Less Politics, Clear Rewards
Posted By Rob Millard - 0 Comments -
How do professional firms select their leaders?
A study undertaken by the Managing Partners Forum (MPF) earlier this year confirms that the way that law and accounting firms approach selection of leaders and succession planning is somewhat different to other organizations. The findings may well be true in many other professions, too. Yet effective leadership is critical to the success of a modern professional firm. The MPF study examined practices at a sample of 43 of the UK's top 100 law firms and top 50 accounting firms and aimed to "shed light on the degree of consistency at each stage of the selection process for managing partners (MP,) senior partners (SP,) and heads of business units (BU.)"
The results of the study are well summarized in an article titled Less Politics, Clear Rewards by Nigel Knowles (joint CEO of DLA Piper and chairman of the MPF) and David Pester (MP of TLT Solicitors.) The article was published in the June 2006 edition of Legal Business.
The 'bottom line'
1. MPs, SPs and BUs were all seen to require different personality types. Previous experience was seen as less important. Strategic thinking apparently did not crack a direct mention from any of the respondents as a key attribute of a leader in their firms.
2. Most firms did not have anything like the 'fast-track' leadership programmes that many other kinds of organizations have for high potential individuals. In fact, only 25% of the firms said that they always have formal succession plans in place for MPs, and fewer said the same for SPs and BU leaders. Adding those that said that they usually did still left about half that said that they only sometimes, rarely or never had formal succession plans for these roles. In most cases, where management or leadership training was made available, all partners irrespective of suitability were put through the programme. This is clearly wasteful.
3. In most cases, leaders are elected by the partners from amongst their number. However, the pressure for collegiality and suppression of dissent is so strong that contests are often uncontested because firms ensure that one name is put forward. The study notes that leadership ability is sometimes less important in choosing which name, that intra-firm politics and worse.
4. Management is not seen as something worthy of special reward in the respondent firms' compensation systems. The dictum that "one can never pay too much for a good CEO, or too little for a bad CEO" clearly is not one that resonates here. 60% of respondents said that there was never a compensation premium for management roles exercised by the managing partner in their firms, and only 20% said that there always was. SUs and BU leaders were even worse off.
Knowles and Pester's article concludes:
"Succession planning has traditionally never been a strong suit for partnerships. There is nothing more likely to knock an otherwise clear-thinking group of partners off course than the prospect of choosing a new leader.
Be well prepared: get everyone signed up to a transparent process; understand what you want the leader to do; be sure of the skills you are looking for; develop candidates early in their careers; root out political barriers; and make sure that leadership skills are valued by everyone in the firm."
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