Baker McKenzie Is Building for the Future With Paul Rawlinson's Blueprint
The firm is still recovering from its leader's death as it continues the mammoth task of preparing for an uncertain world.
September 24, 2019 at 05:30 AM
14 minute read
Two and a half years ago, newly elected Baker McKenzie chair Paul Rawlinson laid out his 2020 vision for the international juggernaut. He introduced bold changes, among them focusing the firm in core areas, planning to integrate its financial system, pushing determinedly into transactional work, and aiming to dramatically increase bench strength in the world's biggest legal markets.
Baker McKenzie wasn't alone in its overhaul. Global firms existing in these uncertain times are attempting to shore themselves up against an ever-competitive industry and an unstable geopolitical system.
There are shifting tides a firm can prepare to handle, but the sudden death of a figurehead isn't among them.
Hailed as a visionary leader at the time of his election in 2016, Rawlinson died in April. His cause of death hasn't been made public. It followed six months after he took leave from his position to deal with medical issues caused by exhaustion.
Rawlinson's death came as a shock to his industry colleagues and peers—and his firm is still reeling as it continues the mammoth task of preparing for an uncertain world. As Baker McKenzie comes to terms with the short- and long-term effects of Rawlinson's death, it's been forced to carry out a future-proofing mission without the guidance and leadership of the man who drew it up. Can the vision survive?
|A Leader Lost
The partners and staff at Baker McKenzie recognize Rawlinson's significance to the firm.
"The impact it had internally was and still is a huge deal—significantly more than people who joined the firm afterward might have anticipated," a partner in the firm's Europe, Middle East and Africa arm, who joined the firm after Rawlinson died, says.
For London management committee member Samantha Mobley, Rawlinson's death was "absolutely devastating." The two had long been friends and colleagues. She acknowledges the magnitude of his loss, both for the business and its people, especially given his pivotal role in the firm's future planning.
"Paul's arrival as the chair charted us on a new strategy to transform our firm," Mobley says. "He set out a vision that would ensure it remains relevant as we go forward in an increasingly competitive marketplace."
Jaime Trujillo has held the firm's acting chair role for the past year, since Rawlinson stepped away. But in mid-September, the firm narrowed its field to three contenders in a chair election expected to take place in October: Fiona Carlin, head of the firm's new financially integrated EMEA+ business; Hong Kong managing partner Milton Cheng; and North America CEO Colin Murray.
|The Plan
Rawlinson's 2020 strategy focused on several key areas, the most laborious of which is the firm's ongoing push to create and maintain a more closely aligned global business.
Baker McKenzie is one of a few historically international law firms. Founded in Chicago in 1949, it established a non-U.S. presence when it opened in Venezuela six years later, and added further offices across the Asia-Pacific region in quick succession.
Dentons global chairman Joe Andrew says Baker McKenzie "changed the legal profession."
"They were the first global firm, and they took a significant number of risks to do what they did when they did it," he says. "They deserve a huge amount of credit for that."
But the firm's first-mover advantage also created an issue it now has to contend with, Andrew argues. Having grown up before the internet and easy international communication, the firm's decisions were more likely to be made office by office. Shifting away from that approach is something all firms with long histories have to deal with, Andrew explains.
"Historically, organizations had to have a structure that allowed more local decision-making, on one hand, but more hierarchical, rule-based management on the other hand, because there was no way to quickly speak to leadership," Andrew says. "That is why all organizations had stricter hierarchies and were much slower to make decisions."
For Baker McKenzie, the first law firm to operate as a Swiss verein, beginning in 2004, changing that structure is all the more difficult. With nearly 5,000 lawyers spread across more than 75 offices and $2.9 billion in revenue, it is an enormous ship to redirect.
Nonetheless, the firm has made dramatic progress in the past year to shift away from a siloed approach, led by two significant projects. It is at once integrating its profit pools and streamlining its support staff workforce, in order to boost profitability and move away from a focus on office and practice productivity. The latter effort aims to encourage the firm's offices to work more closely together, and to free up capital to allow the firm to make investment decisions more quickly.
Baker McKenzie currently operates three profit pools across its three business lines globally: in Europe, the Middle East and Africa; the Americas; and Asia-Pacific. The majority of its offices in those areas now share profits, with EMEA only recently moving to the new approach. The firm rolled out a financially integrated structure in the region last year, dubbed the EMEA+ network. Sixteen offices, comprising about 2,000 people, including 275 partners, now sit within the network and share profits as a result. Mobley says the change has removed impediments to collaboration.
"We no longer have long discussions about whether one office should send a secondee to a client if it's mostly benefiting another office," she says. "We just get on and do it."
While the majority of the offices in the firm's Americas business have been financially integrated for some time, the firm has rolled out measures designed to improve collaboration, North America chair Duane Webber says.
"We've been collaborative for a long time, but when we peeled back the layers we realized there was more to do," he says.
According to Webber, a change to the firm's remuneration system, which The American Lawyer reported earlier this year, is an important part of the process. Partners are no longer able to see how much they and others are paid. Instead, they can view a pay scale that charts how different pay brackets correlate to commendable behaviors.
Tony Williams, principal of Jomati Consultants, a U.K.-based international management consultancy, says such messaging has a big impact on collaboration within firms.
"Getting lawyers to think outside their own geography and practice areas is always a challenge, no matter what kind of firm you are," he says. "Everybody grapples with that. The incentives the firm has introduced to encourage integration get that message across quickly."
Webber, who joined the firm's management committee when Rawlinson was appointed chair, is confident that the firm's strategic focus will not be affected by its leader's death.
"Via those directional changes, Paul was playing back to the partners what they were asking for," Webber says. "That strategy doesn't change."
|At Clients' Command
Baker McKenzie moved to an industry-sector focus in 2016, highlighting clients it wanted to bring closer. Each key client identified in an industry group has a team of client service directors responsible for organizing attorneys to service that client. The firm emphasizes diversity of location, gender and practice when fielding a team, according to acting chair Trujillo.
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