How firms can benefit from lawyers taking up non-executive appointments

For some, the lure of a string of non-executive directorships represents a potentially lucrative nest-egg between giving up full-time legal work and retirement proper. For others, the chance to be on the board as a part-time director provides invaluable education into how organisations are run and how boards operate. They can also provide kudos, and even an opportunity, for law firms and legal departments to benefit from the skills and knowledge their lawyers are picking up ‘on the outside’.

Jason Saiban is a 40-year-old commercial contract lawyer specialising in sport, technology and pharmaceuticals at law firm Charles Russell. He became a non-executive at his father-in-law’s pharmaceutical company Special Products in June 2009. The company develops and distributes ‘special’ medicinal products, which means medicines requested by doctors, dentists or supplementary prescribers to meet the special needs of individual patients.

His father-in-law wanted a family member to be involved in the business and so he was invited to become a non-executive. ‘I think becoming a non-executive has been a great way for me to develop my business acumen,’ he says. ‘It gives me a hands-on sense of how a business is run and has given me a better perspective on management strategy.’

Saiban is not responsible for the company’s legal issues, but obviously has commercial law experience, ‘so I bring that knowledge to the table and advise where appropriate. I have found that it is not my legal expertise that is my most valued attribute, it is the other skills that I have picked up as a lawyer that help the most – the ability to step back and take a wider and more considered view; having a pragmatic approach; resolving difficult issues, analysing complex information; not being afraid to ask dumb questions; and so on’.

Saiban believes his experience as a non-executive director means he is gaining valuable management, business and finance experience.

Adrian Oliver, senior partner at Cardiff-based legal practice Dolmans Solicitors, has been the chair of South Wales Police Youth Trust since it was founded in 2009. The charity works with vulnerable children and gets them involved in community-based activities, such as football and sports.

Oliver was invited to join the trust because his law firm had a reputation for providing legal advice and services to the charity sector, and it was well-positioned within the community to help with fund-raising. On a personal level, Oliver was interested in taking an active role as his father had been a policeman in the same force.

Clare Hoskins, partner at Dolmans Solicitors in Cardiff, was until recently on the boards of the Commonwealth Games Council for Wales and Welsh Triathlon. ‘I was a triathlete and cross-country runner for Wales and I wanted to use my professional expertise to help these sporting organisations that I had a personal interest in,’ she says. The experience was ‘good fun but hard work’ and ‘required quite a lot of my time on occasions, which was not easy to manage with office and family commitments’. However, she says she learned a lot about how organisations and boards are run, and would definitely consider taking on another non-executive role in the future. ‘I would also encourage other lawyers – especially women – to become non-executives. Lawyers have plenty of skills and expertise to add to the mix, and boards need to have greater gender diversity in the future,’ she concludes.

Trustees, Oliver says, meet on a quarterly basis, although there are further management meetings (usually four times a year) where planning for the trustee meetings is arranged. In addition, Oliver meets the legal director of South Wales Police on a regular basis to discuss means by which the board can improve or streamline the trust’s processes.

‘The work is very fulfilling and it gives me great pleasure to receive feedback on the trust’s successes and, in turn, to circulate details of the same among our own staff,’ he says. ‘The feedback I receive is that, while everyone wishes to donate to good causes on a regular basis, there is an extra "buzz" in seeing benefits occurring in the local community and seeing the results very shortly after the fundraising in real terms, rather than committing to a larger charity where the benefits are understood, but not always as visible.’

Dolmans encourages its lawyers to engage in local projects in their own time. ‘You can learn a lot about how charities are managed and the day-to-day difficulties they can face from being personally involved in helping to run them,’ says Oliver. ‘But having outside interests and volunteering can also be a good way to network professionally, for yourself and for the firm.’

Barings general counsel Sandie Okoro concurs: ‘I would advise lawyers to seek out governance experience in external organisations as their careers progress. While these opportunities can feel like a stretch for a busy professional, for non-executive appointments, as for executive board appointments, decisions are made on people's "ready-made" experiences, rather than on their untried potential.’

Among many external positions Okoro has held are roles as a school governor, trustee of LawWorks and currently non-exec for dispute resolution body the PRIME Finance Foundation.

But Oliver warns that time commitment can be an issue: ‘The time I have to commit to the charity is usually found at weekends. Apart from the legal issues, the greatest amount of time is taken up in dealing with grant applications and ensuring that the views of other trustees are taken into account in approving or rejecting the same.

‘This can be time-consuming when all the trustees have busy schedules and it is generally dealt with by email, although there are occasions when the trustees have to meet to specifically deal with a grant. I never cease to be amazed at the late hour at which email exchanges take place.’

The issue of time commitment is something lawyers need to have a hard think about, say insiders. One lawyer who is also a non-executive points out: ‘The organisation might only say there are six meetings a year, but there may be board training and strategy days, and the preparation needed for each meeting may take two days. Suddenly six days becomes 20 days, and if you have three or four other non-executive roles, this adds up to two or three months’ work.’

While some practitioners have taken on non-executive roles alongside their day-to-day legal work, others have decided to take non-executive roles once they have left legal practice, or have put out ‘feelers’ to contacts so they can try to secure them. Sean Lippell, a 61-year-old former corporate partner at Addleshaw Goddard in Leeds, became a first-time non-executive when he joined Harrogate-based Acceleris Marketing Communications a year ago. ‘I had known the chairman and chief executive of the company for a long time, so my appointment came about through personal connections,’ says Lippell, who is hoping to get a portfolio of non-executive appointments to ‘keep him occupied’.

One lawyer has been planning his non-executive portfolio for over 15 years. In the mid-1990s, John Jackson started thinking about the future and decided he wanted to help a number of businesses, but not as a solicitor. He set up his own company in 2001 and started taking non-executive or consultancy appointments while still a partner working in corporate finance at DLA. The law firm was happy for him to work for it on a part-time basis, as was Shoosmiths, which he joined in 2005 and where he is now a consultant.

Jackson currently has four non-executive directorships, all in unrelated industries: he is on the boards of financial services provider CMC Markets, Norwegian pharmaceutical company Algeta, employee benefits business Lorica, and a privately-owned property services company.

‘I did not want to be typecast, so I have always opted to act as a non-executive or consultant in organisations that have stretched my capabilities and challenged me,’ says Jackson. Companies, he says, are increasingly concerned about confidentiality: ‘They don’t want you going to a rival organisation and sharing stories. As I keep an eclectic portfolio, this is much less of an issue for me.’

Some lawyers have become very experienced non-executives, with several admitting – at least privately – that once a lawyer successfully wins one appointment, the likelihood that others may follow improves. But this does not mean that lawyers collect non-executive roles like trophies. Anecdotal evidence suggests they are a discerning bunch, and that they will only take on a role if it is right for them.

Philip Goldenberg, a consultant at Michael Conn Goldsobel solicitors, has held a wide range of non-executive directorships in the private and charity sectors, including being chairman of quoted property company Mission Capital PLC until 2011, and a trustee and treasurer at the Royal Society of Arts between 2004-2009. He is currently chairman of the Tuberous Sclerosis Association, a charity that helps people with a complex medical condition. He has also been an elected councillor.

Goldenberg says there are two key criteria that must be fulfilled before he takes a non-executive appointment: ‘I ask myself whether I think I can add value to the board and the organisation, and whether I will enjoy the experience. There have been occasions where I knew I might not enjoy being on the board, but hoped that my involvement would improve its governance.’Goldenberg dispels the notion that lawyers automatically make good non-executives. He says there are a number of key attributes that non-executives need to have to be effective – and lawyers do not necessarily possess them. ‘Non-executives need to be able to show vision, understand strategy, and engage in careful analysis and constructive challenge,’ he says. ‘Some lawyers have these skills, but not all who do use them well. It is not a given that lawyers should be highly sought after to be non-executives.’

He adds: ‘Boards are looking for people with practical experience and who have had a varied background. They do not need specialist advisers as non-executives – companies can employ or hire in people to give specialist advice, so why have them on the board? Boards want an independent challenge to make sure the strategy the company is going to embark on is the right one for the business, and that sort of credible challenge only comes from having previous – and preferably diverse – experience.’

Alan Jenkins, who formally retired as chairman of Eversheds last April, has a string of non-executive directorships at organisations as diverse as the Crown Prosecution Service, investment property and management firm Sydney & London Properties Ltd, and Mencap Trust Company Ltd, which administers discretionary trust funds for people with learning disabilities. He also believes ‘boards are looking for people with business experience and particular strategic skills – not lawyers’.

‘My CV is attractive because I have experience of working at senior management level and have a track record in building up a successful business and expanding it overseas,’ Jenkins says. ‘Directors want non-executives who have been through the same kind of business processes – IPOs, management buy-outs, M&A, entering new markets and so on. They don’t want people who have no experience of running a business.’

Jenkins also points out that lawyers need to be aware it can take time before they get their first non-executive appointment: ‘People should not think that they can simply retire on Friday and become a non-executive on Monday. It simply doesn’t happen like that.

‘You can wait a long time for a non-executive post to turn up, very often because no one is likely to take a chance on having someone on the board without previous non-executive experience. The easiest way to be offered a role is through a personal recommendation from a contact in the private sector.’

Goldenberg also believes the business model that law firms are employing may be stifling the opportunity for legal professionals to show and realise their potential as non-executives. ‘Many law firms have too short a focus on how the work of partners can benefit the business’s bottom line this year, rather than any long-term view of how the firm and its partners could be positioned in five or 10 years’ time,’ he says. ‘As a result, billable time takes priority, which leaves no room for lawyers to follow outside pursuits, and this prevents them from gaining the necessary experience that would make them more attractive as non-executives.’

David Harrel, legal mentor for board effectiveness consultancy IDDAS and a serial non-executive director himself, holds similar views: ‘I have been told there are only 14 lawyers as non-executives in the FTSE 350, and I suspect most of those had management roles in their firms and were therefore more readily seen as having transferable skills.

‘The demands of legal practice are such that there is little time in the working day to develop interests outside. Those very same demands lead to lawyers retiring early or, as often as not, being encouraged to do so to make room for younger partners. It is a moot point as to whether this is a good model for firms to adopt or the best use of their senior and experienced talent, but while it persists there is a pool of talent leaving law firms which is too young to retire completely and is looking to develop other interests, including roles as NEDs, for which they are, in the main, ill-prepared.’

He adds: ‘It has yet to be tested whether firms are prepared to relent on the requirement for chargeable hours to allow such programmes to work, or the extent to which insecure overachieving partners are prepared to sign up. There is no doubt that lawyers can make a major contribution as non-executives, but some work is needed to best equip them for such roles and to reverse current perceptions. By equipping their partners to make the transition to roles such as non-executive, firms will help them to develop into more rounded business lawyers which must be to their mutual benefit, and maybe as a result they will then seek ways to retain their senior talent for longer.’

Harrel says that in a corporate environment, particularly in financial services, where there is increasing regulation and emphasis on corporate governance and risk, one might expect a greater need for legal experience on boards, and indeed this represents an opportunity, but legal expertise in itself is not enough. ‘The view generally is that you can always hire expertise and it comes with the added benefit of indemnity insurance,’ he says.

A number of law firms, having recognised the issue, are beginning to build programmes emulating what the major accounting firms have been doing for many years, says Harrel. But he warns that ‘such programmes need to target lawyers 10 years before possible retirement, and encourage them to take up outside interests and appointments, build their business networks, get involved in industry bodies, and develop their business skills’.

Top tips for candidates

Chris Spencer-Phillips, managing director at non-executive recruitment specialists First Flight, says the most common candidates for non-executive appointments are former chief executives or business owners – but that with a bit of skilful profiling, lawyers can improve their chances.

‘Lawyers obviously have key skills that organisations will find useful, but companies want a proven track record of business and management experience. It is therefore vital that lawyers promote their business acumen, rather than just their legal expertise,’ he says. Some top tips from those in the know include:

Develop your personal network. This is particularly crucial if you are looking to work in the private sector. Alan Jenkins, former chairman of Eversheds, says that some of these appointments are through a mix of personal recommendations from his contacts, and through personal choice from either being approached directly, or applying for the position himself. He adds that his legal expertise was not a primary consideration for any of the roles.

Use the relationship you have with headhunters. They can be very generous with their time, very good about feedback on your CV and may help you look at the non-legal skills you have which could be appealing. Most have quite a strong influence on the candidates the board will meet.

Your CV is critical. Having a good CV that illustrates clearly your non-legal skills and is tailored to each opportunity is essential. The CV needs to grab the reader’s attention from the beginning. Market yourself as a business person who is ‘in law’. Do not present yourself exclusively as a lawyer.

Prepare your presentation skills. Lawyers are often accustomed to presenting to quiet rooms filled with people who are seeking their legal expertise. As a non-executive, you need to grab their attention, be clear with your message and set the right tone.

Decide how ambitious you are and be realistic about where you are starting from. Being a partner at a City law firm or general counsel at a FTSE 100 company does not mean you are qualified to be a non-executive. It takes patience: starting out quite small and gradually moving to larger organisations is probably a good path.

Look at whether or not you have your firm’s support before applying for non-executive or trustee roles. The time commitment can be hard in some circumstances.

Earning your spurs

One of the more accessible ways of becoming a non-executive director is to offer one’s time – and professional expertise – for free. Many lawyers have found the voluntary sector – charities, not-for-profit organisations and community interest groups – as a place to earn their spurs as non-executives. And it is probably fair to say the rewards far outweigh the remuneration.

Tom Murray, a partner with Edinburgh-based professional services firm Gillespie Macandrew, has taken on many non-executive roles over the past 20 years, several of which have been in the voluntary sector. He is currently on the board of the Scottish National War Memorial, and has recently been appointed by the Big Lottery as the protector of the Jessica (Scotland) Trust, an organisation that aims to fund community-based regeneration projects in deprived areas. He is also a director of global aid agency Mercy Corps.

‘I find my work with Mercy Corps fascinating,’ says Murray. ‘As a lawyer I tend to be risk-averse, but Mercy Corps aims to make a difference in some of the world’s riskiest environments that have experienced natural disaster, economic collapse or conflict.

‘The chairman approached me to join the board because of my legal expertise and also my experience with another charity that I helped return to a stable financial and constitutional footing. It is very rewarding working with other board members drawn from international businesses, and with the country representatives learning about the challenges they face on a daily basis.’

He adds: ‘I encourage anyone to take on such roles. The direct experience it provides enables you to give far better, proportionate and balanced advice. It is also enormously rewarding; challenging you to think in a different way and to interact with people who have huge knowledge of their specialisms.’

Lawrence Simanowitz, partner in the charity and social enterprise team at Bates Wells & Braithwaite, which has a particular client focus on the charity sector, is a board member of several organisations – the Fundraising Standards Board, the independent self-regulatory body for UK fundraising; performing arts academy Urdang Ltd and Urdang Schools Ltd; and 38 Degrees Trust, an organisation that encourages social and political engagement.

Simanowitz is also on the board of the The Elders, a charity set up by businessman Richard Branson and former South African president Nelson Mandela to resolve the most difficult and intractable international conflicts. He provides the board with English charity law expertise.

Simanowitz says he has always been ‘one of those people who likes to get involved in committees’ and says the firm’s relationship with the charity sector – around 60%-70% of the firm’s client base is made up of charities – invariably meant he would be approached to serve as a trustee. But he warns other lawyers considering taking up a non-executive role that time demands can be a problem: ‘If you have three or four other non-executive roles, that can really eat into your spare time.’

Neil Hodge is a freelance journalist