As the managing partner of a 26-office law firm, David Harris is used to business travel. But he’d never been on a flight quite like this one, a morning flight from Heathrow to Boston. “The hostesses wondered what was going on. No-one was speaking much or spending time watching the films. Everyone had their head down, buried in paperwork.”
Why the concentration? The plane was packed with City professionals, all heading for Harvard Business School and its course, “Leading Professional Services Firms.” Since its inception in the 1990s, the week-long, $10,000 course has become an essential rite of pas- sage for City lawyers with positions in, or aspirations to, management. Along with Lovells’ managing partner Harris, the course has welcomed such hall-of-fame personalities as DLA Piper’s Nigel Knowles, Davids Gold and Cheyne, and Tony Angel. Leading firms from as far afield as India and Australia have also sent their senior members.
The course is open to the broad range of professional services organisations, from investment banks to PR agencies. But lawyers in particular have flooded to the course, now accounting for around a third of each 160-strong cohort. So well has the course caught the attention of the profession that last year Harvard Law School hired one of its teachers, Ashish Nanda, to start a dedicated equivalent, “Leadership in Law Firms.” Eversheds, Freshfields, Dechert and Hogan & Hartson have all sent senior management figures to that course in its first year.
Why do the Harvard courses stand out from the array of general management courses available? Professor Jay Lorsch, who runs the Business School course, says that there are two unique aspects of professional services firms that require a dedicated treatment. First, says Lorsch, “almost all professional services firms have a leadership model that you don’t see elsewhere: the producer-manager. When people get promoted, they usually expect to continue their professional work.”
The problem is that “the skills required for leadership are very different from those required for success as a professional.” A successful lawyer is risk-averse and prone to laying out every possible option to clients, while law promotes a logic-based, black-and-white manner of thinking. A successful leader requires the exact opposite mindset, capable of making quick decisions and happy to adjust course in light of new evidence. And while most large public companies have a significant pool of MBA graduates from which to appoint managers, the vast majority of lawyers have been trained in nothing but law.
Second, professional services firms are unusually dependent on the skills of their star members. Law is essentially a people business: the asset firms trade on is the brainpower – and selling power – of its star partners. A successful firm, argues Lorsch, will “align” its culture, and remuneration and hiring policies, with its strategy. With the market now highly competitive, firms that aggravate stars can lose them – and the competitive advantage they bring – to rivals. But firms that coddle their stars can infuriate and demoralise younger and more mainstream members – the “B-players” who, Lorsch points out, do the bulk of any organisation’s work.
This concept of “alignment” underpins the course, and Lorsch has expanded it into a book, Aligning the Stars: How to Succeed When Professionals Drive Results. Cyril Shroff, senior partner of India’s Amarchand & Mangaldas & Suresh A Shroff & Co, who attended the Law School course this year, says this principle was the key lesson he learnt. “The most important message I took away from it was: you have to be very consistent with the model you’re selecting.
“Most law firms are a mishmash of different models – operating in both the top and middle of the market, for example. But the right remuneration system and culture are very different for each model. For one organisation to have this variety of people causes a lot of internal tension. You should have complete clarity on what you want your organisation to be.”
The managing and senior partners, and select department heads, who attend the courses might feel relief at the thought of a nice break from their regular duties. Such feelings, say attendees, would be premature. The gruelling schedule begins before arrival, with students given a thick pack of pre-reading – mostly consisting of case studies – to slog through before they arrive, with more to come throughout the week.
“They work you very hard,” admits Herbert Smith’s David Willis, who attended the Law School course as part of his transition to his new role as the firm’s first managing partner for over ten years. “You have to be ready to talk about the case studies before class – they’ll know if you haven’t done your prep. There are classes from 9am to 6pm, and then you discuss things more over dinner. Then you’ve got a pile more reading to do in the evening.” Demands from the office, says David Harris, must come second. “It’s a pretty crammed timetable. You get out of it what you put in. You can’t be on your BlackBerry for much of the day.”
The courses use the well-established “Harvard method” of relying on case studies to provoke debate. “The professors are very impressive people, but they don’t do all the thinking for you,” says Harris. “Their technique is to engage people and provoke discussion. So with a given case study, they’ll encourage people to think about what they’d do in the situation.”
This teaching style keeps wayward students from drifting off. Shrinking violets, it seems, aren’t welcome. “The sessions are very interactive with extensive discussions around the case studies. They are good at ensuring everyone's involved – you can't just sit there and not participate,” says David Harris.
To an outsider, it might seem the professors are little more than facilitators of debate. But, says Harris, they exercise a hidden control over proceedings. “You’re learning from other participants’ views, with the professors injecting their expertise quite subtly into the discussion, and steering it to make sure we get to the points they want us to think about.” As David Willis notes, “you need charisma to pull it off, but they have that.”
Having such a wide range of professions represented offers surprising opportunities for discussion. One City partner, who attended the course in 2003, recalls: “We were discussing the growth of Andersen Consulting and its separation to become Accenture, as an example of shared objectives and strategic alignment. There were people there from Accenture, and former partners at Andersen, and they had quite a frank, interesting discussion about what went wrong. People do open up.”
If the presence of a wide range of professions is part of the appeal of the Business School, why set up a law-only alternative? According to Ashish Nanda, it was law firms who said that law required a dedicated treatment. “Law is much more of a traditional profession than other professional services,” says the soft-spoken Indian. “It has a long history as a profession, with established concepts of professional ethics and client service, which lawyers have thought and worried about for many, many years. Some of the other professional services firms are often more corporate than law firms – larger, with more centralised power, and quite often structured as public companies.”
At the same time, though, law faces a degree of transformation unlike that facing other professional services industries. “The legal profession has been going through a dramatic transformation in recent years. Clients are becoming more systematic and aggressive in their demands; law firms have been growing in size and scope, crossing jurisdictions at a spectacular rate. They are experiencing the strains of growth and transformation unlike other professional services industries. In accounting, consulting, even finance, the pace of change is slower.”
Both courses use case studies from the full range of professional services industries, and beyond. There are only a handful of case studies on law firms: one looks at New York powerhouse Wachtell, Lipton, Rosen & Katz, as an example of a firm with a structure tightly aligned to its strategy and place in the market. Others look at Linklaters and, new this year, Uría Menéndez, and their responses to changing market circum- stances. But other studies look at investment banks and even a soap company.
Theory over practice?
At $10,000, the courses are not a minor investment. More importantly, it’s a week away from clients and management duties. So is it worth it? The courses’ popularity suggests the answer is yes. The Business School is adding a third week this year, taking the annual attendees up to 500. “We could probably run a course every week if we wanted to,” brags Lorsch. And the Law School’s course has been fully booked in advance since its inception; a new course for inhouse counsel is scheduled for this year.
Attendees say that much of the appeal lies in the quality of the teaching. “The tutors have a lot of experience of professional services firms, and how they differ from other organisations,” says David Harris. “And they’ve developed a strong understanding of law firms in particular” – unsurprisingly, given that so many have attended over the years. In addition, with their high-level intake, the courses offer the chance to learn from your top-ranking peers. “Having people there of a really high calibre was extremely interesting,” recalls another attendee.
Nevertheless, the theoretical nature of the course leaves some feeling dissatisfied. “I had great fun for a week indulging in philosophising and theorising about business management,” says one. “But I’m not sure if it was terribly useful in my daily working life.” The course’s non-didactic style, with the emphasis on discussion, makes it stimulating, but abstract from the day-to-day business of law management. “It helps you understand different ways of looking situations and dealing with them. But if there was less theory and more practice, it might be more helpful.”
Lorsch points out that the course is intended, not as training in management technique, but to encourage firms to think about key strategic questions in a useful way. “People come to us, and they can talk about the practical difficulties and tensions they face and how they deal with them,” he says. “But we give them a conceptual way to think about it.”
Take, for example, the hoary debate of lockstep versus eat-what-you-kill. “We’d say that that’s the wrong question. You should be asking: what kind of behaviour do I want to encourage? And what system would best reflect that?” Hugh Verrier, chairman of White & Case, attended the Law School course this year. “It’s not a how-to,” he says. “It’s not meant to give you the nuts and bolts of managing a law firm. It’s about the design of a firm and how it matches the strategy. It gives you an opportunity to think about the major issues law firm leaders face and how they relate to your firm.”
“There wasn’t much in there that was completely eye-opening,” admits one attendee. “If you could take yourself away from the office and your family, and you were very disciplined, you could probably achieve the same effect just by reading David Maister and thinking very hard.” But, says Ashish Nanda, the classroom environment is essential to really absorb the ideas in the courses.
“Management, like law, is a craft. A lawyer could learn every precedent, but that wouldn’t necessarily make them a good lawyer. You have to learn it through practice.” The case study method, says Nanda, allows attendees to explore potential situations before they appear in their own firm. “It’s said a wise man learns from his mistakes, a wiser man learns from others’. The case study method is about learning from other leaders’ experiences.”
Most attendees do say the course affected the way they went about their jobs. For David Willis, who attended the course in May, “it’s helped me in setting priorities. It gives me a framework I can use when making decisions day to day. Have I made different decisions as a result? I don’t know, but I have a much clearer idea of the things I should be looking out for. When I’m sitting in a management meeting, listening to different people bringing us information, I think I’m more likely to spot where there’s a blockage in the strategy.”
Sometimes, the course is less a transformation than a confirmation of what leaders are already doing. Says David Harris, “One of the main areas of focus of the course – of achieving alignment around a clear strategy – chimed exactly with what we were already doing, which was very helpful and very reassuring.” David Willis says the course has made him “more likely to address potential problems; less likely to just hope they’ll sort themselves out.”
The course has not enraptured the whole of the legal market’s elite, however. Traditionally minded firms such as Slaughter and May and New York’s Davis Polk, Simpson Thacher and Sullivan & Cromwell have shunned the course. Wachtell – despite their star role as a case study – have so far declined to send any partners themselves. Ashish Nanda is not entirely surprised. “We’re looking at issues of management, and these are felt most acutely by leaders of firms that are becoming larger and more complex. Smaller, more focused firms have their own issues, but their leaders sometimes don’t feel the management challenge as acutely.”
Even die-hards, though, Nanda believes, may be won over. “I believe it’s becoming obvious to law firms big and small, that one of the key drivers of superior performance is how good you are in leadership and management.”
Bespoke courses broaden the opportunity
Still, it’s clear such courses are only suited to a handful of partners from any firm. What about firms seeking a more widespread, basic introduction to management for larger numbers of partners? Harvard itself doesn’t offer anything suitable, but operating independently, Nanda, Lorsch and their colleagues have set up bespoke courses with a wide range of firms aimed at a broader range of partners. Linklaters, DLA Piper and Orrick, Herrington & Sutcliffe are just a few of those who, having sent senior management figures to the Business School course, now use this approach to spread the ideas further down the partnership.
Other providers, too, have entered partnerships with law firms. Reed Smith turned to the University of Pennsylvania’s Wharton School for assistance with its leadership courses for partners.
In part, bespoke courses are cheaper and more practical. “Our chairman, Ralph Baxter, found the Harvard course extremely valuable,” says Laura Saklad, partner development officer at Orrick. “But the reality is getting a critical mass of partners through the programme, to have the concepts become part of the language of the firm, means a prohibitive investment of time and money.”
Some firms also see an advantage in focusing on their specific issues. “It’s a trade-off,” admits Saklad. “There clearly would have been benefits from being in a group with people from other industries. But we thought it would be great to get all our leaders together in a thinktank environment, focusing on Orrick issues.”
For firm management, such courses provide a way to make partners understand their priorities. “It helps to raise awareness of the considerations those in leadership have to make when taking decisions,” explains Saklad. Indeed, Tony Angel employed Harvard’s professors to help partners understand the logic of his sweeping reforms at Linklaters.
But to be truly useful, such courses have to be more than a glorified version of the senior partner’s conference presentation. “Once we’ve laid out the concepts, we try to show how they apply to their practices at a micro level,” says Saklad. “For example, one of the big questions is how to reward high achievers. That’s a question that applies at practice and office level as well as firm-wide.”
As with the formal Harvard courses, however, it’s not easy to quantify the contribution bespoke leadership courses make to firms. John Smith, the chancellor of Reed Smith University, the firm’s training programme, calls this one of his main challenges. “Measurement is critical, but it’s fundamentally difficult to do right,” he admits.
“Can I point to increased profitability or client satisfaction as a direct result of the course? No. Would I like to be able to? Absolutely! We do invite evaluations from participants, and track how well they’re performing with their managers, but it’s hard to identify a clear cause and effect.”
But attendees Client Report spoke to said that they could point to small, but significant changes to their management style as a result of the courses. “One thing I learned was to always have short, medium and long-term objectives – no more than three of each,” says Lorraine McGowen, who attended Orrick’s course last year. “To push yourself to meet those few, instead of having a long to-do list you never clear. I use it in my own work, and in setting the priorities for my practice group.”
Sarah Wolff, head of securities litigation at Reed Smith, attended the Reed Smith University/Wharton course last year. “One very specific thing I learned was to delegate more,” she explains. “It was a eureka moment – to realise that I tend to keep control of things for too long. Now I’m more definite in telling people what I need them to do.”
Fifteen years after the publication of the first highly successful book of professional services management, David Maister’s Managing the Professional Service Firm, the idea of active management of law firms has become commonplace. But many firms, it seems, expect partners to learn to manage just by doing. For those firms that are growing or changing quickly, courses such as these seem to offer a useful crash course in leadership thinking. Just don’t think of it as a holiday.