Byline article by: Rob Lees and Henry Marsden
Leaders of professional services firms have managed the unprecedented Covid crisis well, but the time for “managing” is over as we move to the next phase of the pandemic. Leaders need to step up and lead to ensure firms emerge strongly and on the right track for the future, however today’s economic turmoil highlights a lack of investment in a critical skill – the ability of partners to generate and execute successful strategies.
The leaders of global professional services firms are currently facing challenges that are taxing their capabilities to the full. From the likely repercussions associated with the decisions around law firm ownership and working practices in various US states, through worries about the impact of the expected economic downturn on fee income and profitability, keeping the right partners and helping others out of the firm, all aspects of associate development given the impact of home working on their interactions (or lack of) with the firm’s partners and clients. With the imminent arrival of a vaccine, there is also the question of the when and how to return to office-based working. And, that’s just to start.
In the face of these challenges, one would hope that firms had invested in effective leadership development so that their leaders (and we include all partners in our view of who leads firms, not just the people occupying MP/CEO positions and their fellow board members) had the capability to deal effectively with these challenges. While some challenges are unique to the pandemic, many are not or are derivative of situations firms have faced in the past.
Unfortunately, effective investment in leadership development doesn’t seem to have been the case. A recent study of leadership development in US firms, as well as several articles in American Lawyer and on LAW.COM, and preliminary results from professional services consultancy PSFI’s Partner Development Report tell a sorry story of leadership being downplayed with a greater emphasis being given to sales development or profitability enhancement. Similarly, we are seeing leadership development being squashed into short virtual sessions over lunch. These sessions may be good for delivering frameworks but with little of the necessary dialogue make little long term impact on behaviour or the confidence of partners to meet leadership dilemmas.
Our experience of working in and with law firms around the world for the last 30 years mirrors these findings. Critically, this lack of leadership capability is also borne out by the 10,200 responses that have been generated over the years from the 360 instrument Rob and his co-authors developed from the leadership model in When Professionals Have To Lead. We have been using the 360 over the last 11 years to help partners obtain feedback on their capability to set direction (put together a winning strategy given the markets the firm is operating in), generate commitment to the strategy, and put in place the activities necessary to ensure the strategy is executed effectively.
An analysis of the 67 items in the survey revealed that the 10 highest ratings were, unsurprisingly, associated with client service. However, the 10 lowest-rated items shown below relate to several key leadership qualities associated with establishing and executing strategy:
- Develops and sets a clear strategy
- Sets targets and measures linked to achieving the strategy
- Persistent in communicating the strategy
- Picks the right team for the job
- Sets clear and stretching goals for the team
- Regularly reviews team performance against measures and goals
- Avoids last minute crises
- Adapts approach to the individual
- Deals constructively with other people’s uncertainty
- Helps people learn when things haven’t worked out
This list should be of major concern to the partners in professional firms. The sample size is statistically robust and the story damning – but not a surprise. As we said earlier, leadership development has, in the majority of firms, taken second place to efforts to improve partners’ business development capability and fee arrangements. We have no argument with that stance; our concern is that leadership has been so downplayed, or ignored totally, that it is no surprise that firms struggle both strategically and operationally.
In addition to years of underinvestment, many firms are cutting leadership training budgets even further in this pandemic, which is not only a mistake for the long term for the next generation of leaders, but also short-sighted in the here and now when effective leaders are needed more than ever to create and execute an effective strategies to deal with the many challenges the firms face both today and will in the future.
We believe that to respond to these challenges firms must invest in enhancing their partners’ leadership capability. And, we have no doubt that the firms who do that better than their competitors will be the ones who end up on top.
This article first appeared on Legal Week on 26 November 2020.
Rob Lees is a co-author of the best-selling When Professionals Have to Lead. He is a former global consultant advising professional services firms on improving individual, team, and firm capability.
Dr Henry Marsden is the Managing Partner of leading professional services consultancy PSFI. He works closely with leaders of law, accounting, consulting and investment banks on development initiatives that improve performance in challenging markets.
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