Henry Marsden, Peter Carrick, Nigel Spencer and Dorothea Bannerman-Bruce outline how the legal industry is changing and the challenges that face the business leaders of tomorrow

Many current managing partners joined their firms before law became a global business. They worked hard, focused on their clients and then found themselves running increasingly complex and sophisticated organisations. Not surprisingly, the approach to leadership and management in law varies greatly and many leaders have been left to develop these broader skills in relative isolation.

This is compounded by the fact that every other fee earner in the firm is working hard, focusing on their clients and trying their best to ignore the things that management is doing. This article assesses the extent to which current approaches to developing partners prepares them for the future and the role that training/development departments play in this future.

Challenge one: sophisticated buyers driving efficiency

Budgetary pressure on in-house legal departments is set to increase, with many estimating a 10% to 15% reduction in legal spend over the coming year. As firms recruit experienced in-house legal teams, this trend will continue and drive significant pressure to reduce overall fees and maintain quality.

Some firms operating at the high end of work, where their clients' future may be at stake, may escape some of these pressures. However, the drive for efficiency will become the norm for most. Clients will routinely ask for the same work to be delivered more cheaply next year than this year and will be influential in how this is achieved.

The future will see a continuation of outsourcing aspects of legal work to lower-cost firms or jurisdictions. In-house legal departments will also take on more work previously given to law firms and practice management software or approaches will provide increasing transparency to work management. The partners of the future will need to be alert to, and at the front of, efforts to achieve lower costs on work currently seen as premium if they wish to retain client relationships.

Current partner development activities show that there is significant investment in these areas. According to Legal Education and Training Group (LETG) research, 88% of firms are running topic-based programmes to support their partners, and some of the most commonly cited topics are business development, fee negotiation and financial management. The most effective of these programmes will provide an understanding of the client's perception of value and ways in which these can be reflected in new fee arrangements. In turn, this will critically be grounded in a thorough understanding of the current and alternative economic models of the firm that must be considered when moving away from hourly fees.

Challenge two: new forms of organisation

The relatively high profit margins of legal services make it attractive to new entrants. At one end of the spectrum there will be the potential for supermarkets to gain a foothold in legal service delivery by making them available at the till or through in-store advisers. At less procedural levels of the market, there are sufficient resources and profit margins to see the entrance of firms that contract part-time fee earners who are highly skilled but unwilling to commit to full-time work. These firms provide high-quality, customised advice to clients and may challenge the longer term relationships that firms hold.

Partners will need to develop their strategic plans, differentiate their services and continue to innovate to win and retain clients. This will also require a different form of leadership, depending on the type of organisation they want to run.

Those at the cutting edge of current leadership development are working with business schools and external consultants to develop their understanding of strategy. This investment is typically focused on those in top leadership positions such as the managing partner, senior partner and those appointed to the executive who are sent to open programmes at Harvard or other European business schools.

On rare occasions these programmes have been brought internally and cascaded to a larger number of the partners within the firm to develop a pipeline of future leaders.

Challenge three: influential investors

De-regulation and high profitability will prove an interesting proposition to external investors. The potential to use the investment to accelerate a law firm's expansion and improve its performance is high. To ensure there is sufficient return on the investment, it is also likely to lead to the increasing professionalisation of firm management with a view to drive savings and create efficiencies.

Future leaders will need to plan, court and negotiate with investors and find ways to bring their fellow partners with them. Similarly, they will need to find effective ways to create greater forms of management. This has a tendency to be unpopular, relative to the more freely-operating partnership model.

LETG research indicates that a firm's culture plays a critical role in determining what forms of development are currently undertaken and what sticks. Most clearly this is the basis for balancing those activities that support the individual partner and those looking to achieve an organisational ambition.

Challenge four: legal sector consolidation

There are a high number of law firms in the domestic, European and global markets. In 10 years, globalisation, increased competition and continued fee pressure will see significantly fewer firms in existence. Those that remain will probably be significantly larger, complex and diverse. They will have successfully merged, navigated acquisitions, transformed and avoided being wound up or taken over.

This highlights that partners of the future will not just be continuing the stewardship of the firm they inherited. They will need to create a vision for their firm, gain commitment for that vision and be able to deliver the change so that the client experiences it. Achieving this in organisations more characterised by entrepreneurial partners and independent thinkers will demand much of future leading partners.

The current approach for post-merger firms is to blend the learning programmes of the legacy organisations to create efficiencies and start the integration process. It can take time to derive the objectives of the original merger and there is little evidence of specific integration programmes beyond inter-office secondments and mentoring schemes.

On a smaller scale of integration, laterally hired partners are carefully placed into existing partner programmes to bring them on board. It is common to offer coaching or mentoring to support these partners through the difficult transition into a new firm and its culture. The research indicates that this had been driven by failures to integrate lateral partners and the financial and reputational damage created by such failures.

Challenge five: technology advances

The ability of technology to transform communication, service delivery and practice management is well known. There are increasing examples of areas where technological possibilities have been grasped to the advantage of the firm (eg, BlackBerry, web cams, webcasts and e-learning) as well as practice management (eg, extranets and intelligent documents).

These technological advancements are noticeably driven by efficiency, speed and increased client control. Technology also requires partner behavioural changes that can be difficult to bring about. Typical examples range from moving to a new time-recording system to charging e-services in a different way to the chargeable hour.

The future will see a move from a few enthusiastic partners leading the way towards an environment where technology is embraced as a strategic activity across the partnership. The imperative will not just be to create opportunities but also to respond to other firms' innovations and address the risk of losing clients to innovative, efficiency-driven competitors.

LETG research into partner development indicates that this position is still some way off. There is little routine use of technology to deliver learning for partners and what is there is often regarded as insufficiently tailored to meet needs. Similarly, there appears to be little demand from partners or firms to develop an understanding of technology, beyond learning what they need to do make the most of the current office systems and software. This will need to change as technology plays an increasingly pivotal role in the delivery of legal services.

Conclusions

There are significant changes coming to the legal market and the demands placed on industry leaders. The research findings have also identified the accelerated investment in partner development over the last 10 years. There are now topic-based programmes, e-learning support, business school relationships, leadership training and coaching interventions to help partners meet the challenges of a modern partnership.

Progressive firms are also benefiting from trusted learning and development advisers who are tuned into and support the delivery of the firm's strategy.

Is the legal sector developing the partners of the future? The verdict is that it is mainly supporting partners to meet the current environment (appraisals, people development, client handling). There are pockets of excellence around developing the leaders (strategic understanding and engaging the firm), but there is more that could be done to equip partners to meet upcoming challenges.

Henry Marsden is a consultant at Moller PSF Group Cambridge, Peter Carrick is development manager at Clifford Chance and the LETG chair, Nigel Spencer is head of training and development at Simmons & Simmons and serves on the LETG research committee and Dorothea Bannerman-Bruce is a member of the training and development team at Berwin Leighton Paisner and also serves on the committee.

———————————————————————————————————————————————–

Coaching – Simmons & Simmons

Over the last five years coaching has become a key development tool across the firm. Our key learning on this journey has been:

• Embed coaching as a tool to support concrete projects or programmes: partners initially experienced coaching as a follow-up to development programmes – this supported them in transferring the programme learning back into the 'day job'.

• Get senior partners to champion coaching: by creating situations on programmes where there would be positive coaching experiences these groups have begun to articulate the benefit and readily recommend it to others.

• Focus coaching on key transition points: great coaching is especially valued by people at key promotion points: for new Managing Associates, partner promotions/lateral partner hires and when partners are appointed to leadership positions.

• Capture and share the business benefits: make the effort to stay in the loop in the coaching and capture the business impact of the coaching. This is persuasive data to those who are new to coaching.

• Be patient! It takes a long time to build a culture where coaching will be used regularly and the next steps are to develop our capability.

Nigel Spencer

———————————————————————————————————————————————–

Partner competencies – Denton Wilde Sapte

Many colleagues have found the introduction of partner competencies painful and the continued "tinkering" a terrific drain on resources and partner time. Our experience was different and this is what we did:

• Develop your own: it is vital they are developed for your own firm. Cutting and pasting someone else's will result in a poor fit with the firm and will inevitably be changed.

• Partners take the lead: once our partners were comfortable we consulted with the assistants who added behaviours the partners had not identified. Through this process we ended up with a comprehensive and robust set of competencies.

• Build a review process: Since their introduction over 5 years ago we have received requests for change and adapted them to make sure they still do what we need them to. Similarly we have said no to requests for "wordsmithing".

Dawn Bingham

———————————————————————————————————————————————–

Strategy, leadership and managing change – Hill Dickinson

IN 2008 we established the Hill Dickinson Business School and worked alongside a leading PSF specialist to develop an innovative senior-level intervention. The programme is designed to

• ensure that partners and senior managers are equipped to identify the strategic positioning of law firms;

• recognise the personal and organisation factors that shape a professional's approach to leading others;

• and grow long-term client relationships.

The programme has nine intensive learning sessions over eight months that combine workshops including case studies of professional services firms and skills sessions. Transfer of learning back to the workplace is key to the success of the programme and is achieved through action learning sets where participants plan, initiate and manage business aligned change within the firm and leave the programme with a practical agenda for action.

The course content, materials and structure are tailored to the firm's requirements and a major time commitment was and continues to be demanded from all partners attending the programme,

Linda Eisenberg