End of an era?
Peter Cornell’s decision not to stand for re-election
as global head of Clifford Chance certainly feels that way,
although as we’ve argued
before, his timing is impeccable.
Now comes an interview with The
Lawyer in which Cornell reprises his five-year tenure
and concludes with some words of advice for his (unchosen)
successor. As regular readers know, I subscribe to
the theory that individuals forge events, not that events
forge individuals, so it’s worth pausing to reflect along
with Peter at the transformations he’s wrought at Clifford
Chance. (Full
disclosure: I’ve
met Peter in person and have the utmost respect for him both
as a managing partner and as a human being.)
First, let’s review the bidding: When Cornell
took the helm at Clifford Chance in 2001, the firm was, to
say the least, fractious and divided. The
recent merger with (acquisiton of) New York’s Rogers & Wells
left the firm over-indexing on its share of nettlesome
and truculent personalities, and the disconnect between Rogers
& Wells legacy eat-what-you-kill compensation system and Clifford
Chance’s UK-heritage lockstep was to prove an expensive, irksome,
and distracting mess until pretty much this past year.
Add to that simmering turmoil Clifford Chance’s
triumphant-at-the-time swoop in 2002 to gather up many of the
people left on the street in Northern California when Brobeck
imploded—a classic case of buying in at the top—and
Cornell’s hands were full. Nor should we forget the
revolt of the Italian partners in 2002, or the infamous leaked
memo from associates about the pressure to produce billable
hours. That episode, perhaps more than any other, encapsulates
the pressures on Cornell, so it deserves extended treatment:
"The associates’ memo – dubbed ‘Paddinggate’ – was
a particularly difficult moment. The memo, which was leaked
onto the internet in October 2002, exposed US associates’ morale
as rock bottom. Even more damagingly, it said that pressure
to bill could have led to a situation where bills were being
padded. There has never been any suggestion that this was actually
happening, but the mere mention of it got the world’s business
press salivating."Arthur Andersen had collapsed just a few months previously,
and The Lawyer has spoken to a series of partners who candidly
say that many felt they were facing something similar. Most
admit that Cornell was admirably calm under extreme pressure."
“I appreciated very early that we had to take this seriously,” confesses
Cornell. “It didn’t matter that it wasn’t a real story: this had legs and
could do the firm a lot of damage. We had to close it down.”"
So those were the challenges; what is Cornell’s legacy? (Understanding,
of course, that there’s no such thing as a "legacy" in a people-intensive
and people-driven business; there’s only, shall we say, a
platform going forward from which to attract and retain the
right people.)
First of all, Cornell has struck through the Gordian Knot of
lockstep vs. eat-what-you-kill compensation with a partnership-approved
referendum late last year to establish the principle of three
different equity ladders for different global jurisdictions
(reflecting inherent profitability differences), and which also
puts partners on a triennial evaluation cycle, where they can
be "frozen" at their current point-score or moved down and even
accelerated to annual reviews.
Note that this was approved after a 2003 failure to get approval
of another modified-lockstep proposal; so "coming back to
the well" was not risk-averse behavior. Cornell’s
reaction to criticism?: "Criticism? It bounces
off me pretty much." Next time you’re considering
your own suitability for managing partner, consider this remark.
And the numbers should speak for themselves: CC’s PPP
is projected to hit £850,000 this year ($US 1,515,000)
vs. last year’s £710,000 ($US 1,265,000).
But
ultimately, the question of interest is how did Cornell go
about achieving what he did?
It comes down to people.
"Cornell still seems most comfortable talking about
the intangibles. If anything, he seems a natural senior partner
rather than a managing partner. Not for him the sliderule
approach to cost per lawyer and profit margin; rather, he
prefers to talk about whether the partnership is… well… happy."
Care to dimensionalize this?
“In a one-on-one situation he’s very good,” says one partner. “He doesn’t get into details. He usually finds something of interest to you and you’ll feel good about having the conversation. Pete’s style is to absorb other people’s views and not to indicate a view of his own.”
How many times do we pay obeisance to the bromide that ours is a
people-centric profession, but then fail to acknowledge the
importance of the viewpoints of our people? Cornell is a counter-example.
So, after having taking Clifford Chance from, if not the rocks,
at least the gathering storm, what are Cornell’s parting
words of
advice to those who are, or aspire to, managing partner? Pithy:
- Focus on the big things
- Extend your network—down to junior partners and
associates - Delegate
- Be consistent
- No bullshit
- Be thick-skinned
To those who still feel called to the challenge, all rise.
