Generating leaders: Why you should embrace the priorities of Gen Y

“You never actually own a Patek Philippe. You merely look after it for the next generation.” The familiar advertising slogan of the upmarket Swiss watchmaker could just as easily have been written for the partnership structure of most major law firms.

The traditional model is based upon the expectation that making partner is the career ambition of most associates and that partners will spend the rest of their careers acting as custodians of their firm.

However, given the current challenges facing the partnership model and the changing aspirations of associates these days, is the expectation of handing over the firm to the next generation of partners in a better shape than it was when you inherited it any longer valid or sustainable?

Inter-generational expectations

Not so long ago, it was perfectly feasible for associates to have a real prospect of partnership and for partners to expect to spend their whole career at one firm. But this is no longer the case.

With equity under pressure, partners are selling their services to the highest bidder. There is also a new generation of associates for whom partnership is no longer an attractive proposition. As a result, the sense of long-term continuity that was once the preserve of law firms is under real threat.

In some ways, it’s not unlike the challenges facing western society more generally. In his recent BBC Reith lecture, professor Niall Ferguson said “the biggest challenge facing mature democracies is how to restore the social contract between the generations”.

Many of today’s young workers feel resentful that the baby boomers somehow squandered their inheritance, and many of today’s young associates believe that partners are pulling up the drawbridge to partnership behind them.

Law firms need to address a number of key questions if they are to continue to regenerate themselves. After all, electing new partners – and subsequently developing them to be successful practitioners and leaders – is the lifeblood of any firm.

Firstly, firm leaders should consider how to persuade the current generation of associates that it is worth staying with the firm in the long term. This challenge comes at a time when partnership prospects are at an all-time low and when associates are expected to work longer hours than ever before to sustain productivity and profitability levels.

Associates used to be prepared to wait until they had enough professional experience under their belt to assess whether they were likely to be considered for partnership before turning to other alternatives. More recently, however associates have started to decide much earlier in their careers that either they don’t want to become partners or that the price to be paid to achieve it is just too high.

Clearly, firms need a certain level of attrition to make their business model work, but the loss of top talent from private practice – particularly amongst those with entrepreneurial qualities – is concerning.

The associates of today are not prepared to wait for the deferred and uncertain reward of partnership. They want the sort of early responsibility that is hard to access in private practice. And, as we all know, the attrition of associates who regard the punishing and unpredictable hours as incompatible with family life has been high for some time. The consequence of these generational shifts in career perspectives is to leave firms with a smaller pool of talent from which to select the next generation of partners.

But, thankfully, the situation doesn’t need to end in generational stalemate. Associates up to the age of around 30 (the so-called Generation Y) want work that provides opportunities for learning, a chance to work with likeminded colleagues and a collaborative environment. They have strong ethical values, social networking tendencies and a collaborative style of working.

Law firms can of course offer all of these in abundance. But what we have right now is a generation gap. Just as parents rail against their children for being ungrateful and children rail against their parents for not understanding them, so too in law firms there is a mutuality of interest that could be exploited for the benefit of all with a little more understanding on both sides.

What needs to happen is more open dialogue across the generational divide. If they actively listened to their associates, partners would learn that associates are not adverse to long hours or hard work, but that they want that work to be stimulating, developmental and purposeful.

Similarly, if work was allocated with each associate’s development and career interests explicitly in mind, a more motivating relationship between principal and associate would emerge.

At the same time, associates would need to understand the commercial pressures facing their firms and be prepared to discuss how work could be organised more efficiently and with greater flexibility and adaptability from each member of the client service team.

With more open dialogue, flexibility and understanding on both sides, a new ‘deal’ could be struck that enables more innovative working patterns, including virtual team and home working, time out periods and developmental work assignments.

By shifting the relationship dynamics from parent-child to adult-adult, a greater sense of shared purpose could be created, with associates able to take more informed decisions about their future careers.

Alongside this shift in the relationship between partners and associates, firms need to take a long hard look at their equity structures. To enable enough of the next generation to participate in the firm’s future, they should foster a culture of trust, openness and flexibility, where senior partners feel able and willing to reduce their equity stake, while continuing to contribute to the success of the firm during the latter stages of their career.

Grooming future leaders

How will succession planning within law firms start to change as Generation Y are elected partners? The class of 2012 are likely to have been born sometime in the late 1970s or early 1980s and, with most commentators describing the millennium generation as those born between 1981 and 1993, we are at the start of that next generational shift.

It will be fascinating to see whether the next generation of partners take a different view from their seniors on their expected tenure as partners and on their relationships with their associates, who will think and act more like them. It is likely that the next generation of partners will have different expectations of their firms and different perspectives on their longer term careers.

With the emergence of a new generation of partners who may see partnership as less of a job for life and more as a potential stepping stone to other things, it will become more important than ever for firms to nurture their young partners and to find ways to bind them into the firm as the next generation of practice and management leaders.

Succession planning has always been something of an informal activity in most law firms. Leadership positions are typically appointed either by the managing partner (following soundings with influential practice partners) or a partnership vote.

It is seen by many as inappropriate and potentially divisive to single out some partners as future leaders in the context of a partnership of equals. For others, it is considered just too difficult to invest in a group of partners with potential, without the certainty that they will have the required credibility of their fellow partners later in their careers.

As a result, partner training and development tends to be provided for the benefit of all, while the grooming of future leaders is done either on an ad hoc basis within practice groups or not at all.

However, given the size and complexity of law firms and the challenges their leaders face today, there must be a better way to tackle this issue than leaving things to chance and hoping that someone with the right skills, experience and ambition will be appointed to senior office by consensus.

It will become increasingly risky for firms to rely on practice politics or individual popularity, or to continue with a regime of Buggins’ turn (appointing people based on rotation rather than merit) to choose their future leaders.

The challenge is not made any easier in tough times when the need to take unpopular decisions makes leadership roles unattractive to the vast majority of client-facing partners. Partners may complain about ‘the management’ from the back benches, but few want to take the roles on themselves.

At such times, it couldn’t be more important to choose leaders who have already gained relevant experience and can demonstrate a track record of bringing about change, taking sound business decisions and motivating teams.

Law firms need to overcome their resistance to any form of differentiation between partners. It is all very well having an egalitarian culture founded on all partners being equal in status and even remuneration. But, ignoring the fact that some partners have greater leadership qualities than others leads firms to appoint the biggest billers or the most popular client partners to leadership roles when quite different skills are required for success.

The best firms will find ways of identifying partners early on in their partnership career who are able to look at the bigger picture, have an aptitude for business decision making and command respect from their peers.

These young partners need to be mentored by more senior partners and actively given opportunities to experience situations outside of their client work and network of colleagues. Exposing them to strategic business issues facing the firm and working on these issues with partners who they wouldn’t normally come across can help with singling out those partners who can contribute more to the firm than client pleasing and fee-earning.

Inviting young partners from different practice areas or offices to work together on specific firm issues widens their perspective, raises their visibility with senior partners and often results in a new enthusiasm for the firm and its leadership. It takes them out of their comfort zones and develops their skills, while at the same time helping the firm to come up with solutions to real business issues.

Such organic developmental experiences go a lot further than formal leadership training programmes for partners. These programmes have their place in partner development, but don’t enable partners to experience what it’s really like to take executive decisions or make recommendations on complex or contentious issues.

By identifying a cadre of potential leaders for the future, firms can have a greater choice of candidates at the time of management appointments or leadership elections. In effect, a feeder group of potential leaders is created across practice groups and geographies – a group of partners who have benefited from practical, planned and tailored experience over a number of years.

This deepens the bench strength of management skills and ambitions within the firm. Having choice and even contentious elections in this context is healthy for a firm. It helps partners to explore what they really want and need from a leader, rather than voting for the partner they know best or think will represent their personal interests most closely.

Unlike a corporate chief executive officer, a managing partner has no power of office to hire, fire or change a partner’s remuneration. Instead, he has to inspire his fellow partners with a vision for the future and convince them to put the interests of the firm first. Rather than being feared like many CEOs, the personal authority and views of a managing partner are constantly challenged and, once his term of office is over, the future is uncertain.

The stakes are high for both the firm and the successful appointee. It is beholden on firms therefore to appoint the right candidate with the right experience, expectations and ambition. This can only be done if leadership succession has been thought about and planned for well before the next election.

A more pluralistic approach will of course be more necessary than in a corporate environment, with several potential candidates identified for each leadership role. But, by taking a systematic approach to identifying and actively developing the next generation of partner talent, there is a much greater chance of successful leadership appointments.

Jill King is a consultant and the former global HR director at magic-circle law firm Linklaters (jillking1@virginmedia.com)