Andy Clayton has been on both sides of the fence, having practised as a commercial lawyer for 18 years, including as a partner, before leaving the profession to analyse it from the outside.
After almost two decades as a commercial real estate lawyer, Clayton decided he couldn't face the prospect of practising law as a partner for 25 years or more until retirement.
Before then, he'd enjoyed a successful career in London at top tiers such as
Herbert Smith Freehills, in Melbourne at King & Wood Mallesons, and most recently at Osborne Clarke in the UK, where he became an equity partner and headed the commercial real estate team in the Thames Valley office.
But he decided to leave it all behind, and look at the legal profession from a different perspective.
Clayton re-trained to be a business psychologist, and subsequently joined a UK consultancy that specialised in the assessment and development of senior leaders.
And, as of just recently, the former lawyer is putting all his experience and knowledge into practice in the New Zealand market after joining Auckland-based Sheffield, a leading Kiwi search, recruitment and organisational development consultancy.
He hopes to use the comprehensive research he undertook in the UK into the legal partnership model and apply it here to help New Zealand law firms and partners get ahead.
His study involved structured interviews with a range of partners from commercial law firms, and the analysis of psychological data regarding the 'typical' profile of a partner.
Clayton says the findings revealed three key areas of risk that could inhibit partners from flourishing in the post-GFC legal market: Leadership, strategic thinking and innovation.
In regards to leadership, although partners generally have the ability to build good working relationships, they have a narrow understanding of how to manage team performance and influence others through sophisticated stakeholder management.
"They also exhibit low levels of assertiveness and raised levels of emotionality, meaning that they are more likely to focus on setbacks, become more easily disappointed in others and avoid having robust feedback discussions," he says.
Partners are also trained to be technical specialists and are generally quite narrow in their thinking.
They have a sceptical disposition, like to deliberate and do not enjoy operating in ambiguous or fluid environments when they do not have a handle on everything, which becomes a major barrier for strategic thinking, says Clayton.
And in regards to innovation, partners are less intellectually curious and less open to explore unknown situations and novel ideas, preferring to stick with the 'tried and tested'.
"The ramification is that partners are less inclined to create inventive solutions and may struggle to respond positively to the changing legal environment," Clayton says.
And although his research was done in the UK, a variety of the lawyers who took part were New Zealand qualified, meaning the characteristics are likely to be similar among partners here, he says, adding that since his arrival he already he sees huge parallels between the UK and NZ legal markets.
The same issues he's noticed pop up in NZ include clients being increasingly likely to follow individual partners rather than firms, fewer equity partners, demand for greater inclusion and diversity, the rise in the power of in-house counsel and Generation Y lawyers who are less inclined to follow the traditional partnership route.
A major part of the problem, Clayton feels, is that law firms aren't really concentrating on developing their partners all that much – in fact, this very problem led to him leaving the profession behind.
"It felt too constrained and I couldn’t see where I would develop personally, broaden my skillset and also get the variety and challenge in my work that I enjoy…
"I believe that this type of dilemma is not uncommon amongst partners. Whilst law firms are placing more emphasis on developing their non-partner population, there is far less focus on the career path of a partner, the key transitions and how firms can support, challenge and develop partners over what can be a considerable timespan."
This is an area of particular interest to Clayton, and one he is currently focusing on as a senior consultant at Sheffield.
He hopes that continuing to build on the research he's already done will be an invaluable way forward in identifying key partner qualities that will enable law firms to succeed in such a volatile environment.
These characteristics will hopefully inform the talent development strategy of law firms, Clayton says.
"[I was struck by] the degree to which the legal profession is 'behind' other sectors in terms of its lateral hire/internal promotion processes. Most leading organisations outside the legal sector would not hire a senior executive without undertaking a third party professional assessment."
Clayton's top tips for Kiwi law firms are:
- Ensure that a law firm's business strategy is aligned with the talent strategy; undertake a talent audit to ensure the firm has the right people with the right skillset.
- Adopt robust, innovative selection/promotion processes from graduate level through to lateral hires and equity partner promotions to ensure that those individuals with the requisite potential, capability and culture-fit are chosen.
- Create a career development framework that develops lawyers at key career transition stages.
- Create a succession pipeline through identifying those lawyers with high potential.
- Drive a leadership culture by aligning reward and status to those partners who value and demonstrate broad leadership behaviours as opposed to those who are solely concerned with bringing in clients and billing.
- Encourage partners to have less of a silo mentality and become more collaborative as better teamwork will lead to stronger, more enduring client relationships.
- Consider whether greater efficiencies can be driven by outsourcing back office functions or by delivering commoditised work from cheaper office locations.
- The hourly billing model isn’t working for many clients so embrace alternative ‘value added’ billing arrangements to forge closer client relationships.
- Anticipate whether continued globalisation might drive the need to form a strong international network.
