All aboard – lawyers are still facing an uphill struggle to gain board positions
According to Oonagh Harpur, a non-executive director at HM Treasury Solicitors, the reason so few UK lawyers are found on boards goes back to the 1990s when most English law firms decided they didn't want to risk conflicts of interest by having partners serving as non-execs on the boards of their clients.
April 10, 2014 at 07:03 PM
8 minute read
Despite experience advising some of the biggest global corporates, lawyers are still fighting the perception they are uncommercial and often struggle to gain places on boards. Anna Reynolds investigates whether there is any justification for this reticence
According to Oonagh Harpur, a non-executive director at HM Treasury Solicitors, the reason so few UK lawyers are found on boards goes back to the 1990s when most English law firms decided they didn't want to risk conflicts of interest by having partners serving as non-execs on the boards of their clients.
Even as a non-lawyer, Harpur's nine-year stint at Linklaters – during which she acted as the firm's director of corporate responsibility – didn't work in her favour. "I remember one chairman telling me that my career at Linklaters made me less attractive. People think lawyers aren't commercial enough," she says.
Bill Knight, former senior partner of Simmons & Simmons and one of the founders of BCKR – a body set up to help lawyers take up boardroom roles – explains: "Lawyers are tagged with being willing to debate but not willing to agree. The perception is that we are risk-averse and like to cover ourselves – a director needs to be able to make a decision quickly." He adds that because lawyers are trained to be discrete they tend not to speak up about issues relating to their industry, unlike accountants and other professionals, who are often more vocal. As a result, "big commercial organisations never think of lawyers in the first place – we don't cross their radar".
While this continues to be the case, recent research shows there has been a rise over the last decade in the number of CEOs at top US and UK corporates who have either studied law or gone on to qualify as a practitioner. Between 2002 and 2012, the number rose from three to seven in the FTSE 100, and from 10 to 17 among the Fortune 100, according to a report by Reed Smith and KPMG. Typically lawyers seem to face less of an uphill battle to be perceived as corporate-minded in the US.
According to the research, the main factors contributing to the rise include growing regulatory demands and the increasing importance of understanding and managing risk, as well as the trend for MBA-style business learning to be incorporated into legal training.
Knight is also beginning to see progress in the UK. Since BCKR was set up in 2012 it has received increasing interest from the not-for-profit sector, theatre companies and accountancy firms, which are keen for lawyer representation on their boards.
"By dealing with smaller companies to start with, we are having success," he explains. "We have come through a huge upheaval and people are now appreciating the virtues of risk awareness, which will work in our favour for changing the system."
Gaining experience
Guy Beringer, former senior partner at Allen & Overy (A&O) and current non-executive chairman of the management board at UK Export Finance, says building up a portfolio of smaller voluntary and public sector board appointments while still practising the law is crucial.
Although law firms have not encouraged this in the past, Beringer believes this is changing. "Firms may want their partners to be fully committed to fee earning, but it is in their long-term interest for them to go on to non-executive roles and they should allow time for this," he says. "It builds a bigger platform for the firm and provides a new set of networks and potential clients."
Beringer picked up a couple of positions before finishing his career at A&O. As well as sitting on the board of wealth manager Fleming Family & Partners, he chairs the Legal Education Foundation and co-chairs the appeal board at the Bingham Centre, a body dedicated to the promotion of law worldwide. While some lawyers rely on their clients for help securing board roles, "clients are not always in a position to help you directly", he says. "You have got to prove you can work in a different environment – with a track record you are much more credible."
Firms are demonstrably beginning to embrace this; in 2010 Ashurst launched the 'Life Outside Ashurst' programme, prompting partners to consider what non-executive directorship roles they could take on, as well as planning for life after they leave the firm. The course covers a variety of topics such as the difference between a trusted adviser and a board member, how to identify opportunities and preparing CVs.
Meanwhile, Linklaters runs sessions for partners with a London business school for aspiring non-executive directors (NEDs) and participates in the FTSE 100 Cross-Company Mentoring Executive Programme, which focuses on providing mentoring for female partners led by chairmen of the FTSE 100.
Freshfields offers one-to-one coaching to partners who are retiring, which includes CV preparation and pitching for NED roles.
The firms have their work cut out for them though as, according to Elizabeth Holden, formerly a corporate partner at Slaughter and May and now on the management board of Great Portland Estates, a FTSE 250 property developer in London: "Being a lawyer is potentially a greater obstacle to getting on a board than being a woman."
New thinking
Commenting on the Reed Smith-KPMG report, Holden describes the increase as "incredibly small" and says it is the result of FTSE 250 companies moving up the ladder and into the FTSE 100. She believes lawyers need to change their mindset when applying for NED roles. "You can't sell yourself through your former deal list – you have to refer to other skills," she says. "Some lawyers who have had success in the City will assume they can get roles early on, but you have to be prepared to start from the bottom."
Holden stresses the importance of personal networking and using business meetings as an opportunity to increase your individual profile. When board decisions are made Holden says that, while it is not necessary to be aligned with the chairman, good contacts with other people on boards will help as a reference point for the nomination committee, which will be dealing with a large number of applicants. Another hurdle to overcome is how to present yourself to fit the criteria of a NED. "Your CV needs to be completely different, written as though you weren't a lawyer," she explains.
It is easy to see why a NED role is appealing – not only does it enable you to be involved in several organisations at the same time, but, as Holden explains, it gives you a real understanding of how a business works and a chance to influence how it is managed. The Reed Smith-KPMG report suggests that legal education should provide an increased focus on general business, to create "more rounded business-savvy lawyers, and should also offer alternative career choices to those with general business aspirations".
Beringer argues that many lawyers already experience this on a daily basis. "The perception that lawyers aren't experienced in running businesses is nonsense," he says. "Law is one of the most successful sectors in London and in the UK it has maintained market leadership. Law firms should be seen as businesses."
Despite this, Harpur adds: "Someone who hasn't headed up a substantial part of a law firm business will struggle, unless they have specialist knowledge of a particular sector – such as property – where a lawyer's knowledge has strategic value at board level."
Harnessing skills
If lawyers can get past the barriers facing them, Beringer says the skills they can offer are invaluable: "Recruiting, training and mentoring, as well as analytical skills and the ability to question forensically, are all key in a boardroom." Knight adds that, as well as being trusted, there is less chance of a conflict with a lawyer on a board and they are capable of dealing with a lot of detail and paperwork quickly. In addition, charities and not-for-profit organisations are particularly keen to appoint lawyers as they can identify good value for money.
Overall the advice seems to be to start early and start small. As always, networking and building up the right contacts helps but, more importantly, if you can present yourself in the right way there is no reason why the 'lawyer' stereotype can't be overturned. Harpur is optimistic: "Companies will realise that they can benefit from the insight lawyers have into leading such businesses."
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