masters of what they want us to accomplish. But we're part of defining that execution and strategy. And sometimes the small law firms, it takes a long time to get them there,it just does. They may say they want to get there and you may have a chairman, or managing partner, who wants to get there. But if you can't consensus build on your executive committee, you're not getting there. And that's very hard to do.

Elise Holtzman: I'll be interested to see what happens over the next few years with non-lawyer ownership in law firms. We know that, you know, that's permitted now in Arizona and nowhere else. I'm kind of curious if you have a thought on that, right, because you are so passionate about your background and experience. And, you know, if somebody like you, could be an owner of the firm, Right. It's kind of interesting to me, what kind of culture does that drive? Right. What kind of motivation does that create to grow a law firm? So, you know, I'm seeing you smile, I'm wondering if you have opinions on that and what you see coming.

Michael Caplan: I do. And it's probably not what you… I'm smiling, because I'm probably not going to say what you thought I was going to say, which is I kind of like not being an owner of the law firm. You know, I love the role that I play. Part of being a really good COO is you have to be a people pleaser. You know, you have to truly know as a COO of a law firm, how to please your partners, how to please the firm. And you have to be, you know, I'm responsive, I don't go to sleep without reading email. I'm responsive, I'm always available. Look, I work hard, play hard, I have a great work/life balance in doing this for so long, but I want to make sure that the partners and the leaders of the firm are happy with my performance and my team's performance. And that is a big part of what drives me. I kind of like not being an owner and don't get me wrong. I also want to participate in the growth and the profits of the firm as well, as I think the senior leaders of the operations team should. But I like where I stand. Now, on the flip side, as I'm watching private equity and managed services organizations, I'm very interested to see what happens in the MSO world with private equity. We're starting to have a lot of conversations in our firm about what is this? There's a lot of pros and cons. There's components of it that are attractive. There are components that private equity firms don't yet understand. We are not doctors and dentists and where you can create an MSO around us. There's a true ownership and culture in our business that's quite different. But there is an ownership component of it on the MSO and private equity that could be potentially available for lawyers and non-lawyers. So I'm very interested in seeing how that plays out. I'm not saying that's what I want to do yet, but I'm watching, because I think this could be very, very game-changing. By the way, with everything that's happening in innovation technology and tools, the private equity MSO piece is even more important, because there's a lot of data and technology and the firms that invest in business resources that truly get that, will be more profitable. We all say we know what's coming down the pike in innovation, AI and IT, we don't. But the firms that have the leadership, like we do at Lowenstein, that really want to know and learn and talk to clients, it's a great client business development opportunity to talk about these things. But I think at the end of the day, those resources who truly know knowledge management, knowledge resource services, artificial intelligence, have relationships with clients that are investing in those. By the way, we should be the folks that our lawyers are bringing to the table, if our private equity clients are interested in building portfolio companies in these areas. When I was at my old firm and currently at my new firm, clients that are interested in legal technology, my lawyers bring me to the table as a subject matter expert in matter management solutions, electronic billing solutions, contract management solutions, e-discovery solutions, because I could talk the talk and I know what's out there. At the same, that's going to happen with AI tools, where lawyers and non-lawyers are going to be experts in these tools and if private equity is going to invest in them, there's an opportunity there. I'm interested to see how that plays out.

Elise Holtzman: I think in some circles in legal, right? In some circles, you have people, who are innovators, they understand what's coming down the pike. To your point, they don't necessarily know what's coming, but they're interested, they want to be on the cutting edge. They want to bring the administrative professionals in, to talk to their clients about that, so that they can be a source of information and continue to partner with their clients. In some circles in legal, you've got a lot of lawyers who are terrified of this stuff. And they may be trying to pretend that, you know, they might be using some AI tools, but they're not really partnering with their clients in the way that you're talking about. And I remember years ago, going to a Legal Marketing Association event. I've mentioned this on the podcast before, because it really struck me, where there were general counsel on the panel, from some very large companies, talking about how the law firm down the street isn't necessarily your biggest competitor. The biggest competitor may well be your client, because the companies are willing to make these investments and they are on the cutting edge and they are bringing in all sorts of professionals who are not lawyers, to talk about this stuff. And so I'm curious for you, what do you see, you know, at the level of a Lowenstein Sandler, right? You may not be as big, in terms of headcount, but to your point, you guys are very much on the cutting edge and very much, you know, considered to be leaders in the profession. What are you seeing around you? How unusual are you? I mentioned that you're thinking differently about this, but when you are with some of your peers, who are operations professionals, or you're talking to management teams of other law firms, when you're talking to in-house counsel, how unusual is your approach, right now, as we sit here talking?

Michael Caplan: I don't think it's unusual at all. I think clients want it. I think it's unusual if law firms are not thinking about these things. They have to. You know, look, if you're K&E and Latham and the top 5, 10 firms, it's a different world than if you're an Am Law 100 or Am Law 200 firm, right? The client relationships are quite different. Look, at the same time, we're all raising our rates 8% to 10% a year. We are a very profitable business, but the billable hour is not going away. Everyone can say it's going away, it's not. But with AI, we have to be able to talk about value. If you're doing an M&A transaction, for example, like the banks get paid points, they're not being asked to reduce their fee structures, we're not going to reduce our fee structures, law firms are not going to do that. What law firms are going to do is partner with clients to talk about value and to talk about scope and to talk about the work we should be doing. You can hire any law firm you want to do an acquisition, or to do a different type of transaction, or a disposition, whatever, right? Law firms, there are various levels of talent and expertise in law firms that you may not get, if you don't hire the right firm that meets your needs. Like one thing I love about our firm, you know, we're not 2,000 lawyers, right? We're 400 lawyers, but very smart, intelligent and entrepreneurial, we are truly entrepreneurial in spirit. That culture drives what I'm talking about here. A lot of what I'm saying about business professionals and BEST that's there, a lot of COOs wouldn't even come on and do this podcast, because it would actually be anti kind of their strategy of how the firm pushes forward on client service and client management, where the full service partnership of best and business and practice of law, clients want to talk about this. And when you have a law firm where a COO can sit with a client and have these conversations on technology and tools and innovative solutions and lawyers and business professionals having this conversation together with clients, that is a relationship. We are in the people business. And that to me is a huge part of the investment that we've made at Lowenstein. But with AI and technology and tools, we have to continue to use it because it's changing so fast.

Elise Holtzman: Two things came up for me, while you were talking. One is, explain why you think other law firms wouldn't want their COOs to be having this conversation. What are they afraid of? What are they concerned about?

Michael Caplan: When you're a very profitable business like we're in and things are going very smoothly, you know and how partners and law firms operate, you want to be very careful, when you talk about things like the billable hour and profitability and realization and relationships, because that's traditionally owned and mostly owned by partners of law firms. And you want to be able to engage in these types of conversations with your clients and you have to be able to have the partners and the leadership of the law firm say, well, we can engage in these relationships bigger and better than what we're doing currently today on the practice of law, that's new. That is not something that all law firms are doing, that is not something that most COOs are doing. You know, it's most COOs are operating and executing on what their executive board and management committees are putting forward. By the way, it's all mine, right? It's that, that is first and foremost and I'm here to serve the leadership of my firm. But at the same time, as a business person and as somebody who thinks about profitability and growth and revenue and how we could differentiate, the experience that we have, on my side of the business, adds a ton of value today. That's different because of what's out there with AI innovation, tools, technology, and operational needs. And I think a lot of law firms that have been very profitable and successful, they haven't had to focus on it. The firms that need to focus on it are the ones that are trying to expand and do different strategic thinking and put different strategies in place. They have to think a little outside the box.

Elise Holtzman: Well, to your point, if there's a culture, where the lawyers have to be client-facing only and the COO is supposed to be in the background running the place, then they're not going to be willing to have these conversations.

Michael Caplan: Unless they get a COO, who has the ability to sit with their leadership and say, what is out in the marketplace that we need to think a little bit differently about that we're not doing for the next three to five years? AI and innovation, is it? I have a chief information innovation officer, Maureen Naughton, who I hired and she came with me from Goodwin. And she also, before that, she was at BlackRock and she was at Morgan Stanley. Maureen is out there in the industry talking about this, talking to her peer firms, talking to our lawyers. Gary Wing is our chair, Mark Keslin, who is a member of our management committee, it's Gary, Mark, and Maureen. They are out there with our practice group leaders, with clients, speaking on panels, et cetera. Our leadership wants Maureen out in front on this. We just hired a new director of knowledge management from an Am Law 10 firm, who wants to be a part of this with us. So it's about spreading this knowledge and getting the talent in, that the partners really trust to do this.

Elise Holtzman: And being ahead of the game, being ahead of the market on this. The other question I wanted to ask you is this. Let's say I am the client and you and your team, whoever may be on it, you've mentioned all sorts of different operations people and lawyers that may be part of this team.

Michael Caplan: Yeah.

Elise Holtzman: I want to know what a firm like yours, you talk about the value proposition. So delivering value used to be as simple as doing really good legal work for the client.

Michael Caplan: Which still is number one.

Elise Holtzman: And it still is, right?

Michael Caplan: Yeah.

Elise Holtzman: That's number one.

Michael Caplan: Yeah.

Elise Holtzman: But you talk about the value that you are now delivering to clients and aiming to continue delivering to clients. What are, let's go back for a minute and talk about what some of those topics are. So I'm the client and I really don't know enough about how a firm like yours, that operates like yours does, can be of value to me. What are some of the topics that are coming up? That are practical takeaway topics, where I can say, wow, a firm that has really embedded their operations people, right, their knowledge management team, all of those sorts of people into client development and client relationships can really benefit me as the client. And here are some of the ways in which they can do that.

Michael Caplan: You have to really educate your attorneys, who have the original and initial client relationship, to be willing to promote this. And then you have to bring the right people with you. Part of it also is, it's not just talking about the work. You have to be able to be social and build a relationship with other people. You know, I have partners take me to play golf with them and their clients. I have partners that invite me for drinks with their clients. Just yesterday, Gary Wingans is hosting a dinner with a bunch of different clients and potential other types of opportunities at the firm, in New York, and he asked me to come with the partners. You know, I can talk about the firm and at the same time I'm talking about what I do, which really intrigues folks. You have to bring folks on the operational side to RFP meetings. It can't just be all done through email, throwing RFP documents over the wall, because the folks that respond to the RFPs, have to be willing to ask the right questions. You have to be able to say, look, I know you gave me this RFP on a Friday and you want it on a Monday. Who are the firms I'm competing with? What's the pricing structure you need me to get to, because otherwise you're not doing an RFP? Is procurement running this? And if so, okay, we have to decide if we really want to do this, because we'd rather work with the folks who are making the decision. And what's the scope and what's the staffing model and how can we get a competitive advantage through an RRP process to win this business? As opposed to just, just fill this out and send it to me and I'll throw it over the fence on Monday morning to the general counsel. We have to ask these questions. We have to be willing to sit with these folks and say, we want this business and here's why we are different. And that is how you get to the clients and bring us into the mix.

Elise Holtzman: Paint the picture for me of what the client gets that's better, right? I mean, I know it's sort of like one of these things, well, come on, Elise, it's obvious, but I'm going to ask you to kind of map it out.

Michael Caplan: It's not, it's a great question.

Elise Holtzman: Yes. What is the client getting, right? So you're doing all of this stuff and the firm is able to win this business. Why is the firm winning this business? What is the client seeing that is the value?

Michael Caplan: The clients have to see the human side of us understanding what they do. We all have to understand that we are still in a client service business. We're here to make our clients successful. We're here to help our clients think differently and holistically about what they need to do differently. We are not just here to provide the legal service for the specific matter, but we're here to build a relationship. And once the clients truly see, wow, I can call the COO of Lowenstein and ask, I have a data privacy cybersecurity issue and I don't know how to solve this, or I need to get some advice and counsel on this, or I want to implement a new technology solution and I don't know how to go about step one, two, three, because I don't have anyone that does project management. And I can call a law firm and they, my partner on the other side, can get me in front of the right people and they'll help me think through this and get on the phone with me and I'll build a relationship with them. That is a tremendous value, you can't measure that. Now, not all partners need to do that. If you have the Rainmakers that have their five clients and you're bringing in 30, 40, $50 million a year, they're going to call me for other needs. But if you've got the partners that are building these relationships in very competitive business and how can we differentiate, this is one of those key ways. As the COO, you have to also understand when you get on the phone with the client, you're now part of the success or failure of this. You have to understand, you're not just in your own swim lane, you are in the swim lane of making that partner successful. You can't screw that up. You don't want to be in a situation, where the client hangs up and they're like, that was a total waste of time. Like, what am I doing? Right. You have to really add value. So you can't just walk into the meeting and kind of figure it out. You've got to do your research. You've got a plan. You've got to get ahead of it. By the way, AI gives you that today. I could go on a cloud and type in anything about any client about anything. I get a ton of info that can just better educate me and show that I'm interested and sometimes that's enough.

Elise Holtzman: One of the things that came up for me, again, while you were talking is, because my mind is going in so many different directions, this is such a…

Michael Caplan: Yeah, I have that impact on people.

Elise Holtzman: Obviously you do. I love that. Is that, this concept of collaboration, right? Law firms often talk about being collaborative. I think they've been saying collaborative and congenial, or collegial, since I graduated from law school. And this is really a true example of that, right? It's not just cross-selling, you know, across practice groups. It's really using all of the people inside the firm to be client facing and develop those relationships. So I really love that concept. And that goes back to Heidi Gardner's books about smart collaboration and how professional services firms grow and make money and keep these client relationships.

Michael Caplan: I know Heidi very, very well. Yeah.

Elise Holtzman: Yeah.

Michael Caplan: She's great.

Elise Holtzman: As we wrap up our time here together today, Michael, I want to ask you a question, I ask all of my guests at the end of the show. There's a phenomenon called the curse of knowledge, where experts sometimes forget that what is so obvious and natural to them is not at all obvious to others. When it comes to getting business professionals and lawyers working together on the client development side, what's a principle, or piece of advice that may seem obvious to you, but is important for people to hear?

Michael Caplan: You know, this is not something that everybody is good at. You know, we all have skills. You know, there are things that I am not good at in my business and I depend on people who work with me to educate me and carry me along and get in front of, you know… let me take a step back for a second too. I'm also not the one who drives all of this at the firm. I've had to educate certain people on the operational side to be really strong client facing operational leaders, some are and some aren't. So you may have a situation, where the partner says, I have a client that needs help in X and we don't have that person who's really good on the client side that has that expertise. So you have to know what you're good at and what you're not good at. And you have to get the right people in front of the right clients having these conversations that are willing to invest in. Remember, this is not our day job, this is not what I do all day long. I am also a traditional COO managing a law firm every day and responding to 200 partners and 100 clients and 50 issues that pop up every day. My favorite thing is, what's your day like? I'm like, I don't know, it changes every day. My calendar is never the same. But what people don't know sometimes, is as you grow and do this, it's about getting the right people on both sides engaged to make this successful. And you have to be willing at times to say that's not the right person to do this. And sometimes people forget about that. What I've learned how to do in my career is, I've also, for example, brought client opportunities through my network to the firm. And someone will say, oh, bring partner X to that. I'm like, I'm not bringing partner X to that. It's a waste of time. Partner X can't get in front of this client and pitch this business effectively. I know partner X. I want partner Y. And you have to be willing to have that conversation. And it's not a slight on partner X. Our time is limited. And if we really want to grow this business the right way, even if you're not a partner, if you're helping originate business, through your relationships, the key word is relationships. It's about making sure the right people you bring to your client, who is your relationship, do the right thing. And that to me is something that not everybody thinks about all the time, when it comes to this thing.

Elise Holtzman: Yeah, very important. And I think, you know, people are… we are to some great degree people pleasers. We don't want to offend anybody, but it's not about offending anybody. It's just about having the right people in the right seats. Michael, thank you so much for being here today. It was a great conversation. Very interesting stuff. Pleasure speaking with you.

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