Category Archives: Leadership

Evaluating Managing Partners

This guest blog is by my friend Rob Lees, former global head of HR at Ernst & Young, later a director at their Global Leadership Center in Cambridge, Massachusetts, and more latterly a consultant to professional service firms. Rob is co-author (with Tom Delong and Jack Gabarro) of the ageless and invaluable book “When Professionals Have To Lead” (Harvard Business School Press, 2007). This piece was originally written for Managing Partner magazine. The words that follow are Rob’s own.rob-lees_height-165

 

Evaluating Managing Partners when you’re not sure what they’re supposed to do!!

 

When my colleagues and I were conducting our research into what truly effective managing partners do that differentiates them from their peers, we also asked the partners we spoke to how they evaluated their managing partners when there was often little or no clarity around what the managing partners were supposed to do.

Obviously, when there was a specific action or set of actions the managing partner was elected to deliver, that greatly aided the evaluation process, but nearly all of the partners we spoke to included the performance of the professional management group in their evaluation as they considered the managing partner was specifically responsible for the selection and performance of that group. Unfortunately, in too many instances, the perception of the performance of the professional management group had a negative impact on their view of the managing partner’s performance. The question is why? And, of course, what can managing partners do to ensure they avoid the negative impact?

Undoubtedly, the major issue facing the majority of managing partners in their dealings with the professional management group is their lack of knowledge about what ‘good’ is, although there is an understandable belief that, in the finance function, a fellow professional will know what to do.

Let’s use Human Resources as an example. If we asked most managing partners what the most important task is in Human resources, we would be likely to get a range of responses. But, in professional services, which is an execution game, there is only one answer and that’s to create a development process that enables the firm to develop its professionals faster and more effectively than its competitors – and, by doing so, to create both a competitive and economic advantage. It’s an answer that should be a ‘no brainer’, but sadly it usually isn’t.

Without an understanding of what ‘good’ is, when managing partners assess what their head of HR is doing they can get it badly wrong. And, if they do decide they want to change their head of HR, they usually sub-contract the selection process to a head hunter – assuming, often wrongly, they will know what good is. So, in the end, the selection process often ends up solely about fit (critical, of course, but only after capability) and without a robust discussion about how the individual will create a development process that will deliver what I call ‘speed to experience’ and give the firm three significant advantages over its competition. Not just the competitive and economic advantages I mentioned earlier as there is a clear third. The market for top talent is highly competitive whichever way you cut the market, and all of the research indicates that one of the critical factors in an individual’s choice of which firm to join is the quality of the development experience. The highly competitive people who live in professional firms like to constantly add to their knowledge and experience so they can continually improve and do more challenging work – and they like to do it as quickly as possible. So, if one firm has a reputation of having a discernibly better development process they will attract better people. As I said earlier, it really should be a ‘no brainer’!

So, managing partners must know what ‘good’ is. And, if they don’t know (and in my experience they always know whether they do or not, even if they can’t quantify it), they have to find out. One of the other things that differentiates great managing partners is an unwillingness to accept second best in any aspect of the firm’s operations. And, as the performance of professional management group influences the firm in multiple ways, including the partners’ opinion of their managing partner’s performance, knowing what ‘good’ is and making sure it is delivered is key for every firm – and every managing partner.

You can read more about Rob’s book, WPHTLand indeed buy a copy here

 

 

 

Winners and losers

W&LI’ve been enjoying my new life as a consultant in the legal sector for about 6 months now, and I thought now was a good time to pause and reflect on what I’ve seen out in the market. Fairly obviously, the economy is providing a far more benevolent backdrop to activity in the sector than was the case throughout the recession. There is more transactional work about, and many firms are processing as much residential conveyancing work as capacity will allow.

Firms are talking about improving processes, employing smarter pricing and going for growth. But I don’t see enough law firms thinking radically about what the market needs and how they are best going to satisfy that need. I’m not the first commentator to opine that the small to medium sized full service firm has had its day – though current increases in turnover and profitability for such firms rather obscure that message. It reminds me of David Maister’s observation that it’s quite difficult to walk in to a room full of million-dollar a year attorneys and tell them they’re doing it wrong!

All firms need a razor sharp focus on which clients, in which markets, they are aiming to serve. Once clear on that, the firm should then aim to achieve competitive advantage in that market or markets. That means, for the avoidance of doubt, being able to provide its services at a higher price than its competitors, or being able to produce its services at a lower cost. Few can achieve the position of premium priced market leader over a range of services – though see for example the Magic Circle firms – but it is possible to dominate a smaller market providing a smaller range of services or to produce comparable services at a lower cost than others. An example of the former could be a niche media law firm operating out of Manchester’s Media City, while an example of the latter could be a volume conveyancing firm that has invested heavily in its IT infrastructure and processes to enable it to operate profitably charging prices that would seem unfeasible on the high street.

Winners and losers are emerging. The winners are not always the firms that are now trumpeting their rude financial health, and the losers are not always the firms that aren’t currently enjoying newsworthy growth. The winners are those firms that ‘get it’. The winners are those that know which clients, in which markets, they need to focus on, and do so. Firms that genuinely understand their clients and their markets. Firms that invest in the optimisation of their processes. Firms that understand profitability on a granular level and price accordingly. Firms, in short, that understand they are in business in the 21st century, and understand what it is they need to do to compete as effectively as they possibly can.

I’ve enjoyed working with firms who perhaps didn’t ‘get it’, but hopefully now do. There’s no doubt that some firms, by reason of service lines or geography, had an easier recession than others. Some of those, not perhaps having had the ‘burning platform’ to prompt change which so many experienced, may be starting behind the pack. But if a firm is prepared to look afresh at why it is in business, possibly by means of a facilitated strategy review, and to re-examine its target clients and markets, it could yet become one of the winners.