Is your firm’s leadership performing?

While performance management and partner remuneration remain hot topics in legal management, too little attention is often given to the firm’s leaders and their suitability for the role. Peter Scott, head of strategic development at Steeles Solicitors, looks at management and leadership, the differences between the two, and how firms can ensure that they get the best people, who have the necessary resources and support to do the top job well.

Management of law firms has come a long way during the past 15 years. Many firms, both large and small, have moved from a position of no management at all to now being well run, highly profitable businesses. Others are still at an early stage of development. Yet many law firms, however well managed, are now experiencing the upheavals that change can induce.

Managing that process of change to meet the increasing demands of clients, as well as the general challenges now facing the legal profession, may put even the best of managements under severe pressure. Indeed, I am increasingly being asked by firms what they should do about a senior or managing partner who has ‘lost the plot’.

The spotlight on under-performing partners is now also focusing on the performance of those in positions of leadership and management, as firms seeking to build a culture of higher performance, designed to make them more competitive, begin to ask whether they are getting value for money.

I differentiate between leadership and management. It has been said that leadership is about doing the right things, whereas management is about doing things right. Given the continuing pressures that the processes of change are exerting, the roles of law-firm leaders and managers need to continuously evolve to cope with the next stages of their firms’ development and to meet the challenges of the future. And given these challenges, I would suggest that what law firms now need above all is good leadership to do the right things.

A firm looking to raise the performance of its leadership should begin by asking a number of questions:

Does the firm have people within it capable of successfully performing the roles necessary to achieve the firm’s goals?
If such people exist, are they prepared to carry out such roles?
If they are, then are the partners prepared to pay the price needed to secure the services of such people in whose hands the partners are willing to place the future of the firm? (Partners should also ask themselves whether such a person might be worth even more to a competitor.)

If the answer to any of those questions is ‘no’, then a firm has some very hard thinking to do if it is to survive and prosper in the future, because a ship without a captain at the helm will lack direction and will most likely founder.

What kind of performance and qualities should firms look for from their leaders in today’s fast-changing legal landscape to give themselves the best chance of succeeding (or for some of surviving)?

If a firm has someone who fits the bill, then what steps can the partners take to try to ensure that the qualities and skills possessed by that person are harnessed in the best possible way to help add the greatest value to the firm?

Here are a few pointers that may help any firm currently considering this issue:

Be clear as to the role or roles required. While all law firms need leadership, the nature and extent of that leadership will differ from firm to firm and according to circumstances and needs. I earlier differentiated between management and leadership. In defining the role of the leader, this differentiation is crucial. In some law firms today, the traditional combination of a relatively titular non-executive senior partner and a managing partner (who is often the real boss) is giving way to a concept, hitherto more often seen in North America than here, of an executive chairman/senior partner (who is the leader) and a managing partner who is more of a CEO/COO, dealing very much with day-to-day operational matters. If a firm is thinking along these lines, then what roles should that executive chairman/senior partner perform within the firm?
First and foremost there is the need to provide leadership to the firm, especially in developing the firm’s strategy. A law firm, however large or small, needs leadership that has a clear vision of what it should become. It is often said that leadership is about vision. However, that vision always needs to be tempered by a realistic appreciation of what the firm currently is (or is not) because too often, so-called strategic plans are no more than unrealistic and unachievable wish lists that stand no chance of ever being implemented. That realistic vision then needs to be accompanied by a determination to achieve the vision;
Then there is the role of managing client relationships with important clients and taking a lead in the firm’s profile raising and business development. A good leader of a law firm, as part of performing such a role, can and should become one of the best rainmakers in the firm. Clients, particularly those in senior positions, usually want to meet those professional advisers whom they consider to be on their own level. This requires the law-firm leader to be able to deal comfortably with clients of all kinds and seniority on their own levels. For many this is not an easy task;
A third important role is to provide the pastoral support, not only for the partners but for everybody in the firm. Having the trust and confidence of everybody in the firm is crucial to this role, as well as having the ability to relate in a human way with colleagues. Having a person in the firm performing such an important role can be invaluable when needing to build consensus for change.

What qualities and skills should a firm look for when seeking to appoint a leader?

The type of person capable of performing roles such as I have outlined above is likely to be someone who is inspirational and who can get the best out of people, often leading by example. Running a law firm is more often than not about taking people with you, rather than telling them what to do. A leader will need to have and maintain at all times the trust and confidence of colleagues in order to succeed;
A law-firm leader will also be likely to challenge everything about the firm in order to drive it forward successfully, asking questions such as:

– Why do we do things this way?
– Why are we prepared to accept such poor performance from some of our people?
– Why do we have all these unprofitable offices?
– Why do we continue to do this kind of work?
– Why do we have so many partners?’

By focusing on the big issues in this way, a good leader will tend not to shy away from tackling any sacred cows that exist, and without which, no progress is likely to be made;

To lead a law firm through difficult times will also require the ability not only to clearly think through and get agreement to strategic plans, but also to implement those plans. In a partnership, this can be a particularly difficult task and is where the leader’s people skills will come to the fore.

You can probably recognise leaders of certain law firms who have these qualities – they are the ones running firms (large and small and with varied businesses) that are some of the most innovative in terms of how they work and look after their clients and, as a result, are some of the most competitive and profitable.

How much time should an executive chairman/senior partner of this type spend on these roles? And how should such roles relate to those of a CEO/COO/managing partner?

Clearly the amount of time an executive chairman/senior partner who has such roles is going to spend on them will depend on the size of the firm and how active it is in terms of its development.

On the other hand, a CEO/COO/ managing partner in this dual relationship, if the firm is of any size and depending upon its development plans, will need to spend probably 100 per cent of his or her time on that role. The CEO/COO/managing partner would report to the executive chairman/ senior partner on a regular basis and together they would deal with key decisions.

Firms should, however, try to avoid the kind of managing partner model that I see all too often, that is, a managing partner who not only has responsibility for managing and administering every aspect of the day-to-day operation of the firm but who also has to continue doing client work and recording 1,000 or more hours a year. This is common, and not only in small firms. Such managing partners often have very limited success in terms of developing their firms, because it is very difficult to do justice to both the needs of the firm and those of the clients. Something has to give and it is usually the interests of the firm that suffer because priority is given to client work. Trying to perform such roles means the incumbent never has a chance to surface long enough to consider where the firm should be going. I see firms that have so-called managing partners of this kind and they are usually struggling to do little more than administer their firms. They could bring so much more value to their firms if they were allowed to focus on doing the right things.

Many firms are now coming to recognise that they need all these roles to be performed if they are to be the efficient and profitable businesses they strive to be and that it is not practical for just one person to do everything. What is required is a team made up of people, with the appropriate qualities and skills, who together can provide both the leadership and the management required.

Many firms, however, will say they cannot afford such luxuries, fixated as they are on everyone grinding away at the chargeable hours. I would instead ask – can firms afford not to have such a leadership team in place?

1. Provide your leaders with a clear brief and authority to deliver

Many who are working hard at managing their firms have been given little or no brief and even less authority to get things done.

While it is often said that the best leaders will by their actions earn their authority, it will still be sensible from the outset of an appointment to be clear as to what is required of the new leader. Steps must be taken to ensure that, having appointed a person to the job, that the partners in the firm provide the support that person needs to get things done. This will involve partners being accountable, in the sense that once decisions have been made by the partnership, then the partners will do whatever is required to make sure those decisions are implemented.

This may mean that some partners will have to consider whether they are prepared to be managed and commit to putting the interests of the firm before their own personal agendas. Without that pre-requisite, the task of leadership in a law firm is always going to be an uphill struggle.

How many law-firm leaders feel utterly frustrated at times because a few of their partners continue to obstruct the implementation of previously agreed decisions? This may mean that the governance structures in the firm will need to be overhauled so as to be aligned with objectives for progress to be made. If they are not, it may lead to the obstructive partners leaving or worse, the firm losing its leader.

2. Performance needs to be measured and rewarded

How should you measure the performance of a leader? It is of crucial importance to set down, at the outset, realistic and achievable goals so that the person appointed to carry out the leadership role knows what he or she is expected to achieve and over what period. Taking a law firm to a higher level of performance is never going to be a short-term business. Instead, it is a hard grind over a long period with, more often than not, small incremental progress being made rather than quantum leaps.

Key to successful measurement is to ensure that everybody knows what is expected of them and that the law-firm leader is given the necessary tools to get the job done.

3. Sanctions may be required against those who refuse to comply with what has been agreed

The ability to lead a law firm is not about telling partners what to do but more about taking them with you on the journey. There will, however, be times when rules are broken and discipline may need to be imposed.

Even though partners are more likely to respond to someone who has earned their respect and confidence, having the ability at the end of the day to apply a sanction against someone who refuses to act in an accountable manner may be necessary, even though that sanction is not ultimately used.

However, if the partners in a firm do not regard the performance of the leadership role as at least as important and adding at least as much value to the firm as racking up chargeable hours, or they fail to recognise that importance by paying appropriate rewards to secure a person with the right qualities and skills, then such a firm may never achieve its full potential.

Finally, while leadership should be about bringing out the best in people, it should also be focused on bringing on the future leaders. But, having done so, what future is there for the redundant leader who, now aged 50 or 55, no longer has a client base having passed it to other partners?

A managing partner who has been at the helm of a firm for five or ten years likely to have amassed a wealth of experience. If he or she still has the energy and hunger (and I emphasise these as pre-requisites), then why throw that experience away, as some do?

It is understandable that the successor may not wish to have the former leader breathing down his or her neck. However, to avoid losing a valuable resource, a firm would be well advised to examine in which other roles the former leader could best add real value to the firm.

Such alternative roles may include a return to fee earning (difficult for some), a client-relationship/business-development role, another management role if the genuine need exists or possibly a mix of several roles, either on a full-time or part-time basis.

There is an urgent need to address the problem (for many firms it is a serious problem) because the lack of positive solutions is likely to dissuade many partners who have potentially excellent leadership skills from contemplating a management position.

If law firms are to attract the highest-quality people to lead them, then they need to begin to positively address longer-term succession plans for when those that have taken on the burdensome task of leadership will eventually hand over the reins.

To adapt a well-known phrase: law firms will get the leadership they deserve.

Peter Scott is head of strategic development at Steeles Solicitors, in London, and also runs Peter Scott Consulting where he advises law firms on strategic and management issues. He was formerly managing partner of Eversheds London. He can be contacted at pjscott@blueyonder.co.uk