Finishing the job at DLA - what Tony did next
"Angel's appointment appears a significant milestone for the legal industry in terms of modern management and will test whether this kind of appointment can work in law firm land" - Alex Novarese on what Tony Angel will bring to the table at DLA...
October 28, 2011 at 07:13 AM
10 minute read
It's not every day you see a deal that brings arguably the two most celebrated law firm leaders of the 2000s under one roof. But that is just what the never-dull DLA Piper has done by drafting in Linklaters' former managing partner Tony Angel to join the firm as global co-chairman and senior partner of its business outside the US, to work alongside the equally high-profile Nigel Knowles.
From very different platforms, and with very different styles, Angel and Knowles probably did more than any other figure to sell the concept of law firm leader as a good thing, rather than a bore or necessary evil. It wasn't that long ago that the (mostly) men running law firms would boast about how it wasn't a full-time job and that they still did plenty of client work. You very rarely hear that refrain any more, even from US law firms.
It also barely needs saying that it's almost unheard of for the former leader of one major law firm to be brought in externally to help run another. Obviously, it's common in public companies, but the logic goes that partnerships and professional services firms need to be run by those that have built up years of cultural capital in order to get anyone to listen to a word they say.
As such, Angel's recruitment appears to be a significant milestone for the legal industry in terms of adopting modern management and will test whether this kind of appointment can work in law firm land.
So what kind of a record does Angel bring to DLA's table? First, let's address the reverses. Judged on the 'Clear Blue Water' vision that Angel articulated, Linklaters failed. The firm didn't – despite a period of explosive growth in the mid-2000s – pull ahead of Freshfields or other peers. The idea of a practice with big four scale but the self-reinforcing profitability of a Wachtell Lipton was not achieved. But that was always a staggeringly ambitious goal to aim for, so it's very hard to gripe when, by any rational yardstick, Linklaters performed very well during Angel's near-decade at the helm.
The biggest problems during his leadership were linked to the firm's painful attempts to expand in Europe – many admirers of the firm would see Linklaters & Alliance and the three mergers it spawned as a misfire, plain and simple. But that was a long time ago and the Alliance strategy wasn't particularly identified with Angel.
What Angel did embody was a rigour about process. He worked hard to improve Linklaters' client relationship programmes and performance management and his primary tool to this end was, of course, metrics. Angel embodied the data-based manager, using scary-sounding benchmarks like 'gross margin per partner standard hour' and detailed tracking of the amount of international work Linklaters was handling as a guide to help reshape the business. (The view being that the number of international offices working on a single matter is an accurate proxy for quality of work – there will be a huge drive to improve this at DLA). He was right, and his strategy proved hugely successful at internationalising Linklaters' business.
His other legacy was to have killed off the residing cosiness of the magic circle. He ushered in a new discipline and made it easier for Linklaters' City peers to take some tough decisions. Ironically, the axe-man tag was overstated. Angel certainly took some unpleasant decisions but he was far more conflicted and uncomfortable with that aspect of the brief than is generally portrayed. I wonder if the radical restructuring the firm embarked on in 2009 would have happened under Angel.
If that's the background – how will that experience apply to DLA Piper? You can see the logic. Angel will be part of a four-strong leadership team including Knowles and the US-based co-chair Francis Burch and co-chief executive Lee Miller. This team will be seeking to do a number of things with the firm. Much of this will be about finishing the job Knowles started in the mid-1990s and which – despite the dual US merger with Piper Rudnick and Gray Cary Ware & Freidenrich in 2005 – there has been slow progress on of late.
The global co-chairman role Angel will hold with Burch will be primarily about integrating a practice rapidly built by a stream of mergers. That will mean improving firmwide systems, processes, practice integration and, yes, ultimately financial integration.
DLA Piper has clumsily danced around this for years, but more honest voices internally concede that a governance and remuneration structure that is too close to being two businesses parked together under one brand is a stage the firm must move past, not keep trying to justify. The Hogan Lovells comparison doesn't hold – that firm is already far more integrated than DLA Piper despite securing its verein-backed merger five years later. (One element behind the looming restructuring of DLA Piper's international partnership, which will move it to the all-equity model currently used by its US counterpart, is that it will support closer union.) So assuming it's clear that a core part of Angel's brief will be to materially improve firmwide integration, on this count DLA couldn't have secured a better CV.
The other major part of the role will be to help take DLA – for want of a better word – upmarket. That won't mean trying to compete with his old firm – DLA Piper has a different model – but it will mean raising the firm's profile in the key financial centres of New York, London and Hong Kong. DLA's New York presence is regarded to have made considerable progress in recent years. London, in contrast, is coming from a period in which it has lacked momentum.
There is also an expectation – not an unreasonable one – that the appointment of Angel will help the firm secure some top-quality lateral hires to help achieve this aim. The ultimate goal is to forge a genuine global leader that will offer a broad suite of legal services to many of the world's leading companies. It's a logical and achievable goal, though DLA shouldn't kid itself that it's anywhere near that position yet.
Questions remain about how Angel and Knowles will work together. My initial guess that Angel's recruitment was directly driven by Knowles – they have known each other and got on well for years – was wide of the mark. Instead there is a wider push to broaden the management team rather than leave the non-US business so reliant on Knowles.
The belief is that Knowles will stand – and win – another three-year run as managing partner and joint chief executive when his term ends this December. However, until quite recently that didn't look like a foregone conclusion. Knowles' record in transforming a collection of English regional practices into an international brand speaks for itself. But his personal stock took a hit after the damaging fallout from the firm's Middle East operations, which lost the firm millions when Dubai's economy tanked after 2008.
With the firm moving past that difficult period there is a feeling that Knowles has another term in him, but there is also a need to have a stronger figure to counter-balance him in a term that will, by its end, have seen one man run the firm for nearly two decades.
That's probably a healthy development. Knowles' reputation was founded on the combination of vision and ambition with a common touch that kept him unpretentious, self-critical and grounded. Believe me, these were not qualities in abundant supply in City law a decade ago, and the legal industry was poorer for it. The ability to shift from imaginative, big-picture thinking one minute to telling risque jokes with the troops the next is a valuable skill for managing partners, as it makes it so much easier to get your partners to swallow the corporate speak the job demands. They should offer a course in banter at Harvard Business School.
But perhaps inevitably given his huge success, Knowles' instincts looked to have been a little less finely attuned in recent years. It's hard to have a keen feel for the shop floor when you're a globe-trotting chief executive with a knighthood in the bag. The trademark drive and energy remained, but the self-styled outsider was getting a bit 'establishment'. A 2009 redundancy programme in the UK was badly handled in a way I wouldn't have expected from the pre-Piper Knowles. The firm's once-high staff morale took a thumping and has not entirely recovered yet.
It's very hard for a managing partner to avoid isolation from the partnerships they lead, even if – and sometimes because – they are successful. The nature of partnership is that the cats eventually resent you for herding them, even if you take them where they need to go. You could easily apply Powell's comment about all political careers ending in failure to managing partners. Angel's own career at Linklaters is a reminder of this tension – there remains a distinct ambivalence about the corporatisation of Linklaters that he drove through, even while the firm builds on his model.
So the hope is Angel's appointment will prove a masterstroke, once again galvanising the firm and bringing in a leader whose profile and reputation exceeds even that of Knowles. It doesn't solve DLA Piper's succession issues – Angel being the older man – but it widens the executive talent pool and provides a highly credible bridge between the US and international businesses.
Of course, the big unknown is whether you can graft one law firm leader onto a totally different institution with very different experiences and culture. Extrapolating from Silk Street won't be simple. No matter how far DLA Piper has come over the last 15 years – which is very far indeed – it's not in the same league as the City giant Angel used to run.
And while you can make a reasonable judgement about the credit Angel deserves for Linklaters' success, you can't forget that in corporate law, brand and quality of client base go a long, long way. Playing a leadership role in what remains in international terms a hungry challenger will be a very different test to pushing through organisational change at professional services royalty like Linklaters.
Still, I suspect in this case such challenges will be manageable. For one, Angel has been out of Linklaters for over three years and has had experience of managing two non-legal businesses, not to mention acting as a non-executive at SJ Berwin over the last six months. That should substantially cushion the culture shock on both sides.
Good chemistry between Angel and Knowles should also help the pair operate as a team. And working alongside an established leader is very different to having to take over the sole chief executive role from the outside, which probably would be a step too far for a law firm – even this law firm.
So in essence the move represents a sizeable gamble, but I've seen a lot worse over the years. The huge potential upside must be worth the risk.
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