Latham's Robert Dell, Jackson Lewis's Vincent Cino: Best Practices For Leadership Succession

Apr 8 2014, 4:20pm CDT | by

Latham's Robert Dell, Jackson Lewis's Vincent Cino: Best Practices For Leadership Succession
Photo Credit: Forbes Business

In 2007, Patrick McKenna initiated a survey to an extensive list of law firm leaders asking them, among other things, which law firm managing partner (chair/CEO/etc.) they most admired for their management/leadership competence. Far and away the most revered was Robert M. Dell, chair and managing partner at Latham & Watkins.

A recent announcement that Dell would be retiring at the end of 2014, after 20 years as Latham’s firm leader, reflects a loss that will not be easy to fill.  That said, the steps the firm is taking should serve as a role model for any firm that takes management and leadership succession seriously. Following are just a few of the things that Latham & Watkins is doing right:

• Dell gave the firm over 13 months advanced notice of his decision to step down.

• To oversee the identification and election process, Latham has appointed a succession committee that consists of a diverse group of partners from a variety of the firm’s offices and practice groups.

• Once the new managing partner (MP) is elected, Dell will work with the individual for approximately 6 months to help ensure a smooth transition.

• Following this transition period, Dell plans to leave the firm in order to “get out of the way” of whoever succeeds him.  ”When a new person is coming in, following a person who has been doing it for two decades, I think that new person deserves a lot of space,” he says. “ So, my view is it’s best for me to retire and to let that person create his own successes, or her own.”

Contrast this example with the departure of Jenner & Block’s Managing Partner, Susan Levy, to Northern Trust Corp., as reported by The American Lawyer (sub. req.). Following a year where gross revenue fell 8 percent and profits per partner fell 17 percent, Levy, who also served on the firm’s policy committee and chaired its management committee, is departing before her successor is even chosen, much less transitioned and up and running.

Now, with these polarized examples in mind, think about your personal investment portfolio; imagine the corporation in which you are most heavily invested suddenly announcing that their CEO is fleeing their post, effective immediately.  As an investor, would that be a buy or a sell signal for you? This is rhetorical, of course, but quite illustrative, nevertheless. While any Fortune 500 company would avoid such a situation like the plague, it can be commonplace in law firms.

Leadership transitions can be complicated and messy or carefully planned and executed; one advances the best interests of the law firm while the other does not and law firms need to take heed lest their partnership fall into revolt.  In today’s piece we wanted to set out some of the best practices and potential pitfalls that both departing and incoming firm leaders need to be conscious of and sensitive to. We’ll begin with the abdicating leader.

When You Are The Abdicating Leader

FIRST, when it comes time to step down, the most immediate and appropriate course of action is to assist in the formation of a selection committee. Because there is no true separation of classes in the corporate sense—a board, CEO, and shareholders—a varied and somewhat heterogeneous committee should be put in place to diversify opinions and help avoid cronyism, favoritism, or, in some cases, nepotism.

Some firms will include their incumbent in this process. Jones Day has done this for decades. Jackson Lewis P.C. does this as well. Firm Chairman, Vincent Cino, had this to say:

The exiting leader should have some level of input because he or she has a unique understanding of how the firm functions and what qualities may be necessary to guide the firm into the future. It goes without saying that the former managing partner’s or shareholder’s input must be completely independent of his or her personal relationships and must be focused solely on the best interests of the firm.

But, with the ever-looming potential for pollution of the candidate pool in mind, best, or more accurately put, safer practices dictate that you neither sit on the committee nor suggest candidates for consideration by the committee.The countervailing argument to inclusion, based on simple psychology, is that your selections, despite efforts otherwise, will likely be similar to you in many important aspects—see here, here, and here.

Though you may have done an incredible job with your seat, uniformity can, and often will, carry the firm on the same path, reinforcing the existing model and discouraging evolution, thereby supporting what Cino considers the biggest challenge to newly minted MPs: “The status quo.” He went on to say:

No two leaders are the same, and you should not have clones of each other. You have to realize that change is inevitable and what is most important is proper planning and implementation. At the same time, resistance to change is sometimes very strong, especially for lawyers. You might hear ‘Well, we never did it like that; we’ve been very successful doing it this way.’ But just because something worked in the past doesn’t mean it will work down the line. Especially now after the 2008 recession, which really changed the practice of law. Any managing partner will tell you that protocols had to be altered in terms of how firms collect money, build their practices, and maintain profitability. Clients have become savvier, more sophisticated, more demanding in terms of cost. And the competition is intense. You have to be one step ahead of the curve at all times.

Further muddying the waters is the affinity that mentees commonly feel toward their mentor. After a period of training, when they are handed the keys to the kingdom, there’s a temptation to play the “Great One’s” Mini-Me. As the gateway to their (the successor’s) seat at the table, indebtedness to you can fester an obligation to carry on in your style. And where succession is necessary to a firm’s advancement and progress, a clone defeats the purpose because more of the same old same old encourages inertia, stifles innovation and independent initiatives, and feeds the status quo.

SECOND, one common delusion that departing leaders may hold is that, at worst, they are indispensable, or, at best, the firm will stumble without them. It is not uncommon for leaders to indulge in a secret fantasy about one day announcing their resignation and leaving the office amidst sorrowful tears, a standing ovation from partners and staff, and general consternation about the future, now that they are leaving.  Here is how one firm leader expressed it, albeit somewhat tongue-in-cheek:

You should know: I was ‘indispensable’ even though the Firm has not ‘stumbled’ under my successor’s leadership; that I don’t like it one bit, but the Firm is ‘thriving’ without me; that I have been very positive about my successor and his new leadership team and believe me, it has not been easy!  I never agree with the [probably] hundreds of my partners that constantly complain about the new leadership team and want me to start a coup… Can’t you tell? I have moved on!

The bittersweet reality is that your firm will survive, and even thrive, without your direction.  You should, therefore, compose a realistic and positive story to not only tell people about why you are stepping down, but also to convey your excitement about your next adventure and laud the firm’s future.

THIRD, much like a mortally wounded soldier jumping on a grenade meant for his platoon,  since you are already leaving the post, the transition period is a good time to finally deal with annoying operational problems or troublesome personalities that have chronically plagued the firm. This allows the new leader to immediately hit the courts running—strategy, compensation, expansion, etc.—rather than having to mop up the floor, first.

While you should confer with your successor and gain their concurrence prior to your efforts, confronting these (often) sensitive and sometimes messy situations is one of the best gifts you can give your replacement—a clean slate to work from.

FOURTH, considering the (no doubt) vastly different view you now have of the firm—years of firm management will do this—take stock of all the information (explicit and tacit) that you wish you’d known or had prior to your incumbency. As the incumbent, you typically know more about the firm and its operating nuances than anyone else.  Much of that information—or at least how and where to find it—is stored in your head.  Think about how you might codify and share everything you wish you had known when you first took office.

FIFTH, to assure the success of the new leader, you should, under no circumstances, speak with anyone at the firm about his or her performance.  Not only is there potential for being perceived as negative or unsupportive (especially by management), but such conduct can also unnecessarily poison the well. Your successor will do things differently; they will be commandeering your old seat. Nostalgia, sentimentality, remorse, regret, and any number of other emotions will undoubtedly surround and potentially cloud your assessments. Remaining neutral, regardless of your thoughts, is much safer for everyone’s sake.

Further, seeking to police any backward facing critics is a good idea: “Well that’s not how we handled things when you were the managing partner.” While this appears (at least seemingly) loyal to you, it is disloyal to the firm. Though their ingratiation may be flattering, your focus should be on supporting and cultivating the strengths of the new leader for the betterment of the firm. As a retired leader, you must take issue with unfounded antagonists.

To illustrate a supportive transition, in a recent discussion with a soon-to-retire firm leader, we considered a number of substantive issues he needed to discuss with his successor, including his (the incumbent’s) communication with various partners after he has passed the baton.  Following is the script he prepared for himself to communicate to his successor:

I’ll always be here to help you, but you should expect that some of our beloved partners are probably going to go around you and come to me whenever you make an unpopular decision.  And, if you are doing your job as our new firm leader—as I know you will—this is guaranteed to happen.  I want you to be confident that I am not going to respond, in any way, to any complaints. So don’t let the prospect of my responding impact your decision making.  Even if you choose to fire someone who has worked closely with me for many years, you should proceed to take that action.  And rest assured that if I don’t agree with some course of action or observe you doing something contrary to the way I did it, I would not go to any partner to voice my feelings.  This is now your firm to lead and you may call upon me should you ever feel the need for a sounding board.

FINALLY, the best advice we can give any departing leader is to simply let go. This means no sitting on the executive committee/board; no shifting from MP to firm chairman; in fact, you shouldn’t be involved in any leadership functions whatsoever. While you should cherish all those lovely things they said about you at the retirement dinner, you are now a beloved part of the firm’s history. The firm must learn to live without you at the helm, you must learn to live away from it. The sooner you get out of the way, the sooner the firm, and you, can move forward.

When You Are the New Leader

As consultants, we often tease new MPs by asking them what the hell they were thinking when they took up such a heavy yoke! But sometimes their partners aren’t so jocular… For all the burdens MPs are willing to shoulder, their willingness to do so is often disparaged. Many partners see management as overhead—drudgery that not only fails to generate revenue, but barely reflects on the legal professionalism that defines a lawyer. Exacerbating the situation is the instinctive bristle attorneys feel at the suggestion that they can, or ought to, be led.

Though MPs are generally sacrificing for the betterment of the firm and believe that they should be appreciated commensurately, the partnership often sees the MP as a trusted agent that is serving at their pleasure; the partnership is allowing leadership to hold the title; leadership should be beholden to them! Regardless of this reality, one of the common illusions many new leaders suffer is that their appointment revolves around them, rather than around the firm and the partnership.

Bearing this in mind, as you begin your new role, blindly taking to heart all of the wonderful well-wishes, congratulations, and accolades is quite seductive and can blur the forest through the trees.  You will only succeed when you fully embrace reality: Your partners don’t work for you; you now work for them; they have just become your most important client. With this lens in place, let’s turn to some of the more important criteria to keep in mind, beginning with preparedness.

FIRST, few new firm leaders are as prepared for the transition as we, or they, might wish.  As one MP expressed it: “New firm leaders mistakenly believe that because they have served as a practice group manager, as an office head, or on the firm’s executive committee, they have the necessary background for taking on the role of leading the entire firm . . . Not even close!”

It follows that two unavoidable requirements of the position should be that you, as the new MP, have a sufficiently detailed job description, and that the description be widely circulated throughout the firm. This way, not only can you appropriately set your expectations, calendar, workload, and lifestyle, but also the rest of the firm will more accurately understand your responsibilities and can, therefore, treat you accordingly.

Indeed, one of the biggest issues we hear new leaders wrestling with is the amount of time it takes to do the job. Many of them are not full-time MPs, and fuzzy responsibility boundaries encourage some to mistakenly believe that supporting an active practice in parallel is possible. In fact, a recent Citibank/HBR 2014 Client Advisory provided commentary on this challenge to current law firm leadership:

One development which gives us concern is that some of the newer breed of leaders continues to maintain busy, full time practices.  In this scenario, their clients’ needs are likely to take priority, to the detriment of the management of the firm.  If we could see any change, it would be that firms recognize that to be effective, the firm leader is best performed as a full time role.

Certainly, one of the biggest dangers of poorly detailed responsibilities is the propensity to underestimate—and in some cases, dramatically—the scope and responsibility of managing an entire firm. How detailed is detailed enough? This is subjective, of course. But, while a measure of firmwide distribution of details needs no perspective—firmwide is firmwide—a gleaming example of “sufficiently detailed” is one description that we examined, which encompassed around sixty bullet points of responsibilities.

Complimentary to this is establishing and policing best practices for the way that others should work with you. How do you prefer to receive information—in person, by phone, in writing? Is your door open or do you prefer that people arrange appointments? How do you feel about being called at home? These questions and ones like them can help, immensely, where managing and optimizing your time is concerned.

SECOND, get a crystal clear understanding of your partner’s expectations. A common misconception is that, when combined with their mandate, an MP’s strong reputational capital and prior track record of success guarantees the support of the partnership. This false sense can result in their solely focusing on the technical aspects of implementing strategy, while (wrongly) assuming that a critical mass of support is already in place.

Complicating matters is that as a partnership’s expectations of the MP increase, so does the emotion in, and intensity of, the environment, making it difficult if not impossible to separate support from anxiety, or excitement, or anger, or emotions otherwise. First time MP’s, in their rush to make their mark, often mistake emotion for support and can act first and ask questions later, damningly neglecting to factor a true measure of their partners’ appetite for change.

When Vincent Cino began his incumbency at Jackson Lewis P.C., he was sure to avoid this mistake:

I spent a considerable amount of time—some in-person visits, some telephone calls because our offices are so widespread across the country—talking to senior partners, some new, and some lateral partners, just to get a sense of ‘How do you think we’re doing?’ ‘How can we do better?’ ‘What do you think the future holds?’ And just talking to them about what [they think] our priorities should be over the next five years. Number one, people loved that I was asking their opinions, and number two, I got a lot of good ideas.

As a new leader, you must use your time—ideally before your actual transition—to gain significant information that will refine, and potentially redefine, your strategic agenda going forward.  In most situations, your initial concern should not be to hit the ground running, but to hit the ground listening. As early as possible, get input. Conduct one-on-one interview sessions with your partners and other professionals in the firm, asking each the same questions to ensure coverage and consistency. Get their insights, solicit their advice, and carefully evaluate the emerging themes. Clarify what they want to see you shake up and what they want to see you preserve.  After all, how can the partnership know that you have their interests in mind if you don’t actually know their interests?

Cino sums it up: “At the core, it’s about how people feel, how people react, and an overall comfort level [about this being a] thoughtful process—it’s not helter skelter; it’s not ‘shoot from the hip.’ Everybody has input. Everybody can discuss it. And then we vote. I really think that’s the only way to do it.”

THIRD, many of your current relationships will need to be massaged, shifted, or completely transformed, depending on their composition and status prior to your engagement. A harsh reality of leadership is that it functions under a microscope—it’s hard to hide on the top of the hill. Your decisions, how you make them, with whom you consult, who benefits from what, etc., are all viewed very carefully by your partnership. If you are to be influential and otherwise successful in your position, you will need to maintain a position of neutrality, fairness, benevolence even, where the partnership as a whole is concerned.

FIFTH, based on what you’ve been hearing from your interviews with fellow partners, settle on a few major priorities and act. Michael Porter—phenom to the world of strategy—wisely said: “The essence of strategy is choosing what not to do.” Undoubtedly, there will be myriad issues of great importance to tackle. You can’t fix them all at once, so, in following the advice of Porter, you’ll need to make some choices. This is the incredibly delicate and vital stage where you begin to align your firm around a shared direction for the future.

Importantly, within your first 100 days, you need to target a few early wins. Momentum counts and nothing succeeds like success. Ideally, choose a semi-material problem that your firm has not been able to address and fix it quickly. Much like finding one of the bigger guys in the prison yard and quickly dispatching him, this is how you make your bones and secure the positive perceptions of a successful transition.

One firm leader we worked with began her term with an interesting and positively-perceived initiative: Numerous professionals and staff throughout the firm collaborated in small task forces to identify the firm’s “sacred cows,” which were internal policies, actions, tactics, etc., that frankly made no sense, frustrated clients, and impaired the delivery of quality services.  She then set about having these same task forces kill the sacred cows by either proposing ways to effectively eliminate the past procedures, change behaviors, and/or adopt new approaches. Don’t ignore the power and momentum of accomplishing a small win. Look around, listen, and find some small wins that you can bring about.

FINALLY, taking another page from Porter’s book, use the Eden of long term competitive advantage as your focus. Contrary to what some business literature suggests, in our experience, successful leaders don’t worry about legacies.  They care, instead, about the long-term competitive vitality of their firms, and come what may, legacy or not. We’ve been around long enough to know that if you are focused on fashioning a legacy, you will be remembered as, simply, the guy (or gal) who was focused on fashioning a legacy! The leader who sacrificed all—their time, efforts, sweat, blood, and tears—to see the firm onto competitive and stable shores will be chiseled into the annals of a healthy, aggressive, and virile firm.

Note: This piece was written in collaboration with Patrick J. McKenna, internationally recognized author, lecturer, strategist, and seasoned advisor to the leaders of premier law firms.

 
 

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