Originally published in The Legal Intelligencer/law.com
Smart Strategy
The recent rash of leadership transitions may have just recently caught the eye of the media, yet this conversation has dominated executive and policy committee discussions for some time. There is a dearth of up-and-coming leaders due in large part to the baby bust, or significantly smaller size of Gen X, sandwiched between the Baby Boomers and millennials. This generational phenomenon has left many firms with two choices—allow senior leaders to hold the reins longer than planned (or desired); or encourage younger leaders to take on roles for which they may not yet have the training and experience.
When it comes to leadership transitions, there are no easy answers. Unlike corporate organizations, many law firms deploy models more akin to political spheres, switching out leaders on predetermined term limits rather than based on performance. This approach is rarely in the best long-term interest of the firm (Imagine a board ousting a Fortune 500 CEO at the height of her career simply because the clock ticked to four years) and relies more on longevity and influence as the selection criteria than an objective evaluation of aptitude or potential as a leader.
In fact, according to recent research co-produced by ALM and The Tilt Institute,
“Over a third of respondents believed their most recent senior-most leadership transition had a neutral or negative effect on firm culture.
A striking 37% of senior-most leaders are characterized as having leadership styles that dampen, rather than improve, engagement.”
The most likely driver of these findings? Lack of preparation. A typical lawyer receives less than 10 hours of leadership training annually according to the same research, and professional development heads rate the efficacy of their leadership programs mediocre at best (4.6 on a scale of 10 in efficacy).
It is here where law firms have enormous power to positively impact their future and address the baby bust challenge. A robust leadership pipeline—made up of individuals imbued with preparation, training and experience to effectively lead—can provide firms with the right people to shepherd the firm through challenges, ignite profitable growth and respond to the increased influence and demands of talent. It is here firms will find their greatest competitive advantage.
To build a leadership pipeline demands a host of factors:
Creating leadership opportunities.
Determining when and how to move people into leadership.
Evaluating the characteristics and traits most suitable for the firm at any given moment.
Gauging the interest and willingness of all involved.
Giving emerging leaders the training, tools and resources to be most effective.
Creating leadership opportunities:
For most firms, leadership opportunities are abundant. Roles as committee chairs, practice and department heads, executive committee and board members abound. Task forces (different from committees in that they are intentionally transient rather than permanent) are, similarly, excellent chances to put early career lawyers in temporary leadership roles or to test out the skills of advancing leaders without a long-term commitment.
Determining When and How to Move People Into Leadership—Is It Time?
Whether or not the existing leader is ready or an heir apparent identified, often situation and circumstance help to highlight the need for new blood at the helm. Executive teams can look for a handful of signs to indicate demand for a transition or infusion of new voices onto the leadership team is imminent (or warranted). They can also look to these factors as a guidepost identifying the characteristics incoming leaders must exhibit to be most impactful.
Stagnation—one of the primary reasons to consider new or different leadership is complacency. Stagnant firms or groups demonstrate steady, but slow, growth. As the firm advances, others progress more quickly, leaving the firm trailing competitors, yet still doing well enough to keep most partners happy. Loyal clients often stay with the firm and billings are more or less consistent. Few clients are growing at a rapid clip and new client intake is weak. The overall tenor at team meetings is laissez-faire. People are content. This is one of the most often overlooked reasons for a change in leadership.
Crisis—a second situation ripe for leadership change is when a group or firm is under duress. Hallmarks of these scenarios are falling financials, noteworthy departures, loss of key clients and/or internal tensions. Under these conditions, there is often a loss of confidence in leadership and a call for change. That said, leadership changes during times of crisis should be approached with caution. Instability and insecurity are rampant and the incoming leader’s role will be fraught with expectations and likely welcomed with a healthy dose of skepticism.
Expansion/growth—skyrocketing profits or climbing revenue may seem like a counterintuitive sign a change is needed. After all, the leader of the group or firm just helped to propel them forward. Generally, people are pleased and enjoying the fruits of their labor. Periods of rapid growth, though, can also be exhausting—for teams and their leaders. Larger groups or firms may have new or different issues (e.g., infrastructure shortcomings or ineffective operational structures). Similarly, prosperous times may catapult a group into a new competitive tier, open doors to marquee clients or spark interest from new talent or lateral groups.
Changing culture/core values—generational shifts and differences alongside a broadening political spectrum lie at the root of another indicator in favor of movement at the top: a change in culture and core values. Increased tensions within the group or firm, alongside an unwillingness of leaders to adapt or, worse, those who vocally advocate for “going back to the way things were,” is a surefire sign it is time to welcome new and diverse perspectives into the ranks. Newer generations, in particular, look to their places of work to be mainsprings of societal change.
Evaluating the Characteristics and Traits Most Suitable for the Firm at Any Given Moment
There is no singular way to be an effective leader. Research on leadership styles and efficacy posit various ideas as to what it takes—decisiveness, vulnerability, authenticity, inspiration—all of which have merit and all of which evolve over time. What our grandparents’ generation perceived as admirable differs from what we aspire to which differs from what our children’s children will respond to best.
As a general rule, the type of leader best suited to the role will depend on specific strategy or goals. A good place to start is with an inventory of what the firm or group is hoping to accomplish in the next three to five years. What opportunities are on the horizon, what threats does the group foresee? Better yet, consult the firm’s or group’s strategic plan for insight and perspective to define specific expectations at the outset.
Once the groundwork is set, do a simple online search for a long list of leadership qualities. From this list, crowdsource and discuss which are essential to achieving the goals and addressing the challenges laid out above. Determine which of these exist on the current team and which are missing. Prioritize those the group considers most essential in an incoming leader, and which may be best delegated to other senior professionals within the firm.
Once the traits aligned with firm goals are established, look to situational cues for additional insight into the type of person or style best suited for advancing the group or firm. In line with the previous examples of when to initiate a leadership transition, below are examples of what a firm might look for in each circumstance.
Stagnation—at firms plagued by complacency, the right new leaders can help to infuse energy, new ideas and a sense of purpose. Look for individuals with a combination of vision, communication skills and empathy. Those who can set forth a clear path and inspire others by tapping into their unique personal motivators and perspectives. Note that the longer the firm or group has been entrenched in status quo, the harder it will be to incite change. Successful firms will allow ample time to register results and deploy strategic discipline, including clear goals, metrics and milestones, to achieve measured progress.
Crisis—crisis is a tricky time for a leadership transition, yet can be one of the most critical to ensure the firm or group comes out ahead. The most effective leaders in times of crisis may bring a different set of characteristics—decisiveness, transparency, steadiness – than those required in “normal” times. When a situation demands on-the-spot decisions, an analytical, measured approach may be too slow. Finding ways to balance the skills of leaders most adept in both crisis and non-crisis situations can be a useful way to approach leadership teams in these times.
Expansion/growth—a leader at the tail end of a period of high growth may want to continue to forge ahead at a time when the demands have shifted to recalibration. A new leader on the heels of high growth can help to retrench, refocus and re-energize, offering the support and encouragement needed to balance growth with other needed organizational change. An emphasis on integration after periods of expansion demands a people-focused approach, where the benefits of collaboration and relationship-building take precedence without losing sight of maintaining gains.
Changing culture/core values—effective leaders during times of cultural shifts benefit from inclusive mindsets, a willingness to listen and a knack for leaning into conflict rather than avoiding it. They create space for varied perspectives and make others feel heard, regardless of the ultimate decision or outcome. These leaders often embrace the idea of a growth mindset, are voracious learners and encourage those around them to do the same.
Gauging the Interest and Willingness of All Involved
Once it is evident a group or firm will benefit from the installment of a new leader at the helm, the executive team will then need to determine:
Is there a willing, prepared candidate with the skills and traits to come into the role?
Is the incumbent a willing participant, ready to relinquish the reins to a newcomer?
Individual assessments and a robust performance management approach (a tall order for most firms and a topic for another day …) can help to illuminate the answers to both questions. For most firms, this step will be a manual one, driven by one-on-one conversations with those involved.
Giving Emerging Leaders the Training, Tools and Resources to Be Most Effective
Finally, once clarity about the traits and expectations has been achieved, begin the process of analyzing which prospective candidates for the role embody these characteristics. To set the stage for a successful transition, consider “Does this person …”:
Exemplify the identified traits and, if any are missing, how can these be incorporated into the role or team.
Have the support of others in the group/firm and, if not, how can these relationships be forged or profile strengthen.
Possess the core strengths required; if yes, how can these be showcased or broadcast to increase awareness.
Have vulnerabilities; if so, what is the plan to improve and alleviate the impact of these in their new role.
And perhaps the most important question, is this person coachable? If the answer to this final question is no, find another candidate. A willingness to evolve is a nonnegotiable in law firm leadership today for any firm wanting to retain a competitive edge.
A Leadership Pipeline for Life
Of course, the best way to ensure preparedness—the trait that differentiates good companies from great ones according to the oft-quoted Good to Great by Jim Collins—is to train prospective leaders early and often. Who are prospective leaders? Any individual at the firm who has influence over another is a leader. The firms best positioned for leadership transitions will be those with the foresight to anticipate their needs years in advance and make the necessary investments, imbuing future leaders with the skills and mindsets needed to be most effective in their roles before they step into them.