Willing and able? Managing a US venture in a London market

John Reynolds has plenty of recommendations for his expertise in litigation, including Chambers & Partners, Legal Experts 2002 and the Global Counsel Dispute Resolution Handbook, all of which describe him as a leader in the field. In September 2000, however, Reynolds agreed to expand his responsibilities and become managing partner of the London office of McDermott, Will & Emery. Can he parallel his litigation success in the management field? Caroline Poynton finds out.

It is never too early to start building the foundations of a career, or so our modern mindset would imply. The young, encouraged to start thinking about the future from the earliest of ages, often reach university with a driving ambition that leads the most successful to graduate-recruitment schemes before they’ve even graduated. John Reynolds, however, makes a refreshing change. As managing partner and head of the litigation/arbitration group at the London office of US firm McDermott, Will & Emery, his career is clearly going very well. However, his early foray into law could hardly have been called prestigious.

Reynolds didn’t always want to be a lawyer. If he’s honest, he didn’t even really know what was involved in the job. But, the encouragement of parents and a feeling that it was probably as good an option as anything else, led him to choose a degree in law. “I didn’t particularly enjoy doing law at university,” he says. “I think Clifford Turner and Theodore Goddard were the two firms that came to see potential recruits but I didn’t bother going along to see them.” Honesty is one thing, but I’m beginning to wonder how he’s made it this far.

Then he starts talking, and he’s really talking. In fact, I’m hard pushed to get a word in edgeways as Reynolds recalls his early days in the profession: his post-graduation job with a two-partner general practice in Piccadilly; his traineeship with Grosvenor Square firm Lickfolds Wiley & Powles; and his decision to join City firm, Herbert Smith, where he stayed until he joined McDermotts in 1999. He remembers the early years of his career with a passion. He had an “absolutely terrific time” involving “really really interesting” work. From such ambivalent beginnings, things could have turned out very differently, but Reynolds had the good fortune to discover that his forte was in the practice rather than theory of law. And, if his enthusiasm is any indicator of early success, he clearly did well.

McDermott, Will & Emery has a prestigious history and is now the tenth largest law firm in the US. But its ambitions are global and London is playing a central role. “London is the most important office for the firm at the moment because it’s the lynchpin of the firm’s international ambitions. It is the hub from which the other European spokes come,” says Reynolds. He is keen to add that this doesn’t mean London will be running the European offices, but he does expect London to be the biggest office, with the New York/London axis providing the most important link in the whole firm. It seems that Reynolds faces a huge task. Building up the London office, which was only established in 1998, and making it live up to the expectations of a firm wishing to become a global player, is far from a job for the fainthearted. Added to that, although every McDermotts office in the States has been set up from scratch, the London office has faced additional burdens. For example, they could neither rely on functions that are centrally located in the US, nor on the same assistance from other offices as their US counterparts sharing the same jurisdiction could do.

Thankfully, it is not a job that he faces alone. Reynolds became managing partner of the London office in September 2000. The original managing partner, William Charnley, realised that as the job grew, it would be too much for one person to handle, and the role was split with Charnley becoming senior partner and Reynolds managing partner. Since then, the burden has been further relieved by the recruitment of heads of marketing and HR, but the role can still be tough. “The work mushrooms and explodes all the time. Suddenly something will happen and a lot of time will be spent on it. The last two or three months of the year are always busy with appraisals, salary reviews, promotions and budgeting to contend with,” says Reynolds.

Despite the significant responsibility of being managing partner, Reynolds appears keen to play down the title. He says that the best advice he was given was to avoid telling people that he was managing partner because they would think that he had given up practising law. It seems odd to say the least that I’m sitting talking to him about being managing partner for a publication called Managing Partner, especially as he admits that if pushed, he would always choose practising law over managing the business. Thankfully, he does at least admit that he enjoys the role and that one of the reasons he joined the firm was that he wanted to have more of a say in the business. Reynolds’s reservation is also typical of many a managing partner across the profession. Deciding to make a fee earner into the managing partner makes a lot of sense from the perspective that they know the practice of law inside out and understand the motivations and needs of the other partners. However, apart from a lack of management experience, there is also the hefty hurdle of making a fee earner actually want to take on a management role. And, where firms are growing all the time, you could hardly be blamed for wondering whether it’s even practically possible to successfully combine the fee earner and management side of the business.

According to Reynolds, it can be a difficult balancing act but rarely for more than a week or two when there are particular things to oversee. More importantly, he argues that combining the fee-earning and management role can have real benefits. “The way I’ve always thought of it is that everyone is a fee earner and everybody is expected to meet the 2,000-hour standard,” he says. “That discourages people from over managing. Like many law firms, we could be tempted to form a committee and sit down spending a whole afternoon talking about something, but we know we still have to go out there and do the client work, so it’s less likely.” Reynolds also explains that the firm is managed by consensus, so he will tell the partners he thinks something needs doing and either go off and do it because he knows the partners are happy or he will ask anyone who disagrees to let him know and they’ll discuss it. “What we don’t do is have endless meetings and send dozens of e-mails,” he adds.

It is an argument that makes plenty of sense for the management of a single office, but if London is to play the important role that Reynolds suggests, it might still prove hard to reconcile the fee earning and its tough 2,000 billable-hour target with the management responsibilities that such an office will surely require. In terms of responsibility, Reynolds and his team also face the challenge of establishing the success and reputation of the US firm in London. The failure of firms such as Altheimer and Grey, the London ambitions of which were rapidly brought to a halt, has led to speculation in the press and among City rivals that US firms will only be here for the short term. Reynolds admits that such a reputation for US newcomers to the London market could make business difficult because it impacts on important areas such as recruitment. Indeed, Reynolds mentions that one of his goals is to build a strong cross-border disputes group. He would have liked to have had it set up by April 2004, but he has spent four years trying to find another partner, so it will take longer to achieve than he had initially hoped. Similarly, he has been looking for a suitable litigation partner for three years, without success. Perhaps the poor reputation of US firms in London is practically impacting the firm’s ability to recruit?

To be fair, this is probably pushing the point too far. The market of late has been hard for most firms, with the economic downturn impacting recruitment in particular as partners are less willing to take the risk of a career change. Probably as part of that, the number of fee earners contacting recruitment consultants has dropped as they prefer to wait for the headhunters to entice them with potential offers. Reynolds has noted this development and has taken steps to change the office’s recruitment procedure, employing headhunters, who, he says, are going great guns and will bear fruit soon.

Similarly, the London office has a lot of advantages to build on, not least McDermott’s strength and reputation. And for those rivals who are content to sit back and presume that US firms are no threat, there may be some hard lessons to learn in months to come. “I think five to eight years ago, the big London firms would have dismissed the US firms as irrelevant,” says Reynolds, “but we are now competing with all those firms to take business. If you go through some of the directories, there are very few categories in any practice area where you won’t find a number of US law firms and, in some cases, they will be at the top of the ranks.” To add to that, Reynolds says that US firms have implemented a sensible financial model that has successfully impacted profitability, adding: “I could come up with half a dozen things that would make London law firms instantly more profitable and they’re really simple financial-housekeeping measures. The problem is that it’s very difficult to turn around a supertanker when it’s cruising along and that is how it is in many UK firms.” It is a good point, and one that should shake up any UK complacency.

On a personal level, Reynolds still has a lot to do as recruitment remains the priority for growing the office and further establishing the firm’s position in London. He believes that he has learnt a lot, and more from his mistakes, he says, than by getting things right. At his first meeting, after becoming managing partner, he told everybody that he would make mistakes and that people would have to work with him and feel free to criticise. He also admits, however, that he hasn’t received many complaints so far, so either everybody is keeping quiet or Reynolds is doing rather well. Considering his open, honest and approachable manner, I suspect the latter is a fair assumption to make. Most of all, by talking to Managing Partner, Reynolds is making some intentions clear: that he is finally happy to advertise his position as managing partner and demonstrate his ability to manage the core element of McDermott’s international aspirations. We await further progress with anticipation.