Profile: Arthur Ferry

Chief financial officer Arthur Ferry has further developed the business-planning process at the London office of global law firm Baker & McKenzie.

By Caroline Poynton

Arthur Ferry, chief financial officer at the London office of Baker & McKenzie, loves team sports. He takes a similar team ethos into his working life, believing that you have to be flexible and make time to work well with people. That’s an attitude that should work particularly well in a global firm seemingly keen to shake up its reputation for having very disparate offices and operations. Instead, the firm now appears to want more client focus and cohesion. And the work of new recruits like Ferry seems indicative of this strategic shift.

Of all the international law firms, Baker & McKenzie has long been able to boast global dominance, at least in terms of its geographical footprint. With more than 3,400 lawyers spanning 38 countries, you’re unlikely to find yourself too far from a Baker & McKenzie office, no matter where you travel. But unlike many of its rivals, Baker & McKenzie has taken an organic approach to growth, giving each new office a level of autonomy that supports local expertise and cultural sensitivities. No one office or country has dominated the firm’s outlook – few would describe Baker & McKenzie as ‘American’, for example, despite its US origins.

Some have described Baker & McKenzie’s growth as something of a ‘franchise’ operation, and the firm has, at times, come under fire for lacking operational cohesion or any distinctive global brand. But the critics cannot argue with the figures, which suggest that there’s something about the Baker & McKenzie model that definitely works. In the three years to 2007, for example, there was a 63 per cent rise in profits per partner. And in early 2007, the firm broke through the $1m average profit per equity partner (PEP) barrier, giving it both a financial and a psychological boost for any business challenges ahead. But while the strategy so far has proved undoubtedly successful, signs from the firm suggest further development is in store.

Change in the air

Arthur Ferry, for instance, joined Baker & McKenzie in September 2007, following a three-year stint as finance director at CMS Cameron McKenna. Some might see his path as a fairly straightforward one. After all, he’s building on financial success, not reversing a downward trend or having to start from scratch. But with Ferry, there’s the immediate impression he was scooped by Baker & McKenzie to develop the chief financial officer role. For a start, he has amassed a wealth of experience, having spent over 30 years in senior finance roles across a number of sectors, including professional services, oil marketing, mining, metals processing and the utilities sector. “I have had experience of running the finances of an operation as well as building new business,” he says. He describes his 14 years with BP, for instance, as the best kind of learning academy he could have hoped for, because “there is a real customer focus in such organisations”. He has also witnessed, and worked with, law firms from the client side. “I understand both sides of the equation and I know how important it is for law firms to understand their clients’ needs and priorities,” he says.

Client contact

The decision to recruit a UK CFO with this level of wide-ranging experience and corporate/client understanding points to a strategy already alluded to by the firm’s senior management. Prior to a partnership meeting in December 2007, the firm’s chairman, John Conroy, told The Lawyer that “greater brand clarity will enable us to provide a value proposition for clients that’s distinctive”. The firm has also been reported as wanting to deepen major client relationships and enhance core practices; an aim reinforced by the firm’s recent reduction of its main practice areas to just 11.

To become a counsel of choice on a global level suggests a firm that is taking a far more integrated approach to its operations, with a stronger emphasis than ever before being placed on the client. For Ferry, this global strategy fits well with his business and finance experience. For a start, he has been given decision-making authority across a swathe of areas, including abnormal fee arrangements, client write-offs and investment decisions in different sectors. For this, he has assumed not only a strict internal finance role, but also works very closely with the firm’s business-development function. “Understanding the client side of the business and working with the business-development team is vital in ensuring the growing success of the partner community,” he says.

Externalising the finance role to incorporate a client-facing agenda is perhaps no better demonstrated than in the work Ferry has already achieved in assisting the firm’s business-planning process.

Planning for the future

Although the firm has long created individual plans – partner, practice, performance, marketing and business-development plans, for example – Ferry says his experience has helped him further integrate these various aspects. “Training has shown that business plans are far more effective if they are mapped to the firm’s overall strategic goal,” he says.

To achieve this, Ferry has spent the early months of his role addressing the business-planning process. “Gone are the days when law firm budgeting was based simply on the number of fee-earners, the rate they charge and utilisation,” he says. “Ensuring you really understand what drives your clients’ business enables you to provide them with the right suite of services to meet their needs. Then you can ask yourself where you can take your client base. How will you develop your practice? Everyone has joiners and leavers too – how does that affect the plan? How do you shape your manpower plan to best suit your practice needs?”

This information has then been interwoven into one business plan, which feeds into performance measurement. “The plan is designed so that everything is integrated and we look at how all the functions – HR, marketing and facilities, for instance – can support and underpin it.”

Implementing such a change in the first six months of taking on the CFO role has a real ring of bravery to it, especially in a law firm environment where partners can be slow to embrace new ideas. But Ferry has a key advantage in that his ideas fit well into the firm’s overall strategy for change, particularly in terms of improving the firm’s overall integration and client focus. “I believed this change would be important, but even before joining the firm I discussed everything with the managing partner, Gary Senior, and the rest of the management committee. Everything was endorsed by them and the process for the business plan has been very much developed within the framework for the firm’s global plan,” he says.

Dealing with doubts

Even with senior management support, Ferry knows there are always obstacles to implementing new processes. “There’s always some degree of hesitancy to change. And you need to allay those fears,” he says. “The first or even second year of any new approach is unlikely to be easy, but by the third year I hope the fee-earners here will realise that this approach is far more streamlined and easier to understand and manage.”

It has to be said that Ferry is not implementing such change at a particularly easy time in the market generally. Although firms on the whole enjoyed a highly successful 2007, Baker & McKenzie included, the first chapter of 2008 has been fuelled by fears over the impact of the credit crunch. According to a recent YouGov survey, conducted on behalf of The Lawyer, 34 per cent of lawyers in UK law firms believe there will now be less work to go around – although litigators and insolvency lawyers may well be relishing the prospect of increasing workloads in the current climate. Ferry agrees, however, that the market for many firms has been relatively quiet since Christmas, so this period to year-end will be particularly important.

In balancing the demands of a changing financial climate, together with the new strategic aims of the firm as a whole, Ferry has his work cut out. But there’s little doubt that he was chosen to take the financial helm because of his rare combination of business acumen and financial know-how. That’s clearly what the firm needs when striving to build on its global ambitions. To choose a CFO with real commercial understanding and a financial outlook geared specifically to developing the firm’s client base, must also be a wise move for a firm now looking to really fulfill the potential of its global network.

Since joining the firm in September 2007, Ferry has already shown himself able and willing to implement change – and that he can work closely with the management team to help drive through the firm’s overall strategy from a client-focused financial perspective. These are all signs that, far from resting on its laurels, Baker & McKenzie is more than ready to make its next strategic move.