Freshfields had to adapt again in the 1960’s and 1970’s. The firm didn’t think that its corporate practice was on a par with some of its peers so the partners re-invented the firm by targeting new clients and de-emphasizing its family practice. How did it achieve this? The answer: “Align your client strategy with your people strategy.” Simple, profound, honored in the breach.
A more recent example of a “pivot” came with the Big Bang in the he 1980’s and the deregulation of securities markets: Freshfields realized it would have to go after new organizations as clients, including US investment banks. And yet more recently, in 2000, came the three-way merger between Freshfields/UK, Deringer Tessin (Germany) and Bruckhaus Westrick (Germany/Austria)—a merger quite risky, Ted reminded me, for all three firms.
“How do you manage lawyers?”
Ted:
“Well, we would probably not admit to managing lawyers at Freshfields. That wouldn’t be consistent with our culture. We would instead just talk about how we try to get the best out of each other.”
Bruce: “‘Culture’ can be a tricky word; every firm likes to talk about it, but in my experience surprisingly few managing partners can define what it really means for their firm and it can be interpreted so differently. What do you mean?”
Ted:
Culture is “the way things are done.” It’s different than values, which are aspirational. Culture is the reality. If you sit in the reception area of any corporation for half an hour, you can work out the culture. The way people talk to each other, their energy level, how fast they walk, the way they welcome clients, job candidates, everyone. The language they use.
In our case, culture would include how we work together, our approach to client service and to community responsibility, the degree of our ambition, the way we talk to each other, the way we treat everyone in the firm and outside the firm, the way we elect partners, the way we recruit people, the way we value contribution. It’s everything, really, and goes beyond the conventional view of systems, which may reinforce culture but are not proxies for culture. Culture evolves over time, and it should evolve, but it can’t be microwaved. It’s more like a very slow crockpot dish.
“So tell me how you make decisions.”
Our decision-making processes must be in tune with our culture and must also reinforce our culture. We place a premium on partnership and consensus-building. Why? Because we think that’s the best form of governance for lawyers. Lawyers are inclined to be highly autonomous and want to have a real say in their professional future. That’s best achieved in a real partnership and by that I mean a partnership in spirit not just in form.
With more than 400 partners in 20 countries, it’s a lot different animal than when everyone could gather in one conference room. Lawyers are highly autonomous and that’s why I believe the partnership structure is the best model for a professional service firm—speaking of the cultural dimension of partnership, not the technical legal form of the enterprise.
“So how do you preserve partnership spirit at Freshfields?”
First, we get together a lot. [Freshfields has a global partners’ meeting every 18 months—this year in Paris, which will be Ted’s last appearance as head of the firm.—Bruce] That can be expensive but it’s worth it. Partnerships require mutual trust and trust in turn requires familiarity. And eventually something more than professional respect emerges. Friendships around the world are formed and it can be incredibly rewarding.
Second, we spend a lot of time on consensus-building and put just about all material decisions in front of the partnership. Does that mean we’re slow to make decisions? Yes, but only to some extent. We pride ourselves on acting extremely quickly in our client service. That’s important. But there have been few internal decisions that have required very fast responses, though this is probably changing. In any event, when we need the partnership to respond very fast, they have done so. You just have to pick your spots and not ask them to do that on a regular basis.
Lastly, we do think that our lockstep remuneration system also contributes to our partnership ethos.
