The upheavals of 2020 have given me more time than normal to reflect on something that I’ve spent a good deal of my career engaging with: leadership in major law firms. But while leadership in law is widely accepted as crucial to the success of major institutions, it is a subject that still attracts much confusion and lazy platitudes. So, for what it’s worth, I’ve put down some reflections drawn from two decades of gossiping, arguing, drinking and debating with the c-suites of large law firms. The following are my personal observations and assertions about the state and nature of leadership in this game we call law.
Leadership at the crossroads As Legal Business has remarked before, 2010 was a curate’s egg for leadership in large City law firms. While operational management continued to improve after the battle testing of the banking crisis, strategic leadership became increasingly uncertain when it came to making the big calls. This happened as the model that delivered effective leadership through the 1990s and 2000s at what were then still London-driven firms failed to adapt to the sprawling global partnerships that they have now become. With partnerships being increasingly unwilling to delegate big strategic decisions to leaders during the 2010s, the obvious question of the Covid-19 aftermath is whether managing partners will use the crisis to retake the helm. They’ll certainly try but it’s far from clear that this more robust approach will survive a return to something like normal.
Rainmakers as law firm leaders It’s often claimed that selecting rainmakers as managing partners is a sign of what ails leadership in City law firms but that’s rarely been my experience. True, there is a specific breed of individualistic rainmakers bristling with nervous energy, insecurity and sharp elbows that, while being a huge asset to your corporate or lev fin teams, you don’t want as managing partner. But most top billers achieve success because they are very good at what they do, are highly driven and possess excellent communication and team-building skills. Apart from the practical point that high billers come with the institutional capital that helps them get stuff done, the crossover between rainmaker and effective managing partner is more considerable than often claimed. This common ground is all the more notable at top-tier outfits, where it is near-impossible to galvanise the partnership without a rock-solid pedigree as a practitioner in a core practice area.
Leaders vs managers The last 20 years has seen a huge shift in business media and academic debate towards celebrating the ideal of the business leader as visionary as opposed to the effective manager of process and people. To a point this is understandable given the disruptive impact of technology-driven companies across many sectors. These days everyone wants to sound like they were bred in Palo Alto. None of which changes the fact that we spend far too much time focusing on the heroic leader, as opposed to the sound basics of management. Ninety-nine percent of what great businesses do is successfully executing and improving the day-to-day, compared to 1% rethinking their activities. Or that is what they should do – the vast majority of businesses would be lucky to manage that goal even 30% of the time. It is pointless to get absorbed in blue-sky thinking if you aren’t even doing the unsexy basics properly.
And yet we now have a sizeable industry of academics, consultants and authors pumping out truly laughable pseudo-science-meets-aspirational-musings dressed up as the latest secret of success.
The legal industry is far from the worst offender in adopting such banalities but it is getting worse. A lot worse. And pretty much every law firm collapse in recent years had major failures of basic management as well grand strategic missteps. Put it like this, why should the average partner listen to senior management that lacks a solid record of improving their firm’s core competences when they start banging on about re-inventing their business? Fundamentals first. Always.
The leader wish list It’s tempting to dismiss the qualities that good managing partners require as statements of the obvious but given that spurious factors are often celebrated, here goes my list: integrity, a decent work ethic, humour, functional empathy, strong communication skills, a solid grip of project management, an openish mind and sound judgement regarding human nature, partnerships and the legal industry. The more exotic qualities they will also need include an ability to build consensus and manipulate when necessary. Much of the skill is in appearing to be a consensus builder while in reality deftly prodding the partnership in a pre-ordained direction. They also need the nerve to take calculated risks. Managing partners function successfully by triangulating between what the partnership wants and needs, thereby keeping the two in pragmatic, actionable tension. And it ain’t easy.
Challenging others This is one of the most overrated skills in leadership since it typically involves someone trying to push subordinates out of their comfort zone while sitting squarely in their own. There is absolutely a place for it, especially when executed with humility, a willingness to take on entrenched interests rather than just easy targets and a recognition that some of the cherished notions getting junked may be your own. But what it doesn’t usually involve is the challenger doing the legwork of understanding the boring-but-essential details. This is the main reason that sloppy leaders often indulge in the ego trip of thinking outside the box rather than doing some proper work.
A question of character Related to the two points above, there is a strong link between effective managing partners and decency as a human being. Empathy, regard for others, plain dealing – these are areas in which the qualities of the rainmaker and law firm leader can materially diverge. It’s not uncommon for wildly effective practitioners to be awful people, but I’d struggle to think of any successful law firm leader I’ve known that was seriously wanting in basic character. It’s a people business.
Selecting leaders The only thing that can be said for the two main models of selecting leaders – autocratic rubber stamping of an anointed figure vs open elections – is that neither is that satisfactory. And yet no one can come up with a better alternative. I certainly can’t beyond noting that you probably have to keep the two approaches in some kind of constructive tension. Yet, the needle has been swinging towards managed succession over open votes. Full elections used to work better at firms dominated by a single geography but have more recently proved much less effective with large global firms as elections are prone to being hijacked by national interest groups. But, honestly, there are no easy answers here. And despite some sniping about how law firms appoint leaders they do still benefit from having internal appointees with deep knowledge of their own industries and institutions and not chopping and changing too much. You only have to look at the c-suite merry-go-round in many public companies to appreciate that it could be a lot worse.
C-suite powers Leadership in many London firms has become too diffuse with too many partners in quasi-management roles. While there has been some rowing back of these excesses in the last five years, London’s leading firms have some way to go if they are to mirror the leaner management of their more effective US rivals (plenty of US firms have terrible leadership but that is strategically irrelevant if Latham is breathing down your neck). We’ve reached a stage with the development of leading City-bred firms where there needs to be more discussion about the mandate handed to central leadership with a view to strengthening both the c-suite’s levers and lines of accountability. I’ve heard it said that it is time to hand managing partners more power while making it easier for partnerships to eject failing leadership teams. There is a lot to be said for that. Handing more juice to managing and senior partners would also make the wider partnership take strategy more seriously.
A word on strategy For some businesses, a fully-fledged strategy is essential, for others it isn’t. To develop the point, commercial law firms can usually be clearly divided between wannabes and conservatives. The former are looking to fundamentally change their business, while conservatives wish to preserve their position. DLA Piper, Allen & Overy, Clyde & Co and DWF are all wannabes with totally different positions and heritages, while Slaughters, Sullivan & Cromwell, Burges Salmon and Travers Smith are all conservatives. This distinction requires a very different playbook for leaders. Wannabe firms have to look to their long-term strategy to play a far more central role in their success as they need to push through difficult transformation while, for conservatives, strategy remains an abstract curiosity. Having great people while chasing competitive advantage opportunistically is a perfectly fine approach for a law firm. Strategy is also more optional than commonly supposed because most companies get by with strategies that are a) misconceived, b) never remotely implemented, c) succeed entirely due to fortune not insight, or, d) merely describe the status quo. Businesses that excel thanks to great strategy are very rare so if you think you are going to be one of those exceptions you should have a very good reason for your confidence.
London’s competitive edge A cursory look at the legal industry over the last 30 years makes it clear that London law firms have pioneered a much more sophisticated and daring form of central management, a development that propelled their rise and was widely copied globally. That approach has proven far less effective over the last decade as they’ve fallen to managerialism but regaining that pioneering spirit will be key to UK law firms becoming the global drivers of innovation that they once were. Given that they can never trade blows with US rivals for profitability and scale of home market, it’s hard to see how they can compete in the long-term without rediscovering that strategic clarity and dash.
The people If the previous entries are dished out in no particular order, I’ll finish by noting that managing and senior partners are in my experience generally pretty likeable people. The ambiguous nature of the role, which means rubbing along with their co-shareholders, tends to keep them more grounded than most chief executives, as does a keen sense of their own limitations. Without the constant feedback-loop of billing gratification that fuels many partners, they are typically less arrogant than many of their colleagues. And while successful ones can go past their sell-by dates, many remain astute and philosophical judges of human nature and consequently good company. I’ve long suspected these qualities are one of the many reasons the legal profession has been an enduring success story for British business.
For more on running a law firm see ‘16 steps to making you a great managing partner’