New tech, non-lawyer partners and global growth on CC agenda as Layton eyes 'radical' change
Newly reelected magic circle chief targets US and Asia acceleration in second term
January 22, 2018 at 08:14 AM
6 minute read
One new strategic plan, a governance shift and two lockstep overhauls later, it's fair to say that Clifford Chance (CC) managing partner Matthew Layton has kept busy during his first four years in the role.
Weeks after being reappointed to a second four-year term, he has no intention of slowing down, as he pushes ahead with plans to future-proof the firm that could involve everything from the introduction of non-lawyer partners to branching out into service offerings in conjunction with third parties.
"When I came in four years ago, I was focusing on ensuring that we were building a firm platform for the future," he says. "I made changes around the governance structure to be more dynamic, we obviously changed our comp structure to make sure we're better aligned with the global market, and I also started to put the building blocks in place around innovation and change. We started to empower the operational side of the business to be at the heart of our client strategy – in many instances it's now client-facing.
"My focus now is around global client expectations about the way legal services are going to be delivered in future. Part of that is ensuring we have the strength and depth right around the world, as well as looking at our people, the services we offer and the way we offer them."
Layton acknowledges that his focus on being global is going to require significant investment outside Europe, with ambitious plans to grow the proportion of firmwide revenues generated in the US and Asia.
In the US, it is likely to equate to lawyer headcount growth of more than 20% during the next three to five years, while the share of revenue generated across the Atlantic is anticipated to rise from roughly 14% at present to 20%-25% of global turnover.
He wants to see a similar proportion of revenue generated in the Asia-Pacific region, which currently brings in about 18% of global turnover, which stood at £1.386bn in 2016-17.
"We've been consistently growing in the US over the last few years, but we need to continue to do so," he says. "We're now close to 300 lawyers, and I want to accelerate that pace of lateral and organic growth. In the medium term, we'd like to see the balance of the US business growing to 20%-25% of firmwide revenue with, say, lawyer numbers growing to 400 in the same timeframe.
There are still growth opportunities in London and continental Europe – it's just that other areas are growing faster
"I'd also expect to see continued growth in Asia-Pacific – we're looking for revenue there climbing from 18% to closer to 25% over the same period. These are not targets, but our clear direction of travel."
While Layton is at pains to stress that London and continental Europe will not shrink, the upshot of predicted growth elsewhere is that their overall share of total revenue will fall over time.
"There are still growth opportunities in London and continental Europe – it's just that the other areas are growing faster," he comments.
But it isn't just CC's international make-up that will shift over time.
The way the firm runs its 2,750-strong business services function came into the spotlight during Layton's first term, when he brought in a new COO and appointed a partner in charge of innovation and business change – and Layton now wants to go further.
He says: "We'll see a continued shift in the mix of talent we have within the firm, including more integration with the operational side. We're already seeing more project and transaction management and coding skills. Obviously, part of this shift is about being able to continue to access and develop the deepest talent pool across all areas."
We need to create alternative career paths that are attractive for different individuals
Hiring in different skillsets to meet current requirements is only the beginning, with Layton acknowledging that retention and development are going to require different career paths – a reality that could pave the way for CC partners coming in from business services backgrounds rather than law.
"We need to create alternative career paths that are attractive for different individuals," says Layton. "It's clear that the traditional pyramid approach needs to be challenged and will be challenged because of the differing skillsets and aspirations. We're working on some different career paths and I expect that ultimately part of that will include non-lawyer partners."
CC is already using alternative resourcing models like working with alumni and people who have taken career breaks, as it grapples with balancing a desire among staff for more flexible working models with the need to control costs.
It is also looking at collaborating with third-party organisations in a move that could change the services it offers clients.
"It will lead to radical changes in terms of how we operate over time," he says, adding: "Technology ties in with all of this. It is going to change the way we deliver services to clients to meet their needs, as well as enabling us to win new clients through new services. We see the collaborative model we've already demonstrated with CCDr@ft stretching into other areas, which could mean working with alternative legal service providers and consultants."
As part of these plans, Layton is working with head of people and talent, Laura King, on a global leadership development programme that will tie in with his desire to see the firm's recruitment needs drawn up around the roles it needs to fill globally, rather than on a country-by-country basis.
While the programme is still being drawn up, Layton hopes it will help boost all aspects of diversity. He says it will answer the question of "how we develop a really effective programme globally to bring through effective leaders from diverse groups within the partnership and across all parts of the business".
"I don't think any of these changes will be like a big bang, though – they will be incremental. Like any mature business, there's a natural metabolic rate of change and one of my ambitions is to increase that rate, without putting too much stress on the system.
"My ambition is to ensure that at the end of my term I've put in place the building blocks so that the firm is in a strong position to thrive beyond that."
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