Tips from the experts:
Give enough notice. You need time to build consensus around a new leader and to orient that leader to the post, consultants say. Robert Dell, Latham’s outgoing managing partner, gave his firm 13 months’ notice that he would be stepping down. Contrast that with Reed Smith. Last October, Gregory Jordan, the firm’s 13-year global managing partner, announced that he was leaving the next month to become general counsel at a client company (PNC Financial Services Group).
Michael Pollack, Reed Smith’s chief legal officer, says that despite Jordan’s sudden departure, the firm was prepared: its executive committee periodically reviews potential candidates, and Alexander “Sandy” Thomas, the firm’s litigation department chair, was selected from its short list.
Still, he had little opportunity to wind down his personal practice or to learn the new role. “If Reed Smith were a company and you were an investor, would the sudden flight of the CEO be a ‘buy’ signal to you or a ‘sell’ signal?” asks Patrick McKenna, a longtime succession consultant and coach to new firm leaders.
Others agree. The long lead time (three years) Ralph Baxter gave Orrick “allowed us to be thoughtful about both our direction and governance, and we think we’re stronger for it,” says new chair Mitchell Zuklie.
Define your firm’s strategy. “Get clarity around strategy direction and have your management committee aligned around it in advance of a succession process,” says Julie Wolf, of RHR International. She adds that firms often avoid that important work because it’s hard and may alienate some factions. She also suggests asking partners, “What do you need the leader to do in the next three to five years?”
When Orrick’s executive committee learned that Baxter would be stepping down, the firm merged an ongoing strategic review with the succession process. The result was a committee recommendation that the firm focus on just three sectors (energy, finance and tech) and grow within existing offices rather than expand elsewhere. And new roles were created within an expanded governance structure.
Only then did the committee solicit nominations, selecting four finalists. Ultimately, Zuklie, 43, head of the corporate practice, was chosen by the nominating committee. The governance changes have expanded the pool of leadership talent, Zuklie says. Two finalists, litigation head Walter Brown and finance partner Alan Benjamin, were installed in new positions, Brown heading up five newly defined business units and Benjamin appointed managing director of finance. The third, mass torts partner James Stengel, was made “lead director,” a new board-level position designed to ensure partner input and oversight on management decisions. None have subsequently left the firm.
Create a job description. And write an ideal profile of the future leader before you consider candidates, experts suggest. “If you do, it becomes less of a beauty contest, and more of ‘Joe is the best person to take on this role,’” Wolf says. Yet fewer than one in four Am Law 200 firms do so, according to leadership consultant Patrick McKenna.
There’s no best way to create a profile. At Perkins Coie, longtime leader Robert Giles made a “book” describing his duties. At Latham, Dell described his job on camera, which was posted to the firm’s intranet.
The job description and profile will vary firm to firm, says McKenna. Partners at a stagnating firm, he notes, may seek an innovative leader to revitalize and reposition the firm, while those at an unsettled firm, such as one that’s just been through a merger, may prefer a leader to focus on integration and stability.
Having an outside consultant assist in the process can help defuse potential problems down the line. O’Melveny & Myers, for example, tapped RHR in 2011 after a succession battle in 2008 resulted in the departure of a rainmaking partner. A year before A.B. Culvahouse Jr. was set to retire from the chair position, RHR interviewed partners, using the interviews to create a profile of the ideal chair. A formal job description was also drawn up. Ultimately, the policy committee chose three finalists in July 2011; vetting included a four-hour “leadership assessment” by RHR and interviews with the policy committee for each; partners were also interviewed confidentially about the three by RHR’s team.
The committee ultimately chose Brad Butwin for ratification by partners; his rivals remain at the firm. “Disappointment is much easier to take when you think the process is fair,” says Carla Christofferson, a policy committee member. “That is one of the advantages of using an outside consultant. It wasn’t not choosing someone, it was matching someone with a profile.”
In most cases, being an effective communicator and a consensus builder will be high on the list of leadership requirements. “Eighty percent of the job is interpersonal skills,” says the law firm consultant Bradford Hildebrandt. With professional staff handling finances, human resources and IT, what’s important is client engagement and community involvement; “the CEO of a company doesn’t go down and see how cars are made. He may talk to people on the shop floor.”
Say goodbye. Once a new leader is chosen, make the transition short and sweet. Experts say that six months is about right. “The longer the outgoing leader stays on, the tougher it is for the new chair to set his or her own pace,” says Hildebrandt.
After a leader steps down, he or she shouldn’t remain on the core management team, most consultants say. For longtime leaders, departing the firm may be the best way to avoid awkwardness. “I think that new person deserves a lot of space,” Dell says. “It’s best for me to retire and to let that person create his own successes.”