Will the real Clifford Chance (CC) stand up? It is, after all, a key moment for what was not that long ago the world’s most influential law firm but working out what it stands for now can be a challenge.
Taking the long view post-2000, a chasm steadily opened up between its celebrated reputation for vision, meritocracy and entrepreneurialism and a reality that too often meant bureaucracy, strategic drift and an indulgent attitude towards individual contribution.
An excess of management would be one thing if CC was delivering operational excellence and rigour but in too many regards the firm did not. The last 15 years saw the disastrous non-integration of Rogers & Wells, an ill-fated move into California and a continual avoidance of important strategic issues on remuneration and performance management. This allowed others to steal its playbook and execute it more clearly.
During the 2000s Linklaters took CC’s place as the City’s global agenda-setter before the banking crisis re-set the market and hit CC harder than any peer. CC has done well to put that period behind it but remains a way off the swagger of its glory days.
Which brings us to managing partner Matthew Layton (pictured), now just over a year into his leadership. He is a popular figure but it will take more than that to bring the true revival the firm’s more ambitious partners must be hoping for. The two key reasons for cheer come in early on tackling two major issues the firm kicked down the road: streamlining its governance and overhauling its lockstep pay model.
True, only at CC would what has been put on the table be called a slimming down but the consensus in and outside the firm is that the shake-up last year was a fair step in the right direction. As to the long-overdue lockstep review – again, virtue comes in relativity. The odd previous system meant that CC had two tiers which it largely didn’t use. In reality, the current shake-up isn’t about ladders or flexibility, it’s about management taking the power to reset what partners are paid. To which, neutral observers would have to say it’s about time. Indeed, if the leadership is not robust in pushing for a more performance-driven partnership culture backed by reward – and the signals are mixed – it looks a half measure CC can ill afford.
But then the curiosity of CC’s current sales pitch is how understated and at times confusing it is compared to the dash of its celebrated rise. The firm – along with its Magic Circle peers – faces a huge challenge with the rise of US rivals – you can’t help feel there’s a need for more confident and comprehensible messages to the troops and market. It will be a pyrrhic victory to no longer be the Magic Circle’s sick man if the group itself is – globally speaking – developing a nasty cough.
In this regard Layton’s biggest asset is the ability to prod the partnership along in a more performance-orientated direction, while making enough key hands feel both good about themselves and listened to.
Peter Cornell was a good all-rounder but hampered by a lack of support in London while David Childs – who some joked was the ‘iron fist in the iron glove’ – did a good job leading a hard-to-lead firm during a crisis but didn’t always take people with him or persuade the partnership to face things it didn’t want to.
The hope is Layton will develop a clearer voice in time, as the best managing partners normally do. Because CC faces a huge challenge to live up to its own legacy.
For more on Clifford Chance’s challenges under Layton, see ‘The shoulders of giants‘ (£)