The Chairman of LEX AFRICA, Werksmans partner Pieter Steyn, recently announced the publication of the comprehensive and sought after LEX AFRICA Guide to Doing Business in Africa (PDF).

The 2013 LEX AFRICA Guide to Doing Business in Africa – the investors’, business persons’ and professionals’ ‘must have

In the April edition of Edge International Communiqué three of my partners address important issues and provide insights and outline opportunities for the legal profession:

Jordan Furlong, in Law Firms and Women Partners: You’re Doing it Wrong emphasises that if firms are following typical practices in how they promote women into equity

One often hears partners or legal leaders mention ‘silos’ as an issue in their firm. Mostly, firms struggle to deal with this insidious threat that can, by stealth, undermine much of what is good about a firm and over time, cause extensive damage or block progress.

Also, once they are embedded in the culture and way of doing business of a firm, they are hard to eradicate. Often they arise due to simple failings around fundamental matters such as communication, consultation, trust and respect or lack thereof. Addressing them requires a direct interest and commitment from senior leadership. Failing this, nothing changes.

Silos are insidious; they can develop by stealth both vertically and horizontally and once embedded in your culture and way of doing business, can be difficult to dislodge. Left to mature they can be hugely damaging. The best bet is to recognise the danger, assess your position and start tackling the problem (Sean Larkan graphic – Edge International)

These silos, or what I have termed ‘horizontal’ or ‘vertical’ silos, even rear their heads in the most successful of firms. Only last week while on assignment in New Zealand a senior partner in a blue-chip corporate firm commented in regard to horizontal silos, ‘it is an issue which seems to have crept up on us – too many of our younger lawyers mix and share very well amongst themselves, but mainly within their levels or hierarchies, not above or below. This holds them back and impacts the effectiveness of the group in servicing clients. The problem is that management don’t seem to recognise this and get defensive if it is raised’.

They can even arise in the smallest of firms – I encountered such silos in a highly leveraged and successful south-eastern Asian two-partner firm!

Firstly, Vertical Silos; what do we mean by them? Essentially a body of people within the firm that, notwithstanding position, role or seniority, tend to work somewhat alone and isolated from others. They do their own thing and are characterised by a lack of sharing and communication. This may apply to practice or industry sector groups, partner teams, offices or even floors within offices. We have all seen them and experienced them at some time or another.

Secondly, horizontal silos; these can develop when there is a lack of communication, sharing or interaction between groups defined by role or seniority. The most obvious examples here are when salaried partners say are not treated as ‘partners’ but as ‘glorified employees’ which causes resentment, a lack of sharing, under-performance, lack of recognition and file or client hogging.

In both cases there will be examples that I have not listed or thought of.

What makes vertical and horizontal silos a challenge?
Continue Reading

The Gouldian Finch, research conducted at Macquarie University in late 2012 has shown, uses just one eye and one side of its brain to choose its partner for life. In the study published in Biology Letters the researchers found that ‘Beauty, therefore, is in the right eye of the beholder for these songbirds, providing, to our knowledge, the first demonstration of visual mate choice lateralization‘. Black-headed males choose black-headed females, and used only their right eyes and left side of their brains to do this.

Here’s looking at you kid, that is, if you are on my right-hand side and are the right colour – the Gouldian Finch chooses its mate by using only  its left brain and right eye. While clients may not do precisely this, we need to recognise they are all individuals, are different and use different criteria to choose our firm or our partners for that next assignment. It is also these individuals who determine the power or otherwise of our brands – Sean Larkan (Image: (c) www.birdsville.net.au)

This provides a timely reminder – we somehow seem to assume that all clients fall into one amorphous group – ‘clients’  – and that all our marketing and approaches to them can be similar and should produce the same results. Of course, this is wrong. Each client is very different. Each individual at every client is different. And it is these individuals who choose our firms or the partners at our firms for their next assignment. It is also what they think, these individuals, that constitutes our firm brands, and the individual personal brands of each of our partners. Some of these individuals are notoriously one-eyed. Others adopt what one may call a balanced approach, taking all factors into account. In each case we need to understand and respect this.

What can we learn from or do as a result of this?

  1. firstly, simply understand and respect their individual differences. Some clients are definitely left-brainers, detail people,  even pernickety (excessively precise and attentive to detail; fussy), want every ‘i’ dotted and ‘t’ crossed, while others rely on trust and relationships and that you will do the right thing by them and ‘sort out the detail‘ – the ‘just tell me where to sign‘ type. Others are a wonderful balance between these extremes;
    Continue Reading

LEX AFRICA, widely regarded as Africa’s leading, and certainly its largest, law firm network, celebrates its 20th anniversary at a time when there is unprecedented interest in Africa and attention from foreign investors and businesses. From humble but determined beginnings in 1993 with just five founding firms, LEX AFRICA has grown steadily to now number 29 country members. Recently Boussayene Knani & Houerbi of Tunisia joined this vibrant network.

As Nigel Shaw of founding firm Kaplan & Stratton in Kenya told me recently growth for this leading African legal network has not been a numbers game; it has been all about quality. : ‘. . . . in time, building on our founding principles, I would like to see us have a network that covers the whole of Africa and still with firms of lawyers who are considered to be the very best in their jurisdictions’. LEX AFRICA has long recognised that doing business and undertaking legal matters in Africa presents some special challenges. As a result, one of the key founding principles for the network was to only admit as members leading law firms from strategically important African countries – this underlying principle has built a strong foundation of quality to ensure clients referred to any member will be in good hands. This provides comfort to both the referrer and clients.

There has been an increasing interest in and focus on Africa in recent years not least of all due to the location of the SKA (single kilometre array) satellite station on the continent. Member firm Werksmans played a pivotal role in SKA project and it is anticipated member firms will continue to provide support to it.

I chatted to a few long-standing members and include some of their thoughts below but need to declare my interest – while managing partner of Werksmans back in 1993 we founded the network so I have remained keenly interested in its phenomenal growth and evolution over the past 20 years. I was chuffed to attend the AGM in 2012 in Maputo and be part of the 20th anniversary celebrations recently in Cape Town RSA. What struck me when I met many of the members at the Maputo meeting was how well they seemed to know one another. Clearly, regular personal contact and the building of relationships over many years seems to have built trust and respect and ensured active communication amongst members. It appears to have stood LEX AFRICA in good stead.

  1. I asked Osayaba Giwa-Osagie of Nigeria what initially attracted him to the LEX AFRICA network and what has kept his firm so active and committed since then?

As the Senior Partner in Giwa Osagie & Co, it was my responsibility to attract new clients to the firm and also to expand the firm. Many years ago I met Charles Butler, CEO of Werksmans and we struck up a good relationship after we had some good dealings with each other. We joined because we wanted to belong to a reputable network with a strong brand that would provide comfort to anyone who dealt with us. In turn we were comfortable knowing we had to earn our keep and produce quality legal services.

  1. What do you find most powerful/valuable about your membership? What do you like best?
    Continue Reading

Law firms seldom pay much attention to their capital structures. This has certainly been the case traditionally. Management of this important area was and still is often delegated to ‘the partner who seems to have the best handle on the financial stuff‘, sometimes the banking partner as he or she works with financial institutions! Given recent experiences via Dewey & le Boeuf and Goldman Sachs this seems like a risky option. Instead, very careful strategic financial advice and planning is required.  Far more attention should be given to the strength of firm balance sheets than they received in the past. I asked Cameron Taylor to join Legal Leaders Blog as a guest on this important subject.

Cameron has for the past decade annually analysed, reported on and presented the financial and performance results from Australia’s leading Legal Benchmarking Survey, FMRC, at their large firm meeting. He has 15 years experience in law firm management at a senior level and as a consultant working with international and domestic law firms in Australia on financial strategic issues.

After the Goldman Sachs meltdown, the CEO, speaking to the U.S. Treasury Secretary: “I’ve never rooted so hard for a competitor (Morgan Stanley). If they go, we’re next!”

His first comment to me on this was: ‘predicting rain doesn’t count – building a financial ark does!’ He continued:

A 2007 study described Goldman Sachs as one of the truly great professional partnerships, “a global juggernaut with such strengths that it operates with almost no external constraints in virtually any financial market it chooses, on the terms it chooses, on the scale it chooses, when it chooses, and with the partners it chooses”.1   

A year later its financial position was so dire its CEO speaking to the U.S. Treasury Secretary said “I’ve never rooted so hard for a competitor (Morgan Stanley), if they go, we’re next!2

Two decades of rising profits and few disasters have resulted in law firm balance sheets being a dull subject which is given limited attention by management and boards. This benign neglect of fundamental financial structures, when they are capable of generating infrequent but severe adverse consequences, is dangerous.

CAPITAL STRUCTURE MATTERS FOR LAW FIRMS

It doesn’t matter whether your firm is big or small, your capital structure matters. Undoubtedly, it is a subject of strategic import and it deserves serious attention on a regular and technically thorough basis. Make sure you get good advice and understand it.


Continue Reading

Alternative growth structures such as Swiss Vereins, global alliances, non-merger affiliations, expansion strategies and a great deal more is covered in the latest edition of the Edge International Review. It provides essential insights for legal leaders – in fact, just what legal leaders need to know about!

The latest edition

Again and again I come across senior law firm executives who are frantically busy with or concerned about their latest ‘big thing’ but who on enquiry struggle to relate this to the firm’s vision and strategy. Sometimes the latest item getting all the attention has arisen as a few other key competitor firms are doing

Salaried partners as a proportion of total partners in law firms are on the increase. However, there are good, bad and not such good things about many implementations of the salaried partnership regime in firms. It makes real sense to ensure that your salaried partner structure is working in the best way possible. This means putting it together well and managing it well with constant reviews and stress-testing along the way.

This increased use of salaried partners was one of the clear findings of the 2012 Edge International compensation system survey of leading firms in the US, Canada, UK, Europe and Australia. This is a world-wide trend and is a reversal of the position of only a few years back when it seemed the appointment of salaried partners was on the decline.

Putting together an optimal salaried or fixed share partnership regime can be one of the wisest moves that law firm leadership ever undertakes – it can result in countless benefits – providing for succession and the long term health of the firm, a happy and hugely productive group of salaried partners and properly managed, very profitable and satisfactory for the equity partner group. (Sean Larkan 2012)

I wrote an article on this subject in the ALMJ (Australian Law Management Journal) which is available for download as a PDF.  A precis of some of the key points follows:

I am a strong believer in appointing salaried partners and believe that properly structured and managed this structure and system has the potential for many benefits for all concerned. To name a few:

  1. it is a good way to show appreciation and recognition;
  2. it is a good testing ground before equity partnership;
  3. it is a confidence builder;
  4. salaried partners have the opportunity to find their feet and understand the partner culture;
  5. it provides status;
  6. it can be an ideal alternative to equity partnership for some;
  7. it is ideal for some who may never meet the criteria for equity;
  8. it can help out with tough decisions where realistically it may be “impossible” to appoint equity partners;
  9. it can provide a realistic buffer to poaching firms; and
  10. sometimes it is a counter to lawyers leaving for greener pastures.
Having said this, I have consulted to a number of firms where we came to the view that the salaried partner system within the firms had either not been implemented properly or was not being managed satisfactorily. The result was that the salaried partner group was so disenchanted and it had, quite unintentionally for all concerned, become the enemy within the camp.
This situation can arise when:
  1. salaried partnership is used simply as a blockage to equity;
  2. salaried partnership is used to “park” under-performing partners;
  3. they are not treated with respect or provided with opportunities in regard to communication, consultation, listening, sharing of information, access to clients and so on;
  4. salaried partners are partners in name only or as glorified employees (it is not unusual to hear equity partners call them just this);
  5. they come to be viewed as nothing but a “necessary evil” (believe it or not this does happen!);
  6. salaried partners have not had conveyed to them the true nature of the regime in the firm;

Some outcomes of this are:


Continue Reading

Law firms don’t recognise that the balance of power in relation to their employment brand lies not in their hands, but in the hands of their employees. To make matters worse, some of this power also lies in the hands of former employees, potential employees and other “employment stakeholders” such as recruitment agencies and digital media channels dedicated to commenting on the foibles of law firms.

Law firms don’t appreciate that the balance of power in relation to their employment brand lies with their employees, and even their former and potential employees, as well as with other parties like recruitment agencies . These other parties determine the brand. Firms assume it is what they offer that matters, but that is but one small component in the mix. (© Sean Larkan 2012)

This is because a firm’s employment brand is based on how the firm is perceived and experienced as an employer by existing employees, past employees and potential employees, as well as by other parties such as recruitment agencies and the media. Its employment brand is not what the firm thinks it is, but what these ‘others’ think it is.

This is a harsh lesson for most firms to stomach. It can be mystifying. Firms assume their employment brand is based on what they say in their recruitment materials, on their website, what they do, what they decide to offer employees as part of their employment package, and so on.

Instead, the power lies in the hands of others, the firm’s employees, past employees, potential employees, and others in the recruitment and media industries. What employers offer to their employees is merely part of what we call their employment brand offering. Firms still have a great deal of work to do to build their employment brand. For a start:

  • you must clarify your employment brand offering – identify, clarify and agree all the things you do offer to existing and potential employees and what makes working for the firm special and sets it apart. Bear in mind that standard features and benefits don’t make much of a difference; they don’t differentiate a firm as all firms offer them anyway – if they don’t now they can easily and quickly replicate them;
  • you must achieve Brand Fusion™ which is essentially ensuring that what you offer is actually experienced or has been experienced in the case of past employees. This is no mean feat given that you are largely dependent on the exigencies of individualistic, independent-minded partners to act as your front-line troops in making this happen;
    Continue Reading