Baker & McKenzie's new grandmaster
10 November 1999
French national Christine Lagarde has just become Baker & McKenzie's first Madame Chairman. Anne Mizzi talks to the woman who has taken on the task of making all the right moves for the world's largest law firm.
'I am calling myself chairman," announces Christine Lagarde, one of the youngest people to sit in the chair of the world's biggest law firm.
Lagarde has decided to call herself "Madame Chairman" rather then chairperson or chairwoman. She explains: "I have had very broad consultation from California to Oxford and Cambridge. The outcome is that Madame Chairman is probably the best."
One wonders what founder Russell Baker would have made of it all, when 50 years ago he teamed up with John McKenzie. The pair opened the firm's first foreign office in 1955 in Caracas, Venezuela.
Lagarde says that Russell Baker's dream has become reality: "He was a visionary and there are not so many of those around. He thought that the firm should be international, without boundaries and should be a family of international lawyers with no nationality."
At 43, Lagarde is the first woman to run the firm and its first European-based partner to serve as chairman since the role became full-time in 1984.
Lagarde comes across as open and chatty, even quick-witted and charming. As a young woman, she's breaking the mould for global chief executives.
Without doubt she is a Bakers & McKenzie woman. She joined the firm's Paris office in 1981 as a trainee and was a partner in the same office for 12 years, practising competition and employment law. Four of those years were spent as co-managing partner of the office.
Lagarde served as chairman of the European regional council and on the executive committee as the committee liaison for 11 Western European offices.
She also chaired the professional development committee which oversees all Baker & McKenzie's educational programmes as well as being responsible for setting up the World Trade Organisation (WTO) global practice group in Zurich, Brussels and Washington three years ago.
The chairman's term runs for three years and re-election is a possibility. As chairman, Lagarde is in charge of the international management and, together with the rest of the executive committee, is responsible for the daily management of the firm.
The first chief executive was Russell Baker himself and the most recent chairmen have come from the US, but the post has also been held by a German and more recently an Australian. Now it is France's turn.
French national Lagarde explains why she has been chosen, without, as she puts it, "doing the hairy chested stuff".
Baker & McKenzie operates in four regions: Europe, Asia-Pacific, North America and Latin America. "Of the four regions," Lagarde explains, "Europe is the largest in terms of revenue and is also the largest in terms of the number of lawyers. While the US economy is certainly thriving and is one of the strongest, in terms of breadth, spread and growth, Europe is doing pretty well too."
She says that language, racial origin and gender are not an issue for the multi-cultural firm and the appointment seems to make sense - reflecting the "global village" image being promoted.
"We are a completely global organisation trying to use our best resources wherever they come from whatever their skin colour or gender is."
As Baker & McKenzie has become global, shrugging off the US law firm label, it has tried to maintain a decentralised structure. Lagarde admits that although there is no European headquarters, London plays a key role because of the heavy concentration of City-based lawyers responsible for driving the European practice group.
She adds: "The London office hosts probably 70 per cent of the European practice group initiative leaders so can you say as a result it is the centre? I'm not sure.
"They could be seated anywhere as long as they have strong competence in their respective field of law and know how to operate on a European basis - that constitutes a regional 'global' initiative."
In the 1990s, the firm's London office underwent a sea-change, relying less on US work in order to focus on becoming a fully-fledged City practice.
The firm's website starts with an animated opening page emphasising the global nature of the firm. The strapline reads: "Global. Local. One world. One firm. Connected." While the global image is one the firm has cultivated - winning The Lawyer Award for Best Global Law Firm 1999 is a major part of its marketing drive - it has also attracted less welcome labels.
Baker & McKenzie has been nicknamed the McDonald's of law firms. Some call it McFirm or Baker Mac while others prefer Chicken McLaw. Lawyers joke that like McDonald's, Baker & McKenzie has a franchise in every country.
When asked about the analogy, the very personable Lagarde suddenly becomes serious, attacking it as "grossly unfair".
She says: "It's an expression of some sort of contempt and jealousy in a way. First of all McDonald's has been around for a long time and is not doing so badly, but I certainly would not claim that we are a McFirm at all, except that we really are very much focusing on global quality and raising standards across the world despite cultural differences. So if that was the analogy, fine. But to compare us with a three-star restaurant would not be fair."
Lagarde sees the global/local focus of the firm as a key element in her management role. The firm is structured with layers of management at local, regional and global levels. She says: "Initially it was with a view to making sure that people felt really concerned with the operation, that they were spending their money and to make sure that they were focused on profitability.
"You should not regard us as a highly centralised organisation, because it is just not us. We are trying to instill management concerns, management competence and capabilities at global practice group level and at regional levels, making sure at the same time that these management capabilities are coordinated so that everybody moves in the same direction."
There is also management at office level, "because that's where people practice, live, upset each other and take pride in what they do", she adds.
She says global management does three things - guides and monitors; represents the firm; and consults with the regions and the strategic initiative leaders.
And it is the firm's global ambitions that City rivals are looking at.
Although she hints at future expansion, she says the firm has entered a consolidation phase. She says: "My personal view is that we have probably reached the stage where we are covering pretty much what we need to cover but the future will tell. I think we are more likely to look at consolidating some of the operations, to be more efficient, to operate in a much more cost-effective fashion.
"And if we expand, which I'm sure we will, it's likely to be in terms of a consolidated basis in strategic areas that we have identified and possibly in new areas that will emerge. I very much believe that new areas of law will emerge and will become important and that we will be able to grab those opportunities as they arrive."
Plans to open an Indian office have come up against a brick wall. "We are looking very closely at India. As you know India is highly regulated and I think the British Empire may have something to do with it," Lagarde laughs.
Lagarde says that the WTO and increasing liberalisation should lead to relaxation in the Indian exchange control rules at bar and financial levels. "We are on alert," she says - "In other words, ready to jump."
In the 67-partner London office recent years have seen lawyers come and go. Lagarde says: "I think the British market is very volatile. We have seen some turnover, but really not much and if we have experienced it a little bit in London, especially in the last two years, it is certainly a sign that volatility of the lawyers market is a new factor. The entry of new competitors explains that to a degree."
She is not fazed by the challenge posed by accountants. "It's not something new to me because in France accounting firms have been practising law for the last five years. We see them entering the market and we see them putting in huge resources derived from other branches of their operations."
However, Baker & McKenzie's position as the world's biggest law firm is now under threat from newly created giants such as the Clifford Chance/Rogers & Wells/Punder Volhard Weber & Axster superfirm.
Unsurprisingly, she is unwilling to share any secrets with the global newcomers. But she does have some advice for them: "The cultural issues which can only be resolved over time should not be underestimated. You don't practice law in London as you practice law in Zurich, Tokyo, or Hong Kong, let alone in Baku or Buenos Aires."
Lagarde believes that Baker & McKenzie's history and experience of global operations will stand the firm in good stead.
She says: "It was a bit lonely being out there, being global. Seeing newcomers joining us in the field is quite interesting and encouraging so we will certainly enjoy ourselves in the next few months.
"I think it's excellent that some people have decided that the vision we had 50 years ago was the right one."