I had occasion recently to reflect on the situation facing a fair number of firms who have managing partners (or chairs, or CEO’s, whatever their titles) who have held the post for a relatively long time and where there is, to the outward eye at least, no heir apparent.
This relatively common scenario raises a series of questions:
- Should there be term limits on managing partners?
- Should a formal succession planning process be instituted as a matter of good corporate governance or firm hygiene?
- What does it mean to say a managing partner is doing a good job?
- And perhaps most important, if most subtle of all, how does a managing partner know his time is up?
First, term limits:
No. I believe they’re just plain bad policy.
What about the 22nd Amendment? If it’s Constitutional Law, how bad an idea can it be? Without resorting to ad hominem constitutinem arguments about other ideas justly entitled to opprobrium once or currently enshrined in the Constitution, let me only say that that Amendment was clearly passed in a reflexive spasm to a single Imperial (and polarizing) President, FDR, who flouted the tradition in place since George Washington of voluntarily standing down after two terms. It owes far more to the heart than the head.
Back to term limits. When I say that I’m against them, I say this not just as someone who has been President of our Upper West Side co-op for 17 of the 20 years we’ve lived here (not the first year, and a two-year hiatus when I was working outside the City–each term one and only one year, by the way), but as someone who believes leaders should know when their expiration date has arrived.
But the argument for term limits, you’re saying, is that not all leaders do know when their time is up.
Yes, I would agree, but enacting term limits firm-wide and for all managing partners (all executive committee members? all practice group leaders? all office heads? all committee chairs? for that matter, all C-suite executives?) as a remedy is to fall prey to the intellectually ugly but superficially seductive governing fallacy of Managing For Failure.
You could analogize it to banning all kids from the playing field at recess because of one bully, or detaining the entire class after school because one snitch wouldn’t admit it was him. In your heart, you knew it was unfair then, and it’s still unfair today.
The ultimate remedy for no-term-limits is, of course, democracy itself: Vote the bum out.
Second, succession planning.
Tougher call.
This is probably a situation where “don’t ask, don’t tell” actually has a place. Faithful readers know that I’m a securities lawyer by training and hence worship at the altar of the demigod of Disclosure, but there are greater gods than that, and this may be such a situation.
The problem is that if you do put a formal succession planning process in place, you can invite:
- jockeying for position;
- the concomitant gossip, innuendo, and navel-gazing throughout the firm; and
- distractions for the incumbent who should be 110% focused on doing the job in front of him.
On the other hand, without such a process, you potentially invite:
- chaos or at least disorder when the managing partner finally does step down;
- intergenerational conflicts; and
- a divided electorate, resulting in a polarized result and/or a polarizing new managing partner.
Implicitly, here, you may have noticed, I’m assuming a situation where the incumbent MP leaves office abruptly and without warning–because of a health issue, say, or (heaven forfend) a mini-scandal. These are the rare events. With the vast majority of long-serving MP’s, they actually plan their successorship far in advance, and can foretell to the month and the day what may be their last in office.
So, ultimately, my recommendation?
Don’t put a formal process in place, but be sure that there is a pronounced, serious, thoughtful, committed, and ongoing firm-wide effort in place behind leadership planning and development. If you have a strong enough bench, then when the appointed day comes, you will have strong candidates to choose between–even if the MP’s departure comes as a shock.
Third, what does “doing a good job” mean for a managing partner?
May I suggest it’s in the eye of the beholder?
I don’t mean to be coy, but I’ve run across managing partners who conspire to alienate their partners while making lots of decisions that are, by any objective measure, correct and necessary, and others who are beloved of their partners while making almost exactly the same sorts of decisions.
I hasten to add that any MP who makes bad decisions–even one genuinely bad decision–will lose the confidence of his peers. That’s not the bar against which I measure “doing a good job.”
Rather, the question is the extent to which the MP can bring the firm along with his decisions, both by preparing the spadework in advance and by communicating and explaining (relentlessly, I might add) the rationale for the decision once it’s taken–and what’s in it for the partners. I emphasize communication because the hardest part of being the MP is not necessarily taking the decisions that must be taken, although surely judgment is indispensable (see below): Rather, the challenging part, especially in a law firm full of autonomy-seeking Type A people who are verbally gifted and prone to skepticism is to get them to see that the decisions taken are correct–and to see you, the MP, as a genuine leader.
Finally, how do you know when it’s time to go?
Let me suggest this is conceptually the flip side of what does “doing a good job” mean. In other words, when you no longer are, time’s up.
So let’s delve a bit more into what MP’s operating at the top of their form actually do.
I believe they reach a very high and daunting plateau of performance which is at the intersection of experience and intuition. We’ve all heard and read a surfeit about the “10,000 hour rule,” how “talent is over-rated,” and the difference between (say) very talented amateurs and concert pianists, or championship tennis players, or extreme computer programmers. The common and by now even relentless theme is that shoulder to the grindstone for hours and hours and hours is what it takes to distinguish the champion-caliber performers from the highly capable also-rans.
I don’t think it’s that simple.
For one thing, I believe that there is a substantial cohort of people, myself included in many dimensions, who could practice and study at levels matching the most arduously devoted of the champions and never achieve greatness or even much more than above-average competence. There has to be another ingredient besides simply droning on and putting in the hours.
In Managing Partner-land, may I suggest that other ingredient is intuition?
Intuition about?
- What partners really mean when they say X, Y, Z.
- What clients really mean when they say the same.
- Judging personalities clearly, crisply, and accurately–and pretty much on sight.
- Being very hard-headed about marketplace dynamics.
- Having superb strategic instincts: When the time is right to strike, first and hard, and when it’s wiser to keep one’s powder dry, or pass on the opportunity altogether.
All of these types of intuition and judgment must rest on a bedrock of experience, but, as I implied about myself and concert-level pianists or championship tennis players, experience alone won’t bring everyone to that level. It takes some other ingredient to make a truly great MP, operating on that high plane where intuition and experience marry in a beautifully choreographed and enduring body of creativity on behalf of and for the greater good of the firm.
You can’t bottle this stuff (more’s the pity) and you can’t buy it or test for it. You only know it when you see it in action.
Experience + intuition? Yes, and with a career-long focus on what the MP’s job is all about–as if they’d been training for decades.
