What doesn't kill you... how much medicine can Linklaters take?
"Linklaters has been through five overhauls in a decade – four of them in the last five years. This level of upheaval contradicts the received wisdom about how aggressively you can manage a major law firm before things start falling off the wagon..."
January 19, 2012 at 07:03 PM
3 minute read
Right, to Linklaters. So unusual is the City giant's decision to push itself through another partnership restructuring only three years after its last wide-ranging shake-up, that we've let some time pass before taking a view on it. But even with that time and the chance to discuss it with numerous people in and outside the firm, it still seems a startling move and one without precedent among modern law firm management at this level of the game.
While Linklaters under Tony Angel was famed (some would say infamous) for proactive management, since his successor Simon Davies was appointed the firm has been through a period of radical change. Aside from the 2009 restructuring, the firm had already reviewed and shut the majority of its Central & Eastern European network and pushed through a major shake up of its troublesome German practice.
Throw in the pruning under Angel, and Linklaters has been through five overhauls within a decade – four of them in the last five years. This level of upheaval contradicts the received wisdom about how aggressively you can manage a major law firm before things start falling off the wagon.
On one level, this is impressive. While highly competitive, commercial law firms are largely pack animals that tend to group together with a strategic caution that can border on parody, Linklaters' willingness to take proactive steps to shape itself for what it believes a leading global law firm should look like in five years' time is certainly audacious. Yet it still raises awkward issues for Linklaters.
Given how actively managed the firm has been for years, there has to be some question over why Linklaters needs to keep prodding its business to this degree. Some would see it as the inevitable and unloved legacy of its former European alliance and mergers – and there's something to that view. It would also appear that the previous drive to slim its salaried partner ranks flew in the face of market realities, given that it was a goal conceived in a vastly different environment.
But on a broader level, a neutral observer would surely conclude that one of the world's best law firms has underlying maladies that it is still struggles to treat. At the least, it's hard to see how there can not be a problem with quality control at partner level if the firm finds it necessary to perform surgery on its business with such frequency. Neither is this a recent phenomenon – Linklaters often looked uncomfortable in its skin under Angel, it's just that surging growth under his second term masked such tensions.
Ultimately, there is a limit to how far a major institution can tolerate periods of sustained stress without damaging consequences, and even then there has to be a clearly-defined gain to make the pain worthwhile. I'd advise Linklaters to do what it needs to do very quickly and then draw a line.
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