Ted: We have this model of a hierarchy of needs for every law firm partner, and no, it’s not Maslow’s. The elements are:
- Platform: What’s the brand name, how good are the associates, what’s your position in the practice group (“are you the starter or are you backing up Michael Jordan?”, as Ted put it);
- Culture: Is it a fit?
- Financial issues: The obvious. Not just current pay, but capital contributions, pensions, etc.
- Security: “Lawyers want to work; they don’t want to retire at 45.” [By contrast, I-bankers often want to retire at 45—Bruce.] Security to lawyers means a steady stream of work., and that’s really important to them. And:
- Friendships. These can keep people at, or keep them out of, firms.
So new firms can change the market, without question, but it won’t just be about pay packages. It will have to be about meeting all the needs of potential partners.
Bruce: “So how do you think, strategically, about the future of a complex law firm today?”
All firms have had to redefine their market. It used to be all about their traditional local competitors who more or less operated with the same business model; now it’s much more difficult for firms such as ours to concisely describe the competition because we’re competing with different firms in different countries and practices. That, in turn, means strategy has become more complex.
But there will be loads of other changes. The employment model will change—it will get more complex. Business services will get increasingly professionalized. And firms will be required to make significantly greater capital expenditures as technology becomes more and more important.
I look five to seven years out; that seems to me to be about the right time frame. What sort of firm do you want to be in 2020?
“Finally,” I ask, “what’s the future? What next for Freshfields, after you’ve moved on?”
I think that Freshfields has a tremendous amount going for it. A really cohesive partnership with a strong, friendly, positive, partnerial culture. A great reputation for quality. A diverse mix of practices and a great, global footprint. A commitment to intergenerational equity. Stewardship. Leaving the place better than you found it. And a very large profit pool, which together with the culture, enables the firm to make significant long-term investments. I think that the firm will continue to adapt to changing client demands and I think that they will focus in particular on growth in the U.S. and in Asia. And they will succeed!
270 years. And counting.