Chief executives should be business leaders
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17 July 2014
While the rest of corporate UK has embraced the role of chief executives and understands what the role can bring to corporate development, the more I hear the term spoken in legal circles the more I find it misunderstood or, at worst, abused.
Chief executives in legal firms rarely compare to their counterparts in the rest of business. In some cases they are senior lawyers who, having reached a point in their careers when a title of suitable gravitas should be bestowed upon them, become 'chief executives' because the roles of managing partner and senior partner are already taken. In other cases they are support managers who have been plucked from relative obscurity within the firm because they are good at marketing/finance/HR, but who in fact play second fiddle to the partnership body.
In such cases the role of chief executive is doomed to fail because the message is that firms are giving an individual a corporate badge, but not the authority and support to carry out the true definition of the role. It is tempting to keep the senior partner as a statesman figure in tandem with the chief executive, but what message does that create, both internally and externally?With the ramifications of Clementi looming on the horizon, firms have to seize the opportunities presented by the role of chief executive, not just for the development of their firms, but also for their structure and their ability to stay ahead of the game.
I do not think I have read an article anywhere in the legal sector that has described a chief executive as a business leader, but that is what we are and should be. A chief executive brings an understanding of business in its broadest sense, with clear direction and the creation of stronger strategies.
This is vital to a sector where most individuals within it are risk-adverse. Lawyers, on the whole, are reluctant to move into a business management leadership role and find it hard to balance being a lawyer first and foremost with the full-time commitment of running a business.
There are issues that firms should consider before rushing out and availing themselves of a chief executive. When Stephens & Scown first approached me to become the firm's chief executive, the partnership originally did not want someone who was going to be outward facing - it was looking for a role akin to a manager who could run the support team. But we changed that drastically by creating a structure that has a management board made up of selected partners, yet structured around me, while dissolving the roles of managing partner and senior partner. This leaves me free to pursue and implement strategy, while providing me with vital support from the partnership body.
As a non-shareholder in the firm I report back to the partners, but with Clementi I, and others like me, will have the opportunity to become shareholders, which in turn will give firms the ideal chance to enhance remuneration packages.
Firms have to be clear about what a chief executive is and how both the role and the real status of the role will be communicated internally and externally. They need to eradicate preconceived ideas and ignore the 'bad' experiences of other firms, which probably got the role and the communication of the role wrong from the start. Then they must let the chief executive build the strategy, with the input of partners and all levels of staff where appropriate.