Hiring external leadership is a savvy move for firms

The news of the appointment of Crawford Gillies, former European managing director of Bain & Company, as non-executive chairman of Hammonds has brought into sharp focus the growing practice of bringing ‘people from outside’ onto law firm boards and sparked a debate on the nature of law firm chairmanship.

The debate even encompasses the job title. Increasingly, the traditional senior partner role carries the title of chairman. ‘Chairman’ is suggestive of a corporate culture, whereas ‘senior partner’ seems locked in a nostalgic vision of a clubby world where a withering glance over half-moon spectacles is more than enough to sort out the most intractable people problem. One thing is certain – if you bring into your law firm a heavy-hitter from the outside world, he or she is sure as hell not going to want to be called a senior partner.

But it is not just a matter of the naming of parts, there are the issues of substance too.

Do the leaders of law firms have to have served as partners in the firms they lead? There may be some comfort for partners in the personal knowledge of their leader’s foibles, but there is an increasing feeling, borne out by Hammonds’ appointment, that putting an inmate in charge of the asylum is not necessarily the only or best option available.

Perhaps this trend is nourished by a growing suspicion that some law firm leaders may have a slight tendency to choose a strategic path for their firm that has as a major (even principal) objective the consolidation of their personal control over it.

Is it naïve to think that firms are not invariably led in the interests of the firm, and that occasionally the interests of the leaders themselves might intrude? What is happening at your firm? At every level of the legal market, is the sub-optimal tolerated, or even encouraged, by top management? Could it be that this happens because law firm leaders occasionally come to fear the internal dynamics that might be unleashed inside a really successful firm?An innoculation of outsider knowledge, such as that provided, for example, by John Rink (a former Allen & Overy managing partner) at Eversheds, might be enough to prevent infection by such a contagion. The presence of an outsider provides a vital reality check for the leaders of a firm. The statement “that’s how we do things round here” is not likely to be a clinching argument if the person who needs to be convinced is used to doing things differently elsewhere – and successfully, too.

And, of course, corporate governance orthodoxy tells us that no chief executive (managing partner) should make the transition to chairman (senior partner) in the same organisation. The apparent reason for this ‘rule’ is that no ex-chief executive who becomes chairman could be expected to resist the temptation to trail his or her fingers through the tresses of the old job.

Some managing partners who move to the chair, and who are determined to give their successor the room that they once enjoyed, have trouble identifying what job is left for them to do.

Whatever the reason, many law firms will consider that they cannot recruit from the previous conveyor belt that brought them senior partners in the form of managing partners who had reached the end of their term.

The presence of outsiders among the management in firms is here to stay and more power to Hammonds’ and the redoubtable Peter Crossley’s respective elbows for taking that step so decisively.