No stranger to change

A firm spends many years building its reputation and client list. Then it decides to put it all on the line for a merger where cultural incompatibility might prove the least of many problems. Managing partner Neville Eisenberg, however, has been there, done that, and seems to take it all in his stride. Caroline Poynton talks to the man behind the making of Berwin Leighton Paisner.

On his election to managing partner of Berwin Leighton, Neville Eisenberg hoped to enjoy the best of both worlds, balancing his new management responsibilities with a lesser, but still significant, proportion of client work. It was hardly an unreasonable objective, to combine his success as an M&A lawyer with his ambitions to play a central role in the strategic future of the firm. If he did have any concerns, he could always comfort himself with the knowledge that he would be joining a long list of managing partners who successfully mix their legal practice with management, claiming that their fee-earning work enables them to stay close to the clients and, therefore, the optimal business strategy for their firms. For Eisenberg, however, becoming managing partner at the end of 1999 coincided with the development of a new strategy for the firm, which Eisenberg and a small team presented at a partners’ conference in the November of that year. The watchword for the ensuing months would be transformation: turning what Eisenberg describes as the then “perfectly nice and successful firm” into a truly practice-balanced success in the London and international markets. To succeed, however, something would have to give and within three months of his election, Eisenberg decided to turn his back on his legal practice and focus exclusively on effectively managing the firm’s growth.

He remembers it as a daunting time, when he had to face the risk of giving up a career that he had been successfully progressing for ten years, for a management position based on little direct experience or training. He is pragmatic, however, saying: “You have to take these risks in life to discover interesting new things.” It is an outlook reinforced by his early career when he undertook two degrees and a Masters, and worked at law firms in Johannesburg and the Channel Islands before settling at Berwin Leighton in London in 1989. From there, he became partner in 1996 and joined the management board in 1997, a move that cemented his interest in the strategic direction of the firm. When he was made managing partner two years later, he was only 37, but had already experienced enough to know that he could handle change.

Beyond the personal challenge of accepting the unknowns of the managing-partner role, Eisenberg immediately faced the task of effecting the firm-wide growth that the strategic review had promised. Goals included increasing the firm’s size in London, expanding abroad and generally presenting a more proactive and energetic face to the market. Eisenberg was also determined that the firm should strengthen its corporate, real estate and finance practices to become a better-balanced City firm with an international capability. He further explains: “The transformation had to occur over a very broad spectrum of things internally, across people and working practices, as well as externally in how the market perceived the firm.” With such ambitious goals, it was inevitable that the following years would be busy. The most notable task, however, was the 2001 merger with Paisner & Co. Not only did this create a better practice balance across real estate, corporate and finance, but also set the stage for the firm’s international development, since reinforced by the firm’s strategic alliances with Kramer Levin Naftalis & Frankel LLP in New York and Paris, and Studio Legale Santa Maria in Milan and Rome.

There were challenges in successfully becoming Berwin Leighton Paisner. Among other things, the firm needed to rebrand, departments had to be restructured, the systems of the two firms had to be fully integrated and the partner-compensation system reviewed and changed. For Eisenberg, however, the real difficulty lay in “extracting the value that we instinctively felt there must be from the merger of the two legacy firms”. It can be easy to fall into the trap of perceiving a merger to be a strategic goal; that through the very process of a merger, a firm will extend its competitive capability and win market dominance with enhanced geographic reach. However, whether a merger actually results in tangible benefits that couldn’t have existed if the firms had remained separate is a question up for debate and gives credence to the many firms that have rejected the merger route to remain independent. For Eisenberg, the answer lay in realising that real success would take a long time and a lot of determination. “People internally have to learn to behave in new ways because they’re part of a new organisation. People externally have to be convinced that what you say about the new firm is actually real,” he says. This long-term view has been supported by processes implemented in the years since the merger. For example, to better integrate the firm’s people and improve its core client service, Berwin Leighton Paisner has invested in the firm-wide implementation of a new practice-management and knowledge-management system, as well as an effective CRM capability.

Despite measuring success in years rather than months, Eisenberg is quick to argue that the merger process was very smooth and integration happened quickly, backed up as it was by clear, strategic goals and strong cultural similarities. However, considering one of the core reasons for the merger was to expand the corporate department, the timing couldn’t have been worse, as the merger completed just as the M&A market collapsed. Eisenberg admits that it was hard. “We created this big corporate department and shortly after the merger there was no work for anyone to do,” he says. “It became very difficult to prove internally and externally that this great new corporate department was stronger and more successful than two separate ones.” It is to the firm’s credit, therefore, that last year Berwin Leighton Paisner was the leading law firm for AIM floatations and achieved an impressive record of 13 IPOs. The reason, Eisenberg explains, is a lot of determination and a considerable marketing effort.

It’s a good example of success in the face of adversity, but it is even more impressive when Eisenberg explains that the firm didn’t need to make any redundancies in the first year. A merger in itself often demands some cutbacks as a natural consequence of the integration of two teams. For a merged entity that was also facing a tough corporate market, it seems highly improbable that a department, now double the size, could be sustained in its entirety. Eisenberg explains: “We were pretty clear that we were not doing this to save on costs; everybody was given a fair opportunity to prove their place in the new firm.” Admittedly, a year later, the economic downturn raised questions about staff numbers in certain areas, but Eisenberg says this had little to do with the merger process. Whether true or not, it is at least a good reflection of his belief in the firm’s strategy so far.

The creation of Berwin Leighton Paisner has become something of a best-practice scenario in the legal profession. Whether the firm will repeat the experience with further mergers on an international scale, appears, for the moment at least, to be unlikely. The firm’s international alliances are strategic, says Eisenberg, designed to create long-term relationships that will gradually bring the firms closer together without risking the expense and uncertainty of lengthy merger negotiations. It is a comment that seems to belie the apparent ease with which Paisner & Co and Berwin Leighton managed their negotiations and integration, but it ably demonstrates the fact that no merger, however strategically right, is ever easy. Eisenberg says that they did consider international mergers or opening Greenfield sites in other countries, but decided that the alliance route would provide excellent firms from day one in countries where capability was needed. He also adds: “It gave us the luxury of time to bring the firms together gradually.”

The firm has had a hectic few years of dramatic change and, with Berwin Leighton Paisner now firmly entrenched in the successes of the London market, perhaps Eisenberg feels it is time to take stock and even sit back a little? On the contrary, he is full of fighting talk: “We are presently engaged in a process of continuous and radical change on a broad front across the firm,” he says. “What we have achieved over the past few years is just the start, the best is yet to come.”

As for Eisenberg himself, at 41, he still has many years of a career ahead of him in which he hopes to continue to play a key role in management. Ultimately, however, his intention has always been to go back into practice once he’s finished his term as managing partner. When that will be is, of course, uncertain. There is little doubt that the successes of recent years will afford him the ‘managing partner’ title for many years to come. But Eisenberg is also realistic and knows that all leaders have a lifespan in what they can contribute to a particular organisation. We may wonder how he will cope when he returns to the coalface and corporate finance after many years in management, but Eisenberg clearly has few concerns. “I’m no stranger to change,” he says, “I moved from South Africa to England and from being an M&A lawyer to management. Moving back to client work will be another transition, no less exciting or thrilling than any of the others.” There is no doubting his conviction or his ability to weather change. It is likely, when that day comes, that the real challenge will lie in finding a worthy successor to a managing partner who can truly claim to have fulfilled his goals and transformed his firm.