Schillings: from defamation defender to reputation bodyguard

From its launch in 1984, Schillings had been a traditional libel-litigation firm best known for defending celebrities such as Naomi Campbell and Kate Winslet. This case study examines how Schillings evolved its business model from that of a pure law firm to that of a multi-disciplinary consultancy, and changed its culture in the process.

Schillings had a busy year in 2010. Along with other London defamation boutiques, the firm was particularly involved with a wave of injunctions and super-injunctions against a number of newspapers, particularly the Sunday tabloids. However, as partner and chief operating officer Christopher Mills recalls, “The world was changing – Twitter and Facebook and all things digital were exploding and you could definitely see a step change coming on issues of privacy. Reform was on its way and the old rules of suing papers on a Friday night would not apply any more.”

While libel reform and, later, the Leveson Inquiry, was good news for Schillings’ traditional client base of celebrities and high net-worth individuals, the firm decided to make a definitive decision on its strategic direction. “We had three choices,” says Mills. “We could stay the same, but we didn’t see the future in that. We could diversify into other legal services, which was an already crowded area. Or we could stick to our core purpose and diversify into non-legal services.”

The partners opted for the last of these. “We wanted to be able to win clients and then have a long-term relationship with them,” he says. “But that wasn’t possible with our model of a boutique defamation firm, because we were a crisis buy, so we had to turn that around.”  The vision was to create an offering that was preventative, rather than reactive.

The 2004 Clementi review and the Legal Services Act of 2007 had liberalised the climate of discussion around partnership structures. Schillings was not yet able to realise its dream of a multidisciplinary consultancy, but it began to take its first steps towards building a new business.

Timeline of Schillings’ move to reputation-defence ABS

(click image to enlarge)

First to change: the firm’s culture

First of all, it attended to its decision-making culture. As a firm with just six partners, Schillings did not have deep resources to throw at the transformation process; it therefore focused on its communication. It enacted a series of four formal offsite meetings a year for its senior people, focused solely on strategic planning and big-picture rather than operational issues. With the prospect of bringing in other businesses, it was also important to build a firmly collaborative model, says Mills.

At the same time, the leadership had to reassure staff that the forthcoming changes would benefit them. Anxieties shared at the time were around whether the firm would continue to invest in its legal side, and what the diversification strategy might mean for the partnership track. “One of the hardest things to tackle was internal perception,” says Mills. “We had to help them understand what we were doing and what it meant for their careers. We hadn’t appreciated the level of communication needed around that.”

Next, an alternative business structure (ABS)

Schillings was already working closely with information-security firm Vigilante Bespoke (VB), a cyber boutique comprising four individuals, and had used VB to check its own digital footprint and security. “We were so impressed with what they found out about us, we decided to buy them,” says Mills.

In 2011, Schillings acquired VB – the first step in its strategy to broaden its privacy offering. At the time, the alternative business structures (ABS) regime, which allows law firms to set up legal businesses with non-lawyer managers, was not quite in play, so it had to be careful not to breach client confidentiality regulations.

The following year, once the SRA began licensing ABSs, Schillings applied and was granted a licence. “That gave us the freedom to get on with it,” says Mills. However, the ABS application process, as other applicants had already discovered, was not the most straightforward. “The application form was massive and didn’t really seem tailored to us. There wasn’t a lot of guidance at the time, but it’s improved a lot since.”

Schillings had to devote serious leadership time to make sure that it was abiding by the code of conduct. However, Mills insists, it was worth it. “Our cyber and intelligence teams observe the same professional standards as a law firm, and clients like that.”

The integration could then begin in earnest. It was completed in 2013. At that point, Schillings branched out further, into the risk and intelligence sector, recruiting David Imison from KPMG as part of its strategy to target preventative work for clients.

New partner appraisal system

But there were more than simply regulatory and structural issues to contend with in combining the two businesses. In tandem with the continued diversification, Schillings had been honing its talent and culture strategies and revamping its partner appraisal processes. Since that time, all candidates for partnership, whether lawyers or not, have to work on a project that is aligned with its strategy and values of collaboration.

In order for the firm to assess internal collaboration and consensus-building skills as well as business-planning nous, every individual must research and present a project that can be feasibly accomplished. While this approach is familiar to many firms, for Schillings, there have been immediate outcomes: the decision to open in New York this year was based on just such a project, as was a root-and-branch review of Schillings’ people strategy, from internal talent management to recruitment.

In 2012, the first to be promoted via the fledgling partnership assessment programme were Jenny Afia  and Chris Scott, who was involved with the firm’s submission to the Leveson Inquiry. They were later joined by Christopher Mills – the first non-legal partner – and Davina Katz as head of the family department. External non-legal hires such as chief financial officer Andrew Meyrick also went through a light version of the programme.

In 2017, as a result of ideas that emerged from the partnership programme, Schillings decided to abolish annual appraisals. “Formally rating people can have a negative impact,” says Mills. “Appraisals weren’t well liked and were really time-consuming. The likes of Adobe, Motorola and Microsoft prove that you can improve performance by getting rid of the rating system.”

One of the hardest things to tackle was internal perception. We had to help our staff understand what we were doing and what it meant for their careers”  – Christopher Mills

Career conversations now occur on a self-directed level. “The onus is on the individuals to make it happen,” Mills adds. They have three or four conversations a year with their line manager to discuss short-term objectives and long-term plans.”

Developing the risk/advisory division

Following the integration of VB, Schillings then focused on growing the third arm of its business: the risk/advisory side. Earlier this year, it took on three more senior hires as partners: Amy Pope, formerly US deputy homeland security adviser and deputy assistant to President Obama; Jeremy Eakin, founding member and formerly managing director of UBS AG’s global family office team; and John Chase, an intelligence expert who has led teams at Kroll, Aegis and GardaWorld. Now 40 per cent of client-facing staff work in cyber, intelligence and advisory.

With three types of business under the same roof, collaboration is key, and this is now reflected in Schillings’ key performance indicators (KPIs). “Everything we do is about breaking down the silos,” says Mills. “We used to have team-based KPIs, but that just reinforced fiefdoms. So we focused people on clients and firm growth instead, and scrapped anything that resembled an eat-what-you-kill approach to partner remuneration. We have a guiding principle: ‘Lose the ego, use the team.’ ”

Full-service benefits

Bringing in a range of professional skill sets has made a difference to the way the service is delivered to clients. For example, a high-profile couple was getting married and wanted to have complete privacy for the wedding day. Schillings scoped out the venue with the clients’ security detail and put in place confidentiality agreements with the venue and suppliers. The cyber team made sure the guest-information website was secured to maintain secrecy. Two days before the wedding, the legal team issued legal complaints to publications who had sent reporters, while the intelligence team monitored social media throughout to ensure over-enthusiastic guests removed any photographs they posted online before the media had the chance to publish them.

In another example, the firm advised the owner of an investment firm on strategies to use to defend himself from a malicious online campaign. The intelligence team analysed the posts to find correlations between them, while the cyber-security team uncovered the technology trail to find the perpetrator.

The legal team, meanwhile, prepared multi-jurisdictional actions across Europe, Central and North America. Schillings also helped the client to put in new processes to protect against further attack. “If you get a lawyer on a problem, you’ll get a legal solution, so it’s important to get non-lawyers in too,” says Mills.

In 2008, Schillings had six partners and some 35 staff. In 2017, it has 16 partners, of whom nine are lawyers, and around 100 staff. The transformation was worth the effort, says Mills: the objective to become preventative advisers was successful and the firm has doubled its headcount in the past 18 months: “We have a really good, diverse partnership and it’s all about collaboration.”