Changing expectations: The role of managing partners in future

Understanding the role - and the skills - needed for the role of managing partner is vital for making a success of it. However, it's ?also important to look beyond the 'soft skills' debate and consider some of the key attributes needed to lead the law ?firms of the future.

Just as the legal market and client services are adapting in the new economic reality, the role of managing partners is changing too. What are ?the key considerations for people aspiring to remain, or become managing partner over the next five to ten years? And, how will the role of managing partner change in future and how ?can you prepare for it?

Patrick McKenna, an American consultant who has made an extensive study of such issues, suggests that "most professionals have a naiveté about the skills and knowledge that are really required to manage a professional services firm".

Often, he says, "they don't squarely confront the reality of their new position and, in their defence, they are the unfortunate victims of a system that ?does a poor job of preparing anyone to be the next firm leader".

To management consultant Kim Tasso, the role of managing partner will change, with "increasing recognition that you can't juggle fee-earning and client demands with the needs of managing a large business that is navigating seismic market and client changes."

"That needs a different skill set and nerves of steel", she says.

Evolving roles

Brian O'Gorman, managing partner of ?Irish law firm Arthur Cox, takes an evolutionary approach to the job. "My ?role will evolve as the firm does", he ?says, citing his involvement in managing client relationships while also being hands on and "developing lawyers and their career paths".

Tasso says evolution means something else; such roles as O'Gorman's, she says, "really means [maintaining] the status quo" with a focus on operational efficiency, cost management and fire fighting.

The maturing firm, she says, also "allows the brief to extend to more strategic matters", such as identifying lateral hires and possible acquisitions.

That process, she says, inexorably recognises that strategic development requires a different skill set. Operational management may be delegated internally, including, "in more advanced firms, to a non-lawyer CEO".

That's a view shared by consultant, Andrew Hedley, who says "we will see a gradual separation of leadership aspects (for example, overall direction, strategy and governance) from operational delivery and the day-to-day management of the business," which he sees as being increasingly professionalised.

Field Fisher Waterhouse's managing partner, Michael Chissick, says the ?role is currently "like being an MD, ?COO, CFO and communications ?team all rolled into one".

That is not dissimilar to Ashkhan Candey of Candey LLP's view. In a smaller firm, he says, the managing partner is "in charge of finance, marketing, personnel, regulatory compliance and the management of people".

To do that, Markus Hartung, himself a former managing partner, says the role needs to change. The three functions of the role - operations, strategic alignment and leadership - should be broken up, he suggests. The former should be delegated to a COO, while the second should be a collaborative effort. The role of managing partner has more to do with leadership - motivating people - than with 'classic' management, he says.

Law Society council member Richard Barnett agrees. "The traditional MP's ?role will change in the medium term to become more of a conduit to control ?the internal structure of the firm," he ?says. This is especially the case when ?it comes to marketing and managing lawyers, he suggests, "allowing professional management a much ?greater say in strategy and day-to-day management functions".

Joining the C-suite

In a corporate age, adopting a ?corporate structure might be the ?way to go for law firms.

DMH Stallard's managing partner, ?Tim Aspinall, feels this change might be inevitable. "The role of managing partner ?is becoming more like a CEO every year," he says.

Echoing Chissick, he says "it is not ?a role that can be performed as an 'interval' for a few years in a partner's ?fee-earning career".

He sees the role becoming a career choice in itself, with the best leaders being headhunted to run other law firms and take them to the next level. Step forward DLA Piper's global co-chair Tony Angel, formerly of Linklaters, as one example.

Others have already gone down the non-lawyer CEO route; one example is Riverview Law. Its chief executive, Karl Chapman, notes that its corporate structure distinguishes Riverview from its partnership rivals. The presence of non-executives is one example: "we don't confuse ownership with management," ?he says.

The difference between MP and CEO is a "more significant distinction than just the different titles would suggest," he says. Nonetheless, he agrees with Tasso, Hedley and Hartung that the role "will change dramatically over the next five years as we continue to grow significantly and as our management infrastructure evolves".

His concerns - organisation, talent and reward, measurement of performance and client care - are identical to those of O'Gorman and Chissick, if arguably given more corporate impetus. Client care is key, he says: "as always, I will spend a significant part of my time with customers".

Mark Dembovsky, CEO of Howard Kennedy FSI, also a non-lawyer, agrees with Chapman that "law firms will need to become more 'corporate' in their approach generally and in their decision making in particular".
That shouldn't, he says, be limited to the largest firms; "the mid-tier will need to take note in order to survive".

Dembovsky suggests there is a need for better structuring of law firms - not least because alternatives to the conventional model means "risk is shared more effectively and active ownership is possible, not necessarily only amongst 'partners' but maybe even on a more John Lewis Partnership-style arrangement".

"It isn't that long ago that partners played at being in charge of IT, finance ?and HR," he notes. "The near futility of ?that approach has become wholly ?apparent to most".

As Dembovsky notes, non-lawyers have taken active roles in law firm management for some time now. But, ?how many law firms are willing, able ?or need to move to having non-lawyer ?chief executives?

In that long-term future, says Tasso, firms will need to "pay attention to succession issues and prepare the firm for the introduction of professional managers at CEO level and for significant practice areas to properly divorce the ownership from the management of the business".

Preparing to manage

So, can you train for your role as managing partner - and should you? Does it help to have led a team or a department?

Each firm's interpretation is different, Barnett says. "It is a sad fact, however, that training for lawyers in management, especially in my day, did nothing to help prepare them for the real world".

O'Gorman feel that "having experience in another senior role in the firm does help" with preparing for the role of managing partner.

Chissick testifies to this himself; his work in building up the technology and outsourcing department, the largest in the firm, "has been invaluable" he says, in addition to understanding his firm's culture and his own values.

Like other respondents, he ?cites leadership training, such as ?Harvard Business School's leading professional service firms course, as ?useful grounding on how to make such ?a vision reality.

Hartung agrees. "It helps to have been through a leadership course, plus regular coaching," he says, noting that the likes of Nottingham Trent, his own Bucerius Centre, Cass Business ?School, Henley Business School and others offer such insights.

To Candey, "business experience of any type is an advantage". But, "if you have access to a trusted adviser (ideally a non-lawyer who has business nous)", that too is advantageous, he says.

Tasso says past experience can help, but "the challenge of running even quite a substantial part of the business is different to managing the firm overall".

Hedley agrees, saying such prior exposure "is absolutely essential ?before stepping into the 'top job'". ?In practice, however, this means that?"the credible candidate pool is quite ?small in many firms".

Hartung agrees that experience is helpful but not a precondition for taking on such role, noting that "training for the role by means of 'hitting the ground running', is hardly available, maybe hardly conceivable".

To Tasso, the difficulty is in shifting from "a short term 'find the fees for today' approach to a longer term 'find the profits for tomorrow' mindset".

Managing partners, she says, "need to consider the overall strategy of the business and the 'portfolio' of services provided, which are often in silos".

"They must consider how they build consensus for and commitment to change amongst the partners - particularly where the change may be unpalatable or bold."

Lastly, she says, "they need to ?learn to focus on doing a few important things really well in a proactive manner rather than spreading themselves ?too thinly."

Leading into the future

What are the longer term aspects of law firm leadership that managing partners should be aware of?

O'Gorman says that "preserving ?and fostering a firm's ethos is key and always will be".

Candey echoes this, saying "make sure you enjoy your job and always seek excellence and loyalty in your team".

Chissick says it is important to feel proud of your firm's identity "but, at the same time, you shouldn't feel restricted, ?or that it is sufficient to keep doing things in the same way."

Tasso agrees, saying: "This will be unfamiliar territory, so the key will be ?having the stomach to consider radical departures from how things have been done in the past".

Chissick suggests innovation, modernisation and transformation "to ensure you're offering the best service possible". This is a theme Aspinall echoes, saying "begin to think like entrepreneurs that don't carry the baggage that law ?firms generally have".

"The old way of doing things won't work in future," adds Aspinall. "Technology, sales, branding, pricing and data will become increasingly important. Build alliances with organisations that have these skills, and ultimately a more complete legal serves business."

It's a similar take to Dembovsky, who says "develop a clear differentiation for yourself and for your firm, surround yourself with people who are better than you are, build trust and empathy, never stop communicating and always listen."

He adds: "Most importantly, agree a direction and work toward that - if you can't get there in a straight line, follow ?a wiggly one - but if you know where you're headed, you'll stand a chance of getting there."

And getting the right support is crucial, says Tasso. "Build a trusted management team who can tackle issues such as technology, marketing, human resources and finance, as well as to look at developing a new breed of leaders with astute commercial skills".

Changes ahead

So what kind of future will managing partners need to anticipate in the coming years? According to the Law Society of England and Wales' Market Assessment Report 2012, corporate client pressures will be one constant.

The sophistication of the procurement process and managing the panel ?process were flagged as important, ?as is the potential impact of new legal service providers.

IT will be crucial for law firms in ?that context, it noted, to avoid jeopardising their own growth by failing to align technology purchasing decisions with ?key business priorities.

Hartung agrees. "The development of technology, in particular the availability of legal know-how for free and what we may expect from artificial intelligence means that future lawyers have to focus even more on that which only lawyers can do."

A greater focus on fixed fees, as well as on maintaining reputations online (particularly in social media), were also flagged as important.

The managing partner of the future is likely to be international - whatever the UK's future in Europe might hold - given that London's value as a centre for legal business has "allowed the largest domestic firms to thrive, despite the low-growth domestic economic climate of recent times".

To succeed in that market, says ?Hedley, managing partners will need to run better legal services businesses. "Think what the component parts of these businesses will be and what will be needed to build a sustainable advantage".

Ben Rigby is a freelance legal journalist