Chartered Management Institute companion Michael Bray, until recently CEO of Clifford Chance, pinpoints the strategic challenges facing all law firms.
Strategy is not that difficult. It comes from the heart as much as the mind. It's about vision and imagination, about passion, a strong sense of who you are and what you want to be. It requires the courage to be ambitious and to recognise and seize opportunities in order to carve out and take ownership of the strategic space you have identified as your own.
If this sounds a little off-message in today's world, it is probably because for the past 27 years I have been a partner in the same professional firm. For many years I have held leadership roles in that firm, and have had the recent privilege to lead it through its ground-breaking mergers with firms in the US and Germany. Although the firm has had an exciting journey over the past 15 years, from a combination of two second-tier City firms to become the world's largest global law firm and a leader of the profession, none of us as partners has had the benefit of serious professional management training.
Professional firms are different from companies, and none more so than law firm partnerships. The partners of the major City firms represent some of the best lawyers in the profession, with a total commitment to excellence and client service. They have a strong partnership ethos and the most successful firms have thrived because of a strong sense of ownership, ambition, entrepreneurialism and - certainly in the case of Clifford Chance - opportunism, and even a touch of serendipity.
That is not to say that the strategic processes are not important. Of course they are. They help to shape the ambition and bring rigour and clarity to the thinking; and as law firms have become bigger and more complex, they have assumed greater importance. But the key is the ownership by the partners, individually and collectively, of the ambition and adherence to a set of values that the firm believes represent its culture and what it stands for. And I believe this will continue to be the case.
I'm in no doubt that Clifford Chance's success is the result of imagination, ambition, opportunism and applied intelligence, rather than the result of a form-al strategic process. The 1987 merger that created the firm was the brainchild of a few partners who saw the opportunity to bring together two medium-sized firms (Coward Chance and Clifford-Turner) to create a top-tier firm and change the shape of the legal market. The synergistic value lay in bringing together complementary practices and in combining the international operations.
On three occasions in the past 13 years we have conducted reviews of our ambition and strategy. On each occasion we have been rigorous about the process and used it to refine and then test the soundness and achievability of the strategy, rather than create the strategy in the way that might happen in the corporate world.
Yet it is not those processes, but rather the deep-seated belief of all the partners working towards the global law firm proposition that drives our success. After all, lawyers are trained to be careful, thorough, attentive to detail and risk-averse, and nothing less than such a passionate belief would have persuaded them over so many years, and through the ups and the downs, to support such an ambitious strategy.
We have learned many valuable lessons along the way. Most people underestimate the pace of change, and although ambitions must be grounded in reality, they must also be bold.
Success feeds courage and ambition. The establishment of a reputation as a pioneer or leader brings a first-mover advantage and allows more focus on clients and the market than on competitors. It is also important to recognise that although all lawyers are notoriously suspicious of 'management', a high-quality professional management team adds enormous value. These and many other lessons have become embedded in the firm's culture.
Looking forward, the strategic challenges facing the legal sector are becoming more complex - for all law firms. Of all the business professions, the legal profession has experienced the least amount of change. We are now seeing the changes that have affected other business sectors: consolidation and concentration, the leading players moving further ahead, some medium-sized firms struggling to identify a strategic positioning and a number of niche firms strongly marking out their territory.
As the markets become more complex and competitive and the clients more demanding, the way in which we work and serve them will change significantly over the next 10 years. For all law firms, the strategic processes will become more important: thorough analysis, a deep understanding of clients and their needs and a willingness to be honest about what a firm is good and not good at. Indeed, in the words of Jim Collins, we need to 'confront the brutal facts'.
But equally, while it will be essential to embrace these processes to bring precision and clarity to an overall ambition and strategy, it is the underlying strength of a firm's vision and values across the entire partnership that will determine the eventual winners and losers.