Is the partnership model a busted flush? My speech to The Managing Partners’ Forum…

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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

 

 

  1. Empathy

 

  1. Self-awareness

 

  1. 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

 

2 thoughts on “Is the partnership model a busted flush? My speech to The Managing Partners’ Forum…

  1. Great talk/speech. Love it. Perhaps I can be so bold to sum it up this way:

    Hard is soft; Soft is hard.

    And for the record, with a few years in the lawyering/leadership bank, lawyers don’t understand EQ and are unlikely to do so until they get out from behind their desks and go spend some time with…not more lawyers but real people. Wander to the most unlikely and unassuming places without any agenda. And for god’s sake stop trying to understand anything and everything. We live in a VUCA world and even law is changing…in case no one told them.

    Take care.

    Julian

  2. Such important messages, here. Thank you Ciaran. Maintaining connection between the personal, the partnership and the political is more important than ever, and I notice in my work, as you do in yours, that disconnection is leading to sickness in all 3 of those spheres. K

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