Today’s challenging economy combined with uncertainty in the legal sector has brought more lawyers around to the idea of supplementing their legal knowledge with a business education. Training contracts are being deferred, redundancies are continuing and lawyers are considering their career options. A Masters in Business Administration (MBA) is a generalist qualification that is popular among senior management and those who aspire to leadership in other industries and professions.
Meanwhile, deregulation has brought a new dynamic to legal services. Competition from agile sectors and clients’ continual expectation of more for less has led firms to realise that in order to compete in a dramatically changing business environment, they need to be run in a more commercial manner.
This, plus the fact that corporate and commercial law firms are advising businesses on strategic and sometimes ‘bet the company’ decisions, makes business education relevant for lawyers, broadening their perspective and extending career options.
Recognising the value of experience outside the legal sector, some firms have recruited management and business support professionals from other industries. However, as most law firms retain the partnership structure, partners are regularly involved in strategic decision-making. Lawyers with a business qualification, the argument goes, can bridge the gap between private practice and commercial thinking.
Ian Jeffery, managing partner at Lewis Silkin, combines his London Business School (LBS) executive MBA and experience as a litigator to give the firm a strategic edge. In 2007, Jeffery was looking for a formal management qualification. He researched several options, including Harvard Business School’s week-long course on leading professional services firms, which concentrates on organisational behaviour and team dynamics. But he felt that the MBA offered a deeper, more generalist approach that drew from other industries. ‘The world is changing and law firms need to know what’s happening out there,’ he observes. LBS was the obvious choice because its location meant that he could complete a part-time executive MBA while working as managing partner.
Jeffery summarises the benefits he gained into three broad categories. ‘First is relevant skills and tools,’ he says. For example, quantitative techniques are useful for a capital investment decision in IT infrastructure or new premises. Jeffery is confident about evaluating the return on investment and discussing this with other professionals.
He adds: ‘Second there is understanding how management theories fit together.’ Pricing, for example, is an important element of law firm strategy. ‘There are many pricing models and each area of the business has a different perspective,’ Jeffery says. ‘Marketing looks at value; finance looks at cost of delivery and profit margins; and economics looks at competitive dynamics. All those elements have to be considered when making decisions on pricing strategy. Our strategy also has to consider the impact of every project on the firm’s brand.’
Finally, he adds, ‘there is intuitive leadership and emotional intelligence’. Lawyers are academically able and tend to be articulate. But this does not mean they are good team players. In a law firm, strategic decisions are made by different groups and individuals. As managing partner, Jeffery needs to operate effectively within different groups and he believes that the MBA has enabled him to make a stronger contribution to management decisions around marketing strategy and investment decisions.
Has the MBA changed his approach to management? ‘The main difference is in strategic planning,’ he says. ‘Previously, we used to think three to five years ahead and plot projects each year. Now we combine a longer-term strategic view with a three-month rolling programme focusing on priorities that bring us closer to our strategic vision.’ Would Jeffery recommend the MBA to lawyers? Not to all lawyers, but to the minority who aspire to a significant management role in the leadership of the firm. He says: ‘Lawyers who are interested in the art and science of business will find it rewarding in terms of personal and professional development, and it will improve their ability to discuss business issues with clients.’
Sam Dighton, real estate partner at Winckworth Sherwood, is halfway through an executive MBA at Kingston Business School. With 10 years’ experience as a lawyer, he embarked on the MBA because he was looking for in-depth management training and professional development and was seeking a new challenge. ‘Lawyers tend to get lost in detail, but it is important to think about strategy and people,’ he says.
He agrees with Jeffery that a broader business perspective will bring him closer to clients. Some elements of the course are less relevant than others and he believes that the benefits will become clearer as the course progresses. However, it is a challenge balancing his high-pressure transactional work with regular assignment deadlines.
These and other benefits of an MBA are equally appropriate to company lawyers. Toby Hornett, legal director at Canon Europe, was a corporate lawyer in the commercial group at Clifford Chance and had been qualified for 18 months when he embarked on a full-time MBA at France’s INSEAD in Fontainebleau (pictured). Hornett did not have a particular direction in mind but he was looking for a broader corporate perspective. He describes the main benefits as being around ‘organisational behaviour, know-how, emotional intelligence and learning how to get the most out of people – a toolkit that makes you more employable’, adding that law firms are realising that lawyers need to offer more than straightforward legal advice.
The MBA enhances Hornett’s role at Canon, he says. His knowledge of revenue and working capital facilitates meaningful discussions with the finance department, and his advice on mergers and acquisitions is informed by his understanding of the issues. The MBA has given him the corporate perspective he was seeking. He has also developed an interest in internal and external careers – coaching for lawyers and aspiring lawyers, which includes writing and presenting sessions. ‘As a lawyer, you don’t need an MBA, but it helps,’ he says.
Outside the law
Whereas lawyers opting for a part-time MBA course tend to look at developing their strategic and management responsibilities, and improving their empathy with clients, most of those taking time out for a full-time MBA are looking to move away from private practice, into corporate law or leaving the profession altogether. Dug Campbell was a corporate lawyer at MBM Commercial in Edinburgh, advising high-growth startups, entrepreneurs and investors. Like Hornett, he was looking for a broader perspective – inspired by his entrepreneurial clients.
‘I was not necessarily looking to leave the law,’ he says. ‘My clients were operating at the cutting edge and I felt – and still feel – that the legal industry is archaic and insular and not developing fast enough to respond to customer needs. Having practised law for 10 years I wanted to get some practical business experience.’ Like Jeffery and Hornett, Campbell found the quantitative work challenging initially, but the marketing modules inspirational: ‘Every lawyer is a salesman now – we all worry about our personal and professional brands.’ He now advises professional services firms and other businesses on social media integration, and digital and online marketing.
Gopika Spaenle, associate director, marketing communications at INSEAD, says that 80% of people start on the MBA course with a view to making a career change. Lawyers traditionally represent between 6% and 8% of each cohort. They are accustomed to a pressurised role, and have good analytical and relationship management skills. The challenges are on the quantitative side. Lawyers are attracted by the short, flexible nature of the 10-month course, its international footprint – there are opportunities for study and placements abroad – and the professional and cultural diversity.
Oliver Ashby, senior recruitment and admissions manager for the MBA programme at LBS, agrees with this assessment. Lawyers represent between 10% and 20% of the intake and they are mostly corporate lawyers from magic circle firms or industry. A common career path is from corporate lawyer to investment banker via the MBA. The executive MBA, which is part-time, attracts more senior managers and tends to include just a few lawyers.
Like Jeffery, Ashby cannot determine the best time to do an MBA. This depends on an individual’s career progression and motivation – whether they are seeking to develop or change their career. ‘Letting go of the clearly defined hierarchy of the legal services sector is a specific challenge for lawyers,’ he says. ‘The fact that a lawyer was from a magic circle firm would not automatically get them shortlisted for a job in consulting or investment banking.’ There is also the element of having to win people’s respect as opposed to being respected ‘automatically’ for their specialist expertise and their firm’s reputation.
Lawyers in private practice have a relatively homogeneous career, with a clear path from graduate to partner and the obvious alternative of working as an in-house lawyer. ‘The MBA offers an opportunity to discover what else is out there,’ says Ashby. ‘The London Business School full-time MBA includes two internships, so if a lawyer chooses to return to private practice, he or she has gained vital hands-on experience on the client side and not as an in-house lawyer.’
The MBA provides an in-depth understanding of how businesses work that gives a corporate lawyer a much broader perspective than they could get within a law firm. The LBS full-time MBA includes international exchange opportunities and industry work placements. This potentially creates career opportunities outside the law. For someone committed to a career in law, an industry placement provides the inside track on a particular sector that could inform future advice.
Building a network
Rashmi Sirdeshpande, a former equity capital markets lawyer at Clifford Chance, embarked on an MBA because she wanted to work on the client side. She is participating in LBS’s international exchange programme, studying entrepreneurship and marketing at the UCLA Anderson School of Management. Her ambition is to set up her own business. Like Campbell, she considers the MBA a vehicle for change, helping her identify what she wanted to do next: ‘Lawyers tend to be risk-averse and focus on detail, while the MBA provides a broader perspective and enables you to look at the bigger picture, and that is empowering.’
Sirdeshpande emphasises the value of building a network of people from different backgrounds, industries and cultures. ‘Working as a lawyer does involve meeting people from different professions, but the MBA helps you to understand them and build lasting connections,’ she says. Dighton agrees – everyone in his study group is from a different country and industry. ‘It is about looking away from your desk and seeing the world,’ he says.
Dominic Wilson, a director at private equity group Aggmore Capital Partners, was a real estate finance lawyer at a US law firm who moved to the client side. When the markets slowed down, Wilson decided to enrol on a full-time MBA at LBS. Initially, he was looking to run his own business and a generalist MBA with modules in strategy and marketing would support this.
Many people do the MBA to get a different job, observes Wilson, but he was looking for more. The main reason for applying to LBS was its diverse global network. ‘The greater the diversity, the greater the learning and perspective,’ he says. ‘By comparison, US MBAs are homogeneous.’ He does not see the benefit of an MBA course geared to law, finance or any other industry, because it would narrow the diversity and therefore the learning.
Wilson believes the MBA offers a lot more than the ability to get a job. He feels that it has improved his technical skills and enhanced his existing strengths, as well as improving his understanding of what motivates and drives people. As president of the school’s real estate club, he raised his profile in the industry chairing panels and presenting to leading industry figures. Wilson has seen professional and personal benefits: ‘Since completing the MBA, I feel more balanced and better placed to deal with whatever comes my way.’
War for talent
While senior lawyers who embark on an MBA are looking to enhance their leadership and commercial skills, those who look for business qualifications early in their careers are often considering leaving the profession. But, some argue, these are exactly the people that corporate and commercial firms should be trying to retain – those who are looking for challenges involving law and business.
Another option is an MBA in legal practice, but this appears to require the commitment of time, money and opportunity cost without the benefit of learning from other industries or the enhanced career opportunities offered by a generalist business qualification. However, as Dighton observes, there is room for a greater focus on the legal elements of business strategy within the MBA course itself: ‘Kingston Business School is associated with the university’s law school, so it could introduce practical law elements into the MBA – contract negotiations and key points about deals – that could add value to the MBA.’ He adds that lawyers have a particular way of thinking, and an insight into this could help people in other business areas.
All commentators mention the time-commitment challenge, either in terms of balancing part-time study with a full-time job, or the risk involved in leaving the workplace for a minimum of 10 months full-time study. Lawyers embarking on a generalist MBA tend to choose their school according to the calibre and reputation of the course and the business networking opportunities it offers. Jeffery, Dighton and Campbell chose their part-time MBA courses on the basis of location as well as reputation.
Lawyers combining work and study agree that support from their firm – particularly their immediate team – is critical.
Some say that lawyers should stick to lawyering and leave the business aspects of the firm to professional managers. The MBA is certainly not for everyone, but contributors to this feature and others highlighted the clear advantages of business education to certain practice areas and to those involved in strategic decision-making, and agreed that MBAs deliver a lot back to their firm or organisation. Some firms are less supportive of business education because they are, perhaps rightly, concerned that although they would potentially benefit from strategic management skills and their clients would appreciate more commercially focused advice, by encouraging their lawyers to study for external qualifications such as the MBA, they risk losing them to other industries.
New skills in a changing market
A possible solution is to combine business and legal training so that lawyers do not need to look outside the firm for a business qualification. Simmons & Simmons introduced an accredited MBA into its training contract three years ago. Currently, the MBA adds an extra year between the LPC and the training contract. As graduate recruitment and development partner Alex Brown explains, Simmons & Simmons worked with BPP Law School to tailor the MBA to its specific needs, focusing on five key industry sectors and including modules on the business of law firms and partnerships.
What was the rationale behind the Simmons & Simmons MBA? ‘We were looking to differentiate ourselves in a changing market by giving our lawyers new skills,’ says Brown. The Simmons & Simmons MBA follows the US model as it is introduced very early in people’s careers. ‘However, we are changing our programme because currently only about 50% of our trainees do the MBA,’ explains Brown, adding that the new format will dispense with the extra year and enable all trainees to qualify for the fully accredited MBA.
The new training programme involves a one-year accelerated LPC which includes a certificate in business. Extra modules delivered during the training contract lead to a diploma in business, and post-qualification modules enable people to qualify for the full, accredited MBA. Part of the rationale is to allow people to gain direct practical experience. What are the 65 or so people at Simmons & Simmons with the MBA bringing to the firm? ‘There is little hard data, but anecdotally the people who have done it are able to engage with clients on a different level,’ says Brown.
‘They are also trained to challenge the status quo. So we have a group at the bottom end of our business with the confidence and ability to question how we do things and whether we can do things better.’ He adds that they also enable client teams to offer strategic as well as legal advice.
Is this the corporate law firm of the future? Lawyers trained in law and business can offer clients more than just legal advice, and compete successfully with traditional firms and market entrants alike. This new breed of corporate lawyer will have more insight into business and businesses and, if they decide to leave private practice, they bring a combination of business awareness and legal knowledge to in-house legal departments and the wider business community.
Joanna Goodman MBA is a freelance journalist