Managing the Partners
We have written extensively in recent years about the changes in the market and the impact these have had, and will continue to have, on the business operations of UK law firms. A shifting regulatory environment (and changes to legal aid), ever increasing competition and advances in technology are forcing firms to consider their business model – and we have long argued that the implications of these changes will include consolidation via M&A (and failures), and the further growth of niche or boutique areas.
However, these effects are felt at a more granular level within the firm, and one of the key issues that has been highlighted in a recent article in The Lawyer is the challenging nature of the role of the managing partner.
Being the managing partner of a law firm has never been an easy job, and one of the key areas highlighted by those managing partners interviewed in the article is the solitary nature of the role. Andrew Lilley, of Travers Smith, suggests that ‘for that reason I found it helpful to work with an external coach’. We would of course advocate this, but irrespective of whether external help is sought, it is vital for the managing partner to have trusted advisors he or she can call on for advice and to provide a sounding board.
Moreover, the pressures on the managing (or senior) partner – which certainly have not diminished in recent years and almost certainly include the challenge of maintaining and enhancing profitability in the face of increasing competition and growing pressures on costs – mean that an effective management team is crucial. Firms may, understandably, not move in the direction of an entirely professional management team, but the top job must be supported by a skilled FD or CFO and, depending on the size of the firm, a COO or director of operations, an experienced marketing and business development director, and CIO or equivalent. In smaller firms some of these roles may be combined, but the functions themselves are vital to a successful business.
First Among Equals?
One of the key challenges for the managing partner is how to engage all the partners, who are after all owners of the business, while still being able to take (often unpopular) decisions and steer a course for the firm. Lawyers are by their nature intelligent people who are well capable of arguing their corner, and so gaining constructive input and taking the firm and its people in a certain direction – with or in spite of certain sections of the partnership – are important attributes of a successful managing partner.
Admittedly, certain aspects of the current environment can help in this regard. The financial pressures all firms face mean that managing partners can legitimately feel they have a strong mandate to insist on unpopular, but necessary, disciplines. As Mark Dembovsky, former CEO of Howard Kennedy, argues in the Lawyer article, ‘your partners need to understand the old practices and behaviours, such as waiting a year to be paid or taking on a job without due diligence, are no longer acceptable.’ This is a mantra we have always maintained with our clients and, with the good old days of stable and seemingly ever-increasing profits behind us, it is more relevant than ever.
Nevertheless, some more intransigent partners will continue to behave as they always have, and so the characteristics of a good managing partner – the ability to listen and take decisions, coupled with a thick skin, in many ways remain a similarly constant theme.
A Mixed Blessing
The role of the managing partner is not, and never has been, for the faint-hearted. However, those people with the skills and the support structures described above, as well as the vision and dedication required to articulate and follow a clear strategy, will continue to find it a rewarding position.
And at Wilkinson Read we would of course be delighted to assist in any way we can.