Covering all bases: Are law firms ready for interim management?

Simon Slater recently moved from his position as director of strategic development at Taylor Wessing to set up a consultancy division within First Counsel that will offer interim-management services to law firms. Caroline Poynton asks him about the challenges of HR in law firms and whether firms are really ready to embrace the project-management skills of an interim manager.

Tell me more about your new business

We have set up a separate division alongside the recruitment business to provide consulting services to the legal market. However, it’s a consultancy with a difference because there’s both a resources and advisory side to it. Our core service is to provide senior interim managers to law firms. But that will be supported by the provision of advisory services to help law firms with the execution of their strategies. Most law firms struggle not so much with what their strategy should be, but rather with its implementation. The idea is to help law firms when and where they need it. Together with the recruitment business, our aim is to provide a total human-resource solution to the legal profession.

What do you see as the major trends/challenges for law firms in the current marketplace?

There is a now a heightened awareness of the importance of business management in law firms. Over the past 15 years, legal practices have, quite rightly, invested heavily in professional managers to help them run their businesses more effectively, but, right now, many of them are asking whether they have the right calibre of people, while also reviewing the way in which these people actually work with partners to achieve their objectives. A major challenge facing law firms is the ability to make good, long-term decisions and getting the right people managing the business is crucial to that.

The problem is that, all too often, law firms recruit in haste and repent at leisure. They are arguably not as careful as they should be in their recruitment of senior managers, which means that these relationships often don’t work. This is one of the reasons why major law firms are now thinking that there are times when they need to bring somebody in on an interim basis while they take the time to find the right permanent director of, say, finance, HR or business development. We are seeing these kinds of gaps occurring in law firms with ever greater frequency and this is where a safe pair of hands can prove very useful. Interim managers are immediately effective and can add a lot of value over a short period. It also makes good sense from the point of view of business continuity and risk management.

On the strategy side, I think that law firms have spent the past five to ten years finding out what strategy is all about. But there is often a big gap between deciding what the strategy is and then implementing it to its full potential, and we find there can be a significant disconnect between what law firms say that they are trying to achieve and the daily lives of the people they employ. This lack of engagement between employees and their law firms is arguably the most worrying weakness and represents another major challenge.

How do you choose the candidates that will make good interim managers?

The people who are choosing to make themselves available as professional interim managers are those that have been in law-firm management for anything between five and fifteen years and now wish to optimise their experience. They know the inside of law-firm partnerships intimately, but have made a decision to work on more of a project basis.

Often, such projects are what I would call mission critical, when firms need is a seasoned senior manager inside their business just for the period in question. They fill an important gap, whether it’s triggered by a sudden departure, a post-merger integration project or simply because of maternity/sabbatical leave. What the firm gets is the undivided attention of the interim manager without them getting distracted by internal politics that inevitably slows down decision making and progress in law firms. They are absolutely focused on the job in hand and on achieving results.

Filling a gap is one thing, but what happens if the firm has serious existing problems, for example, underperformance? Doesn’t the task facing the interim manager become impossibly complex?

A generic problem for law firms is addressing underperformance, be it in the partnership or in management roles. None of us like confrontation, but law firms are a breeding ground for issues avoidance and drift. In terms of an interim manager going into a law firm where there may be concerns about underperformance, the benefit is that these are very experienced people who have seen it all before. They can, at the same time as performing their role, also provide advice to the firm on which of the issues they really need to deal with to move forwards more quickly. They are able to add to the debate without having an axe to grind.

Tell me more about your day-to-day role

The first thing I have been doing is candidate acquisition, which involves finding the right people to offer to the marketplace under the brand name First Counsel. We want our people to be senior professionals with a first-class track record, managers who are going to represent us well and add significant value to the businesses with which they get involved. Second, I will develop relationships with law firms so that we become their first port of call for the provision of the best interim executives.

At the moment, my priority is getting our name out there and meeting people. Ultimately, however, when the business is established, I will be managing the relationships between First Counsel and its law-firm clients, between the interim manager and First Counsel and, of course, between the interim manager and the law firm. I will basically be ensuring that everybody is happy.

What do you think will be the greatest challenge in that?

I think there’s a job of education to be done in the market. Over the next six to nine months, I will meet and listen to people and try to educate them that interim management is a sensible alternative both to conventional consultancy and, indeed to doing nothing. That will be the first challenge. The next one will be to demonstrate the benefits of interim management over a traditional consultancy, not least of which is financial: you get somebody inside your business dedicated to doing something only for you and you pay 40-50 per cent less than the consultancy rate you might otherwise face.

Is HR still seen as a separate rather than integrated function in a law firm?

Yes it is, although many firms have long since recognised that HR has strategic importance for long-term success. They know that it goes beyond simple compliance or being seen as an operational cost and that an HR strategy that creates true linkage between recruitment, training, career management and retention can play a critical role in the success or failure of the practice. As a marketing professional by training, I passionately believe that an effective HR strategy is the best marketing strategy for any law firm. If firms invested even more in their people’s development and retention, then they would be proportionately more successful.

Since we have entered a period of sustained downward pressure on margins, firms have give their people the tools to go out and unlock the true potential of the business. Sadly, at present, in an average 50-partner law firm employing, say, 400 people, there could conceivably be as many as a third of them that do not feel fully engaged with the practice. Clearly, this needs to be addressed and good HR management should be the driver.

What HR strategies have impressed you?

There are certain strategies being implemented by certain firms that I admire. For example, any law firm that has made the decision to have only one type of partner - equity partners - has adopted a very clear strategy, which removes any opportunity for ambiguity. In such firms, you’re either an equity partner or you’re not and people are absolutely clear about what they need to do to get the position, and then stay there. Firms that have a fixed-share or salaried-partner tier often lack the same clarity of purpose or cohesion and this can lead to more difficult performance-management issues. I am also not convinced that it is a really useful rung on the career ladder. Those firms that prepare their lawyers adequately, and well in advance, for the rigours of equity partnership and management are more likely to reap the benefits, but only if there are comprehensive performance-measurement systems in place.

In terms of particular firms, DLA has long recognised the value of its people and has adopted a certain style of behaviour that has become a tangible asset both within the business as well as to clients. Over many years, it has overturned a reputation for having a somewhat aggressive, dog-eat-dog culture into one today that although still very ambitious, is an environment in which people are committed to the organisation and its vision. DLA people are more engaged with the goals of the business because they have been supported by the firm’s strong investment in leadership, communication and training. The firm has also worked hard to ensure that the right behaviours are rewarded, while underperformance is addressed.

A firm like Slaughter and May has a clear sense of its own identity. What it does particularly well is to recruit people in its own image – not necessarily just the brightest or best people, but those who also fit by virtue of being extremely commercial, very down to earth and ultimately able to relate to clients well. They are businessmen and lawyers in equal measure.

On the other hand, you could take a different size of firm like Charles Russell. It too has a strong sense of itself and has invested over the past ten years in attracting and retaining the right people for the business and for its clients. It is a good example of a medium-sized firm that has proven wrong those that five years ago predicted the death of such firms.

Does your service apply to all firms?

We are principally offering our interim-management service to the top-100 UK firms, plus the ten largest US firms here in London. These are the firms that are likely a) to have the need and b) to have the financial resources to justify the service. On the consulting side, we wouldn’t necessarily distinguish between firms in terms of size because we’re committed to helping any sized firm execute their strategies.

Do you approach US firms differently?

Yes, they probably do require an alternative approach as even the largest of US firms in London is a relatively small operation, so their needs are going to differ. They may need someone with more general management skills for a short period, as opposed to someone with narrower, more specialist skills.

Of course, there may also be cultural differences; for example, in the US, the cult of the partner is that much more marked, which will impact the way they use our services. These firms will tend not to have as well developed a management infrastructure in their UK offices as UK firms.

In a year’s time, where will you be?

Our aim is to have created the market for law-firm interim management and to have become the first port of call as a provider. But we have a realistic business plan. In the first year, if we’ve been able to meet the needs of a dozen firms by providing them with senior interim managers who inject real value, then I’ll be very happy. The point is that this is not a volume business; it is about calibre and experience, and achieving results. Above all, it’s about providing the best HR solutions to the legal profession.

Simon Slater is director at First Counsel Consulting. He can be contacted at simon.slater@first-counsel.co.uk