The third man
8 May 2000
22 April 2013
24 September 2013
15 April 2013
24 October 2013
4 March 2014
When Freshfields broke with tradition and made litigator Ian Terry managing partner, the cynics were quick to pounce. But, as Dominic Egan reports, the critics have been silenced and he is now leading a much happier firm.
Nobody talks much about Ian Terry. But it's his own damn fault. Impossible to dislike and refreshingly unassuming, Freshfields' managing partner has never been one to waste time on self-promotion. Indeed, before taking up his present role in 1996, he was little known outside the litigation department.
All that changed very quickly when Terry started working alongside senior partner Anthony Salz and chief executive Alan Peck. Terry's appointment caused something of a stir, being a major break with tradition. For as long as anyone could remember, Freshfields' senior management had been dominated by the wise old men of the firm's engine room, the corporate department. Terry, by contrast, was just 40 years of age and a litigator to boot.
Terry was as surprised as anyone. "It came out of the blue to me," he confesses. "In no sense was I looking for it. I'd never even thought about it. But Anthony invited me to do it and I thought that being at the heart of a small central management team responsible for setting the strategy for the future development of one of the world's leading international law firms would be a privilege."
Partnerships being what they are, one or two people thought they could smell a rat. "The cynics said at the time that the reason he [Salz] had got Ian on board was to broaden his base, to carry the litigation partners with him," says one Freshfields partner.
But the cynics totally misunderstood Salz's motives. Such was his standing within the firm, Salz would probably have won the election even if he had named his running mates as Mickey Mouse and Donald Duck. He chose Terry not because he needed him, but because he wanted him.
Salz was concerned that the previous senior management team - led by the dynamic but autocratic John Grieves - had damaged the unity of the partnership. Having witnessed Terry's diplomacy and sound judgement at first hand on Freshfields' partnership council, Salz believed that Terry was the man to heal the wounds.
"It was a refreshingly rigorous time under John Grieves," confides a Freshfields partner. "We'd never had management like that before. We owe Grievesie an enormous debt. We wouldn't be where we are today if we hadn't have had John. But he was a tough bugger!" Debates were not the order of day when Grieves was in charge, says another partner: "No disrespect, but you really felt that John had already made his mind up and, whatever you said, he knew which way he was going to go."
Terry, by contrast, is every inch a democrat. "The management may have authority, but that's built on respect, not power," he opines. "You have to carry the population with you. If they lose faith in you or they think you're not consulting them enough, then you're in difficulty."
The lines of communication between senior management and the partners have been reopened, reports Terry. "For important decisions, we consult as widely as possible with the partners to get their views… As you get bigger and bigger, it gets more and more time-consuming and there is a sense in which you never feel you've done as much as you should have done. But there is no culture within the management of just presenting things as faits accomplis or not talking to partners about what we're wanting to do, because you would just lose support. And rightly so."
That said, Terry does not want to spend all his time in meetings. (Indeed, he names a surfeit of meetings as his least favourite aspect of the job.) The problem is, achieving the right balance gets more difficult by the day. Freshfields now comprises 299 partners and 1,422 other fee earners based in 21 offices in 15 different countries. Terry admits that he does not get around the network as much as he would like. Nevertheless, he acknowledges with a wry smile: "I've enough frequent-flyer miles to fly to Mars, if only I had the time or the inclination."
With Salz still devoting at least 50 per cent of his time to fee-earning work and client relationships, the main burden of management falls squarely on the shoulders of the chief executive and managing partner. The two roles are for the most part interchangeable, says Terry. Both men work alongside the senior partner on strategy formulation and major projects tend to be taken on by whichever of the two happens to be available at the time. Peck, who at one stage left Freshfields for a spell as a director with Warburg Dillon Read, heads the finance committee and also leads on such issues as conflicts and new clients. As a former litigator, Terry usually handles matters involving a contentious element. He is also responsible for communications, both internal and external, and for the minefield that is new partner appointments.
The two men's characters, however, are easily distinguished. Peck, 51, projects an almost aristocratic air. He may well possess a PhD in charm, but is not afraid to make enemies. "He's not everybody's favourite cup of tea," declares one Freshfields partner. "Alan is quite clear and focused on what he thinks the important things are and is tough going about them." Terry, on the other hand, is down to earth, sensitive and universally liked. "I don't think he's ever made an enemy in his life!" chortles a fellow litigator. "He never loses his temper. He's very, very skilled diplomatically. Lots and lots of good judgement."
With their contrasting characters and skills, Peck and Terry are a potent force. Add a dose of Salz and you've got something quite special. Effortlessly charismatic but remarkably lacking in pomposity, Freshfields' 50-year-old senior partner inspires awe throughout the firm.
Now four years into the job, the current senior management team has not repeated the errors made by the previous regime. "You've got a sense of direction, a sense of a strong management team, but you don't have the anxieties that you sometimes had with John [Grieves]," states one partner. "They do it all with a tremendous lightness of touch… They manage without any obvious signs of managing. They don't boss people around, but somehow the things they want to have happen seem to happen."
Terry's hard work has been a key factor in turning things round. The Grieves regime "wasn't as obviously interested in you," declares a partner. "Ian gives the impression that he's got all the time that you need to discuss whatever concern you've got… He's a great listener rather than talker. Contrast Peck - he'll give you an opinion before you've even told him what the subject matter is!" Terry, he says, has also made the smaller departments feel that they now have a voice.
The managing partner's contribution is all the more worthy for having been made at some personal cost, suggests one of his partners. Terry, he points out, took up the role when he was entering the peak of his career: "The big sacrifice he has made is not being recognised as the triple-star litigator he is."
Just how much longer will Terry be willing to continue making that sacrifice? "I honestly don't know the answer to that," he responds. "At the moment, I'm really enjoying it." However, with a merger with Germany's Bruckhaus Westrick Hiller Lober still very much on the cards (see box) and noises continuously being made about a possible merger with a top Wall Street firm, Terry may well be tempted to stick around. Although he declines to go into any detail, he acknowledges that: "It's a really interesting time. I think the next couple of years are going to be very interesting as well, particularly on the American front, where we have some ambitions we'd like to fulfil. And I'd like to be part of that."
Finding a suitable replacement would be no easy task. For one thing, not everyone envies Terry his job. Playing third fiddle to Salz and Peck can at times be a pretty thankless task, acknowledges a partner. "He [Terry] is ideal in that he has no obviously large ego and is therefore quite happy to play whatever role is required of him in management. Anthony and Alan have large egos."
More to the point, Terry's successor would have a hard act to follow. Thanks to the senior management team's rejection of authoritarian government in favour of consensus politics, the Freshfields partnership is more united than it has been in a long time. Where once there were moans and groans from the partners about the firm's international programme and how much it was costing, now there is genuine enthusiasm. A little love and tenderness has clearly convinced the partnership that the firm's push for growth does not of necessity entail the demise of the firm's traditional culture. Who knows? Maybe it really does pay to be nice.
The Bruckhaus merger - on or off?
Having won the hearts and minds of the Freshfields partnership, Salz, Peck and Terry still face the even greater challenge of wooing the partnership at Bruckhaus Westrick Hiller Lober. As reported in The Lawyer on 24 April, merger talks between the firms stalled last month with Freshfields blaming poor communications within Bruckhaus for the German firm's failure to deliver a conclusive majority in favour of the merger.
However, Aled Griffiths, editor of Cologne-based magazine Juve, suggests that no one should read too much into the fact that talks stalled. He blames the hiccup on Freshfields' over-eagerness to get the deal done by 1 May for tax purposes and believes that the merger is no less or more likely to happen than before.
Griffiths holds that financial considerations are not the Bruckhaus partners' prime concern. He says: 'It is a really strong firm. If it stays independent, it'll be fine and if it merges with Freshfields, it'll be fine. Yes, it'll be doing slightly different work either way, but whatever happens, it is not going to collapse.'
What is really playing on the minds of Bruckhaus partners is what kind of firm a merger with Freshfields would produce.
One of Germany's very best firms, Bruckhaus is 'really wedded to its culture, really proud of its culture,' says Griffiths. 'It's not a firm that people leave. There's a really nice atmosphere within the firm.' However, Griffiths does offer some hope for Freshfields. 'Nearly all the lawyers that we've spoken to at Bruckhaus really like the Freshfields culture. They find it very collegial and friendly and mutually supportive.'