Ciarán Fenton
Leadership Consultant
Facilitating Emotionally Intelligent Boards
A speech to members of The Managing Partners’ Forum’s
Debate on The Future of Partnerships
Is the partnership model a busted flush?
London, Thursday, 4th. April 2019
Fellow providers of professional,
advisory and consultancy services to clients,
Good morning!
My thanks to The Managing Partners’ Forum
for inviting me to speak on the motion
this morning which is:
The Future of Partnerships
Is the partnership model a busted flush?
I will argue that the partnership model
is suffering from boiling frog syndrome
The water around it is tepid
the temperature rising by the day
it’ll be dead before it realizes what’s happening
I will focus my remarks on legal services partnerships
because I know them best
However, my comments apply
to almost all professional services partnerships
and contexts
In respect of lawyers, I must start by
unburdening my conscience
I have a sort of
“love-hate.”
relationship with them.
Sometimes,
I find them VERY frustrating
and sometimes
They are the most engaging people in business I know
Frustrating because often their
Emotional intelligence or EQ
is in inverse proportion to their IQ
Engaging because, when they access their EQ,
there are few more engaged
And in matters of leadership
EQ, for the avoidance of doubt
as lawyers like to say,
is what the partnership debate is about.
Since EQ outstrips IQ in importance
in leadership, therefore
in partnerships, it really matters
I should make clear
at the outset
that I am not a lawyer.
Note I didn’t say I’m a “non-lawyer.”
– that embarrassing ubiquitous misnomer
as if there’s such a thing as a non-doctor –
But I did major in Law
in my business degree
and then I spent most of the next 35 years
working with lawyers
First as an accountant –
and later as a director
in various organisations
And when I set up my leadership consultancy,
over 15 years ago,
I ended up spending
more than HALF my time
working with lawyers of all kinds
because they were experiencing
leadership “issues” at work
In-house, private practice,
public and private sector,
B2C and B2B.
Lots of in-house lawyers
– a key source of partnership fees –
were becoming leaders
because companies twigged that the cheapest
legal services were best provided in-house
and they needed their legal teams led
so in-house lawyers had to learn to lead
in a corporate environment
And because private practice firms
started to realise that the old ways weren’t working,
if not sure why exactly,
they too began to look at leadership issues
So I facilitated leadership programmes
with General Counsel
and their in-house teams
and with private practice managing partners
and their teams and boards
Consequently, I became immersed
in all the key partnership issues
and I also came to know
and understand lawyers as people
human beings
with good days and bad
in one of the few remaining
unreconstructed sectors on the planet
I warmed to the people
and to the subject
gave many talks,
facilitated workshops and off-sites
wrote blogs and articles
However, where I gained the most profound insight
was in the scores of 1-1 sessions
that I facilitated
with lawyers,
young, old and middle-aged
These were often deeply moving
as the person behind the professional mask emerged
So I must know hundreds of lawyers
– which makes me feel like a kind of
David Attenborough of the sector.
Fascinated –
even a bit obsessed
in the fascinated sense
perhaps a bit envious
but not one of them.
And In the main,
most lawyers I’ve met are
usually “nice” people.
and they’re invariably bright –
sometimes, awesomely bright.
And they’re incredibly hardworking.
and they’re interesting
and good company
because they tend to be
readers and thinkers –
and have opinions on everything –
from politics to sport.
But there’s one thing
I’ve come to notice
Over the years with all lawyers,
is that they feel
they have to know
ABSOLUTELY EVERYTHING!
Now,
I don’t BLAME them for this.
Society grabbed very bright
young people from university,
put them through law school –
where they force-fed them
an adversarial model,
and more often than not
made them value thinking
over feeling.
After that,
They worked them to death in law firms
Where they had to knuckle down
under the partnership system
where billable hours
were measured to the minute
And, of course, we know that
people tend to deliver only what’s measured
The system required lawyers to be tough,
analytical, unemotional
and fees oriented
And the partnership model was the best Model to support that system. So it thrived.
and to a large extent, it still does
and there was and is, currently
no incentive to change it,
proactively
But the problem is that many
lawyers ended up in leadership roles
as Managing Partners
and they design organisational models
and they lead people
in a modern organisational context
And these essential activities
can’t be billed by the hour
yet must be done
And this reality is resisted by some partnerships
which insists that their managing partners bill hours
when they should be on zero hours
because leading is a full-time job
And even those firms which allow their
managing partners zero hours
some experience passive aggressive
carping from some partners
who feel they are feeding freeloaders
and sometimes it’s not so passive aggressive
And these managing partners sit on boards
and take strategic decisions
or contribute to decisions
but when they do so
most do so with the mindset of lawyers
Even they admit
they were not trained to lead
and some I have spoken with
frankly, don’t value leadership skills
as much they value legal skills
So how can we trust their leadership?
The partnership model assumed
that there was NO case to answer in respect
of lawyers’ ability to run their own businesses
in-house or out
Notwithstanding the fact that their legal training
contained little or no leadership training
and the fact that great lawyers are not necessarily great leaders
Tho’ often the best lawyers become leaders.
And of course, lawyers do attend
Management and leadership courses
But they approach these
with a legal mindset, also,
forged in the crucible
of their legal training.
And their training
usually excluded the F-word –
Feelings
Lawyers are trained
to distance themselves,
to some extent,
from their feelings.
That’s OK
when it comes to black letter law –
Or in court –
Or when they want to win a deal point
But leading people
And designing models and organisational structures
requires a DIFFERENT skillset
It’s more problematic
it’s can’t be reduced
to an analytical problem to solve
It’s a bit
well, ‘touchy-feely”
And the problem is,
leaders can’t lead
and can’t design or redesign
sustainable organisational and leadership models
unless they engage with their feelings
and with other people’s feelings
I’m afraid there’s no way around it.
I know this to be true because of the work
I do with boards
My leadership programme
for main and operating boards
and executive committees
including the work I do with
partnership management boards
is called The Emotionally Intelligent Board
An emotionally intelligent board
applies EQ principles in its decision making
by understanding the inter-dependence
between the personal purpose of board members
AND the purpose of the organisation
AND the purpose of the board in achieving
the objectives of the organisation
As a reminder the core principles
of emotional intelligence are
- Empathy
- Self-awareness
- And an ability to negotiate needs productively
And it’s in the area of negotiating needs productively
that lawyers and managing partners sometimes struggle
In my view an emotionally intelligent board in a law firm
or any professional services firm
should start planning, if not already,
for the demise of the partnership model
because:
Society and therefore the market
is increasingly saying YES to high EQ in decision-making
Witness the 20% weighting given to ESG factors
in the ranking of the TOP 100 CEOs by Harvard Business Review. And over time this weighting will increase
Or witness the massive increase in impact investment assets
which require nuanced emotionally intelligent decisions
not crude ROI analysis.
And society is saying YES to emotionally intelligent leadership
Witness the hugely positive reaction
to Prime Minister Ardens’ high EQ response
to the atrocity in Christchurch last month
And if society is saying says to high EQ leadership
it’s, therefore, saying yes to high EQ boards
Witness the emphasis on soft issues in
the recently updated corporate governance codes
e.g. FRC and Wates Principles
But the partnership model tends,
more often than not to say
NO to high EQ generally
NO to high EQ leadership specifically
AND NO to high EQ boards consequently
There can be only one logical explanation for this
Lemming-like behaviour
Lawyers suffer from what my Dad used to call
“compound ignorance”
They don’t know what they don’t know
And they don’t know enough about EQ
because it isn’t valued
and the reason it isn’t valued
is because it isn’t measured
Just Google emotional intelligence
or mindfulness or empathy at work
And you will get thousandths of hits
The EQ focus is not a fad
EQ is here to stay
And it embraces #metoo
and gender pay equality
The fads have gone.
They were blown away
By the last corporate scandal.
And the link between corporate scandals
and the demise of the partnership model
is that trust in business is at all time low
And law firm partnerships and their in-house clients
are in danger of being perceived
to be standing by
while that trust is lost,
the partnership model
is seen as part of the problem
not part of the solution
And part of the boiling frog syndrome
is that society will punish lawyers
and all professional service providers
especially auditors
For not protecting them better
against the excesses of the market
and of course, there’s a particular injustice to this
because in-house counsel are frequently bullied by their
employers, put under “elevated ethical pressure”
– a term used in a 2016 UCL Moral Compass Survey into in-house counsel –
And sadly, the profession
appears not to be creating
an environment in which lawyers can
have each other’s backs
Private practice partnerships are not rushing
To the aid of their in-house comrades
whilst taking their cheques
and The Law Society and SRA
are not geared to help either
Prof. Stephen Mayson in his
current review of the provision
of legal services appears
to be putting the role and purpose of in-house counsel
under the microscope
For good reason
“The Review”, he says “provides an opportunity
to reflect on whether the regulatory provisions that
apply to in-house counsel could be better crafted”
He’s right because sometimes they are forced to play down their responsibility as Officers of the Court
and to “do more for less”
a mad principle if I ever heard one
And yet in-house counsel and out of house lawyers
don’t confront “the business” which feeds them
And in-house counsel don’t have
as I believe they should have their
Office of The Court title
written into their contracts
Their independence is sometimes compromised by
their LTIP and bonus schemes
In-house lawyers have trained the business to get “more for less from them” yet also have trained “the business” to expect high fees from private practice
And this situation is held in place by all
concerned
It keeps the partnership model
alive and kicking
Why would anyone do anything
to rock this lovely boat?
Why would plump partnership turkeys
Vote for a new brand of “touchy-feely” Christmas?
It’s, like, market forces,
Innit?
But ironically, market forces
will make the water boil faster
because the market i.e. society
is getting very fed up
with this mess
they want their lawyers
standing up for the law
they want fewer corporate scandals
and avoidable business collapses
they want business employers to treat lawyers better
and private practice lawyers, especially the younger ones,
to be less stressed
In the current political context
with a vacant political centre
and an extreme left
and extreme right
we need our lawyers
to stand for up
for what people died in trenches for
None died for the billable hour
although, ironically, some lawyers
have died from stress,
alcohol or drug addiction in its service
So those who provide value to society
through organisational models which value
shared purpose above personal wealth
will thrive and those that don’t, including typical legal partnerships, will, ultimately, collapse
I acknowledge that many will disagree with my point of view
However, I take heart from the fact that even academics and
commentators can’t agree
In her book, Leading Professionals, Power, Politics, and Prima Donnas,
Professor Laura Empson
writes that ineffective leadership in partnerships
can be ineffective in three ways
First, they may be a failure “to contain organisational conflict”…
Second “they may avoid conflict
and fail to resolve inherent tension.”
And Third, if some within the partnership live
“within a harmonious cocoon, they may become disconnected from the anxieties of others.”
Yet she writes that “partnership works
in professional organisations because
it is the optimal
method of reconciling
the competing interests
of three sets of stakeholders:
professionals,
owners, and their clients
thus bringing together and reconciling questions of power, benefit and accountability.”
I’m not so sure this is still the case as much as it was
in the past.
Professor Stephen Mayson
in his review of her book
in Modern Legal Practice
challenges the stability of her four “characteristics of partnerships
“career-long tenure,
close personal relationships,
shared values and mutual trust…”
Given “generational differences and expectations.”
– what some call the millennial problem
a term they hate
as if none of that cohort is unique –
“changing promotion, retention
and reward structures
and increasing geographical
and social diversity are eroding all four of them”.
He adds that “there’s an increasing shift
from the individual to the organisational
and “these challenge autonomy, control,
power, security and performance assessment.”
For “challenge” read
increased temperature around
the frog
But the part of his Review that stuck
the biggest chord with me was
where he writes that
“Increasingly firms are not only
abandoning Partnership as a legal form
but also at best paying lip service
to a partnership culture and
ethos in their structural
and governance arrangements.”
Many factors will contribute to
The destabilization of partnerships
And these are well rehearsed by
commentators like Richard Susskind,
Jordan Furlong and Mitch Kowalski
to mention just three
But it will, in my view, be social factors
that will bring them down.
Indeed Professor Empson
in a very moving BBC Radio 4 Documentary
entitled “Insecure Overachievers”
set out in various interviews the shocking
impact of stress in professional services firms.
And Philip Wood QC,
visiting Professor of Law at Oxford,
wrote in the January 2918 Edition of Modern Legal Practice:
“legal systems are, in all their aspects,
the most fundamental source of morality…
the world may be able to do
without its various philosophies
and religion…it cannot do without its laws”
But it can do without its partnerships.
And, in time, it will.
Thank you
