The new management team at Mayer Brown Rowe & Maw (MBRM), which was officially crowned last week, has already vowed to push forward the revolution in the firm’s partnership culture.
Chairman Jim Holzhauer and vice-chairmen Paul Maher and Ken Geller are putting two things at the top of the firm’s strategic agenda: doubling turnover in New York and hiking worldwide profitability.
“We’re pretty focused on growing New York and have quite big ambitions for our presence there,” says Maher. “There are 200-plus lawyers there now – it’s a pretty big footprint, but in that context we’ve got to get closer to the heartland of New York.
“We’re looking for aggressive growth targets – doubling the size and revenue of the office. New York has its stand-alone practice as well, but we obviously want more. We’re very keen on it being a bit of a showcase for the rest of the firm.”
MBRM has posted record results for the 2006 financial year. Turnover broke through the billion-dollar barrier for the first time, rising by 11 per cent to $1.1bn (£597.83m), while average profit per equity partner (PEP) surpassed $1m (£543,500).
Although the results are in an upward direction, there has been lingering internal dissatisfaction that the firm did not punch at its weight.
“Our PEP as a measure of our stock price we’re not totally happy with,” says Maher. “We want to get in the upper-quartile of global PEP – it’s entirely achievable. We see ourselves as an undervalued stock.”
This was part of the reason behind the trio’s bold decision to axe 45 from the equity partnership, as revealed by The Lawyer (5 March). It was a cull with little precedent in the US market, and most of the departures will come from litigation, one of the firm’s biggest practice areas. Even more significantly, the axe fell most heavily in MBRM’s home city of Chicago – a sure sign that the trio was determined not to be cowed by the firm’s heritage.
Key to the restructuring is more effective integration, particularly of client relationships. “We need to organise ourselves internally to operate better as a team,” acknowledges vice-chairman Geller.
To this end, former managing partner Debora de Hoyos has taken the role of head of client development. “It’s a much more team-based approach; it’s about finding the right team for each client,” explains Holzhauer. “Her focus is an initiation of the process. It will involve some re-allocation. We’re pushing people to become much more managed in the way they allocate work. Debora is going to be focusing on the teams we put together.”
De Hoyos argues that MBRM needs to institutionalise its client base more effectively. “Large corporate and financial clients increasingly expect to deal with their law firms on an institutional basis in addition to having strong, deep relationships with individual lawyers,” she says.
Integration will inevitably include a bigger focus on moving lawyers around the network of offices – another cultural shift. Until now MBRM lawyers have tended to stay in one office over the course of their careers at the firm.
“A prime plus on any lawyer’s resume is whether they’ve experienced more than one office,” says Holzhauer. Given MBRM’s stated intentions for New York, it is safe to assume that the firm will be transferring staff there as soon as it is able.
While the management trio is spending its first 100 days travelling around the offices and speaking to as many partners as possible, the team has de facto been in charge for the last year. This was evident in the massive overhaul of its partner compensation system to reflect collective firm effort rather than individual billings, as revealed by The Lawyer (9 October 2006).
“In 2006 we had 110 different levels of compensation,” says Holzhauer. “We’ve now moved it to the point where we have 14 levels and, by and large, the change in compensation will depend on the profitability of the firm.”