Strategic Challenges That New Firm Leaders Face
Updated: Aug 15
The recent announcement from Baker McKenzie that their global chairman would be taking a medical leave due to severe exhaustion took many by surprise. But Paul Rawlinson is far from alone, among firm leaders that I have worked with over the years, in having to contend with a position that has grown ever more demanding with challenges that are usually not fully recognized when first taking on the role. Most lawyers have NO idea what the huge scope of this job entails (ever seen a job description?), how much exhausting travel can be involved, how much time it really requires, how lonely it can be at the top, and how ill prepared many new firm leaders are when they assume office!
There are a number of common questions that I find are asked about leadership transitions and the challenges that new firm leaders often face and so I have identified those with my observations and experience with respect to each:
1 - What are the most common mistakes new firm leaders make when they take over?
We need first to acknowledge some possibly fundamental differences between the overall situations that pertain to a successful firm, versus what might be seen as a strategically complacent firm or a firm that confronts severe and immediate competitive challenges. Each situation may require putting the new leadership accent on a different syllable andwith an entirely different sense of urgency.
One of the more common mistakes is arriving on the scene believing that you already know what the issues are and that you already have the answers. If you take that approach, I can pretty much guarantee that you will not only discourage your partners and team of support professionals from sharing important information, but that your people will interpret the information you do get in ways that support your pre-existing views.
Secondly, you have to be careful how your relationships are perceived. If you are coming to the top leadership position after stints as a practice or industry group head, or if you reside in some particular or foreign office, you will likely be perceived as maintaining obvious loyalties to established friends. Once you are identified as being on one side of an issue, it becomes even more difficult to solicit disinterested perspectives.
Finally, one of the tough challenges is to acknowledge what you do not know. Identify those around you who are the experts in various important areas and do not be afraid to lean on them. News Flash: No one really expects an incoming leader to know everything.
2 - What are the biggest challenges all new firm leaders face and what are some of the ways to overcome them?
There are so many challenges. Most professionals really do dramatically underestimate the scope and responsibility of managing and leading an entire firm. One thing we should insist on is that the firm leader has a detailed job description. That description must get widely circulated throughout the firm so that everybody gets a true sense of what the job entails. Some time back when I compiled a rather thorough “activity analysis,” I identified no less that 50 bullet points relating to the responsibilities of any firm leader.
Few firm leaders understand that they will probably go through a transition defined by identifiable and typical emotional stages. The first stage is ‘anticipation’, or what one leader I worked with called the “peak of inflated expectations.” You have just learned about your new appointment or selection and you are excited, justifiably proud that you have been chosen, and you are busy making physical and mental to-do lists.
The traps that some firm leaders can fall into at this stage derive from not fully understanding the full scope of the responsibilities that they have just agreed to be responsible for. They fail to properly prepare, underestimate their own need to change, and may not begin the transition soon enough.
The most important stage, however, is the second one which I call ‘adjustment’, and which the firm leader I mentioned earlier, referred to as the “trough of disillusionment.” You have begun to serve as firm leader but the realities of the daily tasks do not align with your preconceptions of how things are supposed to operate. It begins to occur to you that this role is going to require developing some new capabilities.
As a new leader, you may be surprised to feel confused and indecisive just at the time you want to appear clear and strong-minded. You may feel overwhelmed and anxious just when you would much rather be seen as composed and dynamic. There are, as a result, a number of what we could call ‘leadership tensions’ – the more or less ongoing dynamics of the job that incumbents wrestle with, to handle the job of being a leader.
As you pass through this second stage, remember that your people are not interested in your title. They want to know if you care about them as individuals, if you care about helping them solve their problems and enhancing their career success.
Consider building and maintaining relationships as a critical part of your leadership role. Remember that leading is always done with others, not to them. Everyone wants a cheerleader – someone to believe in them, to help them have a can-do attitude. What can you do to let every partner know that you believe they can become even more of a success?
And always remember that as the leader, you are under a microscope. Your decisions, how you make them, the people you consult with, are all viewed very carefully. Likewise, everything you say and the signals you send will also be subject to scrutiny and conjecture. You will be inundated with phone calls and e-mails; with questions, requests, and advice.
You may need time to transform some relationships. Good leaders customize relationships with each individual on their radar screens.
3 - What makes transitions go wrong and how can mishaps be avoided?
A recent example of a new firm leader’s false start comes to mind when, on day one, he charged off determined to implement his personal vision of where the firm should be going.
Typically, any new firm leader is someone with a great reputation within the firm. It is anticipated that he/she will create momentum quickly and deliver the desired results. Expectations are high and the new leader does not want to disappoint, and will therefore mistakenly enter the fray with a given strategy in mind.
New leaders believe that their successful track records, combined with their mandate, guarantee the support of the partnership. They focus attention on the technical aspects of implementing their strategy, wrongly assuming that a critical mass of support is in place. The higher the expectations, the more they believe that everyone is behind them, and the more likely they are to assume that they are on the right track.
As a result, they act first and ask questions later. In the situation mentioned above, the rush to deliver results caused the new leader to neglect taking sufficient time to learn important information, and to gauge more carefully what I might call his partners’ “appetite for change.”
As a new leader, it is understandable that you will feel that you already have the information you need about how people think and feel. After all, you have been a partner in the firm for many years and may have even served on the executive committee or board or as an office head prior to accepting this mandate. But how much do you really know?
It is all too easy to step on people’s toes and, as a result, abort even the most promising firm leader’s agenda. New leaders must use the time before their actual transition to gain significant information that will refine and perhaps redefine their strategic agenda going forward. In most situations, the new leader’s initial concern should not be to hit the ground running, but to hit the ground listening.
The lesson? As early as possible as a leader, you must get input from your people on what they see as the preferable direction. Conduct one-to-one interview sessions with your partners (and other professionals in the firm), asking each one the same questions to get their insights, solicit their advice, and see what themes emerge.
Clarify what they want to see you ‘shake up’ and what they want to see you ‘preserve’. It is wise to have people see that you are genuinely engaged and willing to listen before you say the first word about where you think the firm needs to go.
4 - What is the outgoing firm leader’s responsibility during a transition? How can they ensure a smooth transition?
Outgoing firm leaders have at least five critical responsibilities.
First, one common delusion every departing leader may hold is that they are indispensable or at least that the firm will stumble without them. Every one of us who has ever held a leadership position may maintain some secret fantasy of one day announcing our plans to resign, and then leaving office amidst sorrowful tears, a standing ovation from partners and staff, and general consternation about the future, now that we are leaving.
Chances are, the firm will survive and even thrive without you. You should therefore compose a 30-second ‘elevator speech’ to tell people, in a positive way, why you are stepping down and to convey your excitement about your future and that of the firm.
Secondly, the leadership transition period is a good time finally to deal with annoying operational problems or troublesome personalities, so that the new leader can come in fresh and immediately begin to address some of the more important, strategic issues. Conferring with your successor and, with their agreement, confronting these often sensitive and sometimes messy situations now, is one of the best gifts you can give your replacement – a clean slate from which to work.
Thirdly, think about what information you would want if you yourself were now about to embark on this new leadership position. As the incumbent, you typically know more about the firm and its operating nuances than anyone else. Much of that information, or at least how to find it, is stored in your head. Think about how you might codify and share everything you wish you had known when you first took office.
Fourthly, to help ensure the success of the new leader, you should under no circumstances speak with anyone at the firm about his/her performance. Being perceived as negative or unsupportive only reflects poorly on you. You must also not allow anyone to say, ‘Well that’s NOT how we handled things when you were the boss!’ That is disloyalty, and you must take issue with it. It may be gracious of partners to acknowledge your good work, but your focus should be on supporting and cultivating the strengths of the new leader.
Finally, the best advice I can frankly give any leader leaving office is to simply let go.
Never mind all those lovely things they said about you at the resignation dinner. You are now a beloved part of history. The firm must learn to live without you, so the sooner you get out of the way, the sooner they can get down to business.
5 - What is the biggest surprise that new firm leaders face that they may not have thought about beforehand?
The biggest issue I hear about from new leaders is always the amount of time it takes to do the job right. Many of them are not quite full-time firm leaders, so they struggle with trying to maintain some balance between the time needed to manage the firm and the time required to maintain some modest personal practice.
Here is a tip: create a stop doing list. Take a look at your desk. If you are like most hard-charging leaders, you have got a well-articulated to-do list. We have all been told that leaders make things happen – and that is true. But it is also true that great leaders distinguish themselves by their unyielding discipline to stop doing anything and everything that does not fit.
Beyond this overriding time issue, there are subtler, more subjective perceptions and issues that catch new firm leaders by surprise. The best way to describe them is with a few direct quotes from men and women who have experienced the transition firsthand …
“I realised that fundamentally my relations with my partners would never be the same. Everyone has an agenda when they talk to you. As managing partner, you can never again just be one of the guys.”
“The sheer number of requests for meetings and for discussing issues, both petty and major…is absolutely staggering.”
“You realise that, if people ever begin to say, ‘This firm is no good’, it’s not the firm, it’s you. It suddenly becomes unbelievably personal.”
“You don’t know all of the answers when you assume this position and some of the answers you thought you knew, you soon discover aren’t really that workable in the real world. What worked for you or your predecessor in the past may not work tomorrow.”
“A surprise for me was that what you say is not always what the partners hear and that constant reinforcement of the message by word and deed is critical.”
“Notwithstanding all of the qualities I believe I have, I’m often feeling like a fish out of water. And yet how do I tell anyone what I’m going through? I need them to go on believing in me and trusting that I know what I’m doing.”
6 - What are the best action plans for new firm leaders from the moment they are named to the moment they take over? For the first 30 days on the job? For the first 100 days on the job?
Again, from the day you are first appointed through the first 100 days, the best practice is to listen and learn. Travel throughout your firm. Look for patterns in everything you see and hear. Spend as much time as possible asking questions, talking to people, and getting feedback and thoughts on what is right and wrong with the firm's operations. Do not be afraid to listen to people who disagree with you. Listen, actively, to those who challenge your assumptions.
Based on what you have been hearing, settle on a few major priorities. You cannot fix everything at once or do everything you want to do, so you need to make some strategic choices. Here is where you begin to align your firm around a shared direction for the future.
Make time during the initial 30 days to meet with clients. Balance the big picture vision with frontline views. There is no reconnaissance more important than client relationships. Do not be afraid to look for ideas in unusual places. Cast a wide net for insights. Sometimes, for example, the breakthrough idea lies in the successful experiences of other professions.
Within the first 100 days, you need to target a few early wins. Momentum counts and
nothing succeeds like success. Pick a problem your firm has not been able to address and
figure out a way to fix it quickly. That is how you enhance your reputation and ensure
perceptions of a successful transition.
Contrary to what some business literature suggests, real leaders do not worry about
legacies. They care instead about the long-term competitive vitality of their firms. If you are focused on fashioning a legacy, you will be remembered as ... the man/woman who was focused on fashioning a legacy!
7 - What are the specific challenges and concerns facing any new firm leader who is taking over from a founding partner?
The challenges and concerns are the same whether it is a founder or whether it is a longstanding incumbent who is revered throughout the firm. In either event, at issue here is whether the new managing was hand-picked by his/her predecessor; that is whether he/she is an heir apparent in a virtually ordained succession process. By contrast, the dynamics are very different if the new leader emerges as a result of careful internal deliberations and/or an election. In that case, patriarchy has given way to democracy.
When you are handed the keys to the kingdom by a successful incumbent who has groomed you for the job, there is a temptation to play your predecessor’s ‘mini-me’. In some ways, you will feel indebted to this firm leader who gave you the opportunity, and you will feel obliged to try to carry on in the same style. But that defeats he purpose of the succession. When people see a new leader who looks exactly like the old one, they may be lulled into thinking the old firm leader has simply been cloned, which, in turn, encourages a mindset that is less than receptive to innovation and independent initiatives.
Hand-picked leaders can also be reluctant to take the organization in a new direction because, after all, the existing approach worked. That too can be a mistake as it reinforces the old model which, even if effective in the past, sends the message that there is really only one way to get things done.
A leader hand-picked by a founder needs to be particularly aware of pent-up concerns that no one has previously been brave enough to express. A high-profile predecessor may have been so dominant that people in the organization have been chafing for more participation and involvement in the decision-making process.
Whether hand-picked or elected, you must honor the success and ideals of the person you are replacing. But it is important to communicate that you are still setting your own course, and to make it clear that you are up to the challenge. If the founder was revered, and if he/she personifies all the growth and success that the firm has enjoyed, the natural concern is that that energy should not dissipate. So rely on simple reassurances to the effect of, ‘While I have big shoes to fill, I am determined to fill them.’
Always remember that there a team that will have played a big role in the success of the departing leader. One of the biggest problems in any firm led by a high-profile managing partner is that too much credit for success is accorded the charismatic individual, and the broader resources of the firm that facilitated the success may go overlooked.
8 - Are there any lessons that can be learned by comparing the new firm leader’s experience in their first months to that experienced by other executives, either in business or government? I often tease new firm leaders by asking them what they could possibly have been thinking when they took on such responsibility. For all the burdens they are willing to shoulder, their willingness to do so is often disparaged. Many partners see management as pure overhead, as drudgery that does not really reflect the legal professionalism that defines a lawyer, and does not generate revenue in the way that actually practicing law does.
Then we have partners at law firms who all too often bristle at any suggestion that they can or ought to be led. After all, we are all told that every real leader is someone who has followers. Right? So quick show of hands, how many of you aspire to be a follower? The truth is in the legal profession that we all see ourselves as being leaders . . . in some way.
Meanwhile, firm leaders feel they are making sacrifices for the betterment of the firm and should be appropriately appreciated; while the partners think of you as serving at their pleasure. – they are allowing you to hold the leadership title, so you should be beholden to them!
Such dynamics should convince us that the playbook for new leaders of professional services firms is fundamentally different from the guidance that new corporate CEOs may get. There is a huge difference between operating in an environment where you say jump and people actually jump, then what happens in our world. In our world, if you dare say jump, your partner will jump all right – right into the arms of some waiting competitor.
About the Author Patrick J. McKenna is an internationally recognized author, lecturer, strategist and seasoned advisor to the leaders of premier law firms.
He is widely credited with being one of the profession's foremost authorities on practice leadership and the author or co-author of nine books including international business bestseller First Among Equals: How To Manage A Group of Professionals with David Maister (Free Press) and most recently his new eBook, Leadership Lessons From The Trenches.
He co-leads First 100 Days: MasterClass For The New Firm Leader – with the next session scheduled for November 29, 2018.