Management skills can build a partnership
9 October 2006
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Law firms often face the question of whether partners should be appointed as group heads in order to drive performance. There are three approaches to this age-old issue.
The first is to, in effect, say 'leadership is not for us'. In some partnerships, preserving equality of status among partners goes hand in hand with equal profit sharing, but in most it defines an eat-what-you kill mentality, with partners left to manage their own clients.
The second approach is to use promotion to group leader as a reward. The prize usually goes to the biggest biller. The presumption is that their selling skills will rub off on others.
Both of these approaches have their problems. The first is not as daft as it might initially appear. Many partnerships are founded by a small group of partners determined to avoid the culture of the larger firm from which they have often splintered: that is, a culture ruled by a strong senior partner, sitting on the majority of the equity and controlling many, if not all, client relationships. Partnerships of equals can work, but not for long, as they are restricted to staying small and therefore struggle to provide futures for ambitious juniors.
The second approach is more common, but also more problematic. It is common because it is difficult to resist pressure from the big biller who wants to give himself a big billing. It is problematic, because there is no reason why the big biller should have any of the talents required to run a business. In the worst cases the big biller will weaken his group and his own billings will suffer as his time and attention are diverted elsewhere.
The third approach is to look for individuals within the partnership who have the skills and interest to manage. Good group leaders will take seriously performance management and the group's role in shaping and implementing the strategy of the firm as a whole. Above all, good group leaders will be good with people, able to balance leadership with management and deploy inspiration and measurement as the circumstance or individual demands.
Some firms assume that these skills and interests will not be found in their partners, which is unsurprising given how little attention is paid to business management in professional training and education. It is understandable, therefore, why such firms look to professional managers to run their practices. Such an approach, however, can suggest to the partners that they have the right to exempt themselves from the business of management, or that they are above it. But this type of culture makes practice management almost impossible, with management and partners pulling in different directions.
Other firms look for the skills of management in the partnership itself. And if firms find these skills, they must nurture them.
Nurturing involves ensuring that the skills of management are separately defined from rights of ownership or access to key client relationships. It means ensuring that people with management aspirations are encouraged, incentivised and rewarded for the successful deployment of their skills. It means ensuring that management skills and education programmes are developed and delivered to client-facing staff and partners.
Above all, it means ensuring that management and leadership are qualities and capabilities that are spread around the partnership, rather than focused on the single figure of a founding senior partner.
Firms that ensure these things are better able to build an infrastructure to sustain growth. When firm management is devolved to group management, an ambitious firm will begin building a honeycomb of structures that will also allow the partnership ethos to flourish in far bigger partnerships than would otherwise be the case.
Such a firm will also find itself with ready-made succession management programmes and a far healthier future than firms that choose to duck the management issue, or allow themselves to be subjected to the will of one.