Chief among equals

Tales of doom and gloom prevail in the legal profession. Unprecedented levels of competition push the weakest firms to dissolution, while even the most successful legal business treads the boards of client expectation and dissatisfaction. For some, however, this is an opportunity for change – to embrace the business world and appoint non-lawyer leaders who can provide commercial acumen and strategic direction. Caroline Poynton talks to chief executives at asb law, Buss Murton LLP, Hardwicke Chambers, Whitehead Monckton, and the chief operating officer at Wiggin & Co, about their views on the legal profession, and how their roles compare to that of the traditional managing partner.

Change is a fickle friend, suggesting new beginnings, the chance to lay aside the faults of the past and providing prospects for a brighter future. It rarely lives up to its early promise, however, with past mistakes proving too ingrained to be challenged and means of starting anew withering under the fixed gaze of immobile traditions. Indeed, when combined with an innate fear of the unknown, change becomes the enemy, presaging a wave of uncertainty that demoralises all in its path.

For the legal profession, however, there is no choice. Change is underway, with ‘survival of the fittest’ becoming a familiar slogan across firms, large and small. On one hand, the process of law has been impacted by regulatory developments, including the Clementi review and the Wolfe reforms, while on the other, competition and a sustained economic downturn has resulted in wholesale changes in client expectations of legal-service delivery.

Chief executives Stuart Burnop (Buss Murton LLP), Christopher Honeyman Brown (asb law), Hilary Mundella (Whitehead Monckton), and John Banister (chief operating officer at Wiggin & Co), agree that the market is tough. As Honeyman Brown puts it: “If law firms are going to survive, they have to adapt: they have to defend their client base against competitors who can offer a broader service; restructure their teams; and invest in technology to deliver services at the right price and with the delivery mechanisms that meet modern high-tech demands.” And it’s not just solicitors’ firms that are facing the inevitability of change. Ann Buxton, chief executive of Hardwicke Buildings, explains how the Bar must address parallel challenges. “More solicitors have rights of audience so there is a tendency to reduce the use of barristers. The number of cases going through the Queen’s Bench division has also dropped to about ten per cent of what it used to be about ten years ago, before the Woolf reforms,” she says.

Gloomy prospects have been countered by some firms, particularly small and mid-tier, which have taken the initiative to appoint non-lawyer chief executives, instead of following the traditional managing-partner route. The reasons are obvious: small firms rely heavily on their fee earners and can rarely afford to lose one to management; there is a smaller pool of lawyers with management experience from which to appoint; and the lawyers may be understandably reluctant to give up their client work to take over the management of the firm. Buxton also points out that Hardwicke Building has grown to 30 members of staff, making it necessary to bring in management expertise to handle personnel, business development, and internal restructuring and branding. Mundella goes on to explain that such requirements demand a financial investment that smaller firms can ill afford. Appointing a generalist chief executive, however, can move the firm forward in these areas cost effectively.

Apart from meeting the demands of a growing business, bringing in a chief executive can prove vital for resurrecting a failing business. For instance, as Burnop says: “Historically, the business [Buss Murton LLP] had been under-performing and, as a result, it was dysfunctional, leaking cash, lacked investment (in IT and people) and had a workforce that was largely disengaged.” Since his appointment, the firm has clearly implemented improvements, with Burnop now describing it as a “flourishing business, full of enterprise and with a motivated workforce”.

Certainly, the chief executives interviewed for this article have varied and impressive backgrounds, which could provide the experience and incentive for firm-wide change. Burnop and Honeyman Brown, in keeping with many chief executives, are qualified accountants by profession, while Buxton has an MBA from INSEAD. She has a marketing background as well as having been management consultant working with lawyers, accountants, surveyors, and architects. Mundella gained her management experience in the healthcare industry, where she managed acute-teaching hospitals before moving to the private sector to manage hospitals with BUPA. As a real proof of variety, Banister spent eight years in the Royal Navy, where he undertook leadership training, weapons engineering and IT management (skills that he says have transposed well to the professional environment), before joining Merrill Lynch, and then Linklaters as one of its original business managers.

This broad industry experience has proved to be a real boon for many law firms. Honeyman Brown is an excellent example of a non-lawyer chief executive who has made a real difference to the legal profession, and indeed was included in a recent Legal Business list of the 100 people who have most influenced the legal profession over the past ten years. The accolade seems well earned. In the early 1990s, he worked alongside the managing partner of Turner Kenneth Brown to restructure the firm and get it into shape for a merger with Nabarro Nathanson. Then, in 1996, as chief executive of Alsop Wilkinson, he was instrumental in leading the firm into the highly successful merger with Dibb Lupton to form what is now DLA. He is currently working hard to consolidate and expand the successes of asb law, a firm that has been gaining recognition in recent years.

There are undoubted merits to bringing in outside expertise: the fresh perspective; broad but relevant experience; and a lack of bias or political agenda based on historical precedent. However, Paul Stothard, chief executive at Shoosmiths, pointed to some potential pitfalls to such appointments in the profile feature published in the March 2004 issue of Managing Partner. He argued that external chief executives often join firms thinking that they will be given the authority and freedom to act. However, in reality, partners are rarely willing to relinquish the leadership of the firm, especially in the early days. Equally, chief executives might encounter internal resistance to their appointment, with claims that a business manager could not possibly understand the intricacies of a legal practice. Honeyman Brown agrees, saying that many chief executives are, in effect, chief administrators, an important role, but nevertheless far from being true leaders.

However, while aware of the pitfalls, Banister says that the chief executive as firm-wide leader is a concept better embraced by smaller/medium-sized firms because they are less set in their ways and are often more entrepreneurial. Sure enough, larger firms have long appointed business managers to HR, marketing and financial management, but the firms’ leadership tends to be more of a combination, involving a team of partners and external non-lawyer managers. For Banister, the explanation for this lies in the level of responsibility handed over. “Large firms have to get away from the mentality that their business managers are just administrators, there to advise but, ultimately, with the partners making the decisions,” he says. “During my time at Linklaters, I feel that giant steps were taken in this respect but the small firms are showing that the model works – their financial performance is improving, they are pursuing and achieving strategic aims, client-service delivery is improved, and the firms are better places to work.”

Mundella agrees, saying: “I suspect that the politics and culture of the global law firms is too competitive and hostile an environment for partners to consider relinquishing the leadership role to a non-lawyer.” She does maintain, however, that such firms could benefit from extending their current appointments of business managers to the chief-executive position. “These are businesses with turnovers equivalent to some blue-chip companies and I can envisage future opportunities for commercial leaders to make their mark in those law firms that are progressive and receptive to new ideas,” she says.

Whether Banister and Mundella are right in their appraisal can be tested by assessing how far small and medium-sized firms have truly embraced the chief-executive role and handed over responsibility for the firm’s leadership to a non-lawyer who has the same authority as the traditional managing partner. If that leader has then made real business-development improvements, then the model, as Banister says, is clearly proving its worth.

Honeyman Brown has few concerns in this respect. “In asb law, my role is entirely analogous to that of a managing partner – I am the senior manager of the business and its leader in terms of management and strategic direction,” he says. He explains that he is supported by an operational board to deliver the firm’s business plan and objectives, while he is overseen by a non-executive supervisory council of partners that gives the appropriate checks and balances as it would if he were the managing partner.

Buxton, on the other hand, mentions a lot of operational facets of her role and talks about the administrative task of making sure people are in the right place at the right time, with the right bills being billed at the right prices. She also talks about it being the barristers’ business. “I may have a view about something, but unless and until I can get people to think in the same way, it’s not going to happen,” she says. At the same time, however, she does express a real interest in business development and feels very proud of the fact that as an organisation, Hardwicke Buildings now knows where it is going. “I’ve perhaps improved our client focus. I have also contributed to business development with noticeable results,” she says. A particular project for Buxton has been establishing, within the overarching Hardwick Building brand, the client-facing brands Hardwicke Civil, Hardwicke Crime, and Hardwicke Family, distinguishing Hardwicke from other barristers’ chambers that still cover these, but as a common-law set.

Buxton’s reticence to proclaim her leadership role quite to the extent of Honeyman Brown reveals some differences in the perception and practice of the chief-executive role between legal organisations. However, legal practices built on the ethos of consensual management are unlikely to embrace dramatic change brought about by an external business manager. Hence, for Banister, the biggest challenge he faces is cultural. He was appointed to his role as chief operating officer of Wiggin & Co in June 2003, initially to manage the de-merger of the private client team from the media group and subsequently as COO of the new niche media firm. He had plenty of experience for the job, having previously been COO of KLegal, joining when there were 40 people, and leaving once the post-merger integration with McGrigor Donald was complete (then some 650 people). Developing a new identity for Wiggin & Co was a real task, however, and demanded a chief executive who could give direction and be seen as the voice of reason, and deliver on the many things that had been talked about but never delivered. “My preference is the ‘wham bam thank you ma’am’ style of change, although more realistically, I’m drip feeding the change and have to recognise that things aren’t going to happen overnight – despite the complete buy-in of the whole firm.”

It is also a good indication of a long-term approach to law-firm leadership. While Mundella has implemented some specific projects in Whitehead Monckton, including a commercial approach to billing clients and a firm-wide re-branding exercise, she has several more long-term projects in mind, including developing the firm’s existing client base.

She also talks about being more objective, accessible and less egotistical than a fee-earning managing partner, with the added skills of being able to lead, manage and motivate people. To improve her abilities in these areas, she has embarked on a two-year MBA in legal-practice management at Nottingham Law School, a step that further demonstrates the commitment that non-lawyer chief executives are making to the profession.

Some chief executives will continue to struggle to get their partners to sufficiently trust their leadership abilities and few can claim to have the same authority as the traditional managing partner. However, some smaller firms seem to be going the right way about using external expertise, and there is plenty of scope for existing chief executives to expand their leadership roles as their firms further absorb change. This particularly rings true when considering the strategic objectives of many small firms in the current environment, where, for many, including Buss Murton LLP, the next strategic step is to expand.

“The business is too small at this point of time,” Burnop says. “We need to achieve a critical mass where economies of scale benefit us.” And, to succeed with such steps, many of the smaller/mid-tier firms might find themselves following the advice of Honeyman Brown. “You need intuitive and inspirational leadership, strongly laced with practical solutions and an empowering style of management. Leaders must also provide coaching and support to show partners how to do it. Lawyers hate being told what to do,” he says.

Many of the larger firms have been blessed with inspirational and talented managing partners, picked from the existing partnership team; just think of Nigel Knowles (DLA), Neville Eisenberg (Berwin Leighton Paisner) or Mark Jones (Addleshaw Goddard). However, there will come a time when these firms will face the very real challenge of succession. It may prove difficult to find a suitable fee earner to take the leader’s place and a suitable candidate might be reluctant to give up their fee-earning work for full-time management.

For some, the old ways will always prove best, but for others, the answer might lie in a new breed of leader: the non-lawyer chief executive who will foster change and make his or her law firm into a successful commercial enterprise on a par with the best of the blue-chip companies. And, if the global firms don’t make the most of the business leadership that is out there, there are plenty of smaller firms just waiting to take advantage of this largely untapped goldmine. In years to come, the global firms might just wonder what has hit them as the smaller firms take an ever-larger share of the profit. And they will kick themselves for not having seen the opportunities earlier.