Democracy in action or a needless distraction mired in press speculation? Top law firms are split on whether partnership elections are a good idea. Jon Robins reports
In the rather placid world of law firm politics, partnership elections can provide rare moments of drama. ‘SJ Berwin is about to step into the abyss,’ one commentator said in the legal press after it was announced last year that senior partner, David Harrel, was standing down.
While many firms will insist that partnership elections are a healthy show of law firm democracy in action, others see them as behaviour bordering on the reckless. ‘I believe that elections should be avoided and the new leader should emerge with the blessing of the previous senior or managing partner,’ argues Ronnie Fox, the partnership law specialist and former senior partner at City firm Fox Williams. ‘The old Conservative party system, under which the new leader emerged, is in some ways rather better than a public spat. I also feel that elections often produce the most popular candidate, but not necessarily the best one.’
Peter Cornell’s decision to stand down as Clifford Chance managing partner at the end of last year has already kicked off ‘fevered speculation’ – according to the press at any rate – within the global firm. There were also two big law firm election results in the run-up to Christmas, both claiming to achieve success through a degree of consensus. Guy Morton won a three-way senior partner race at fellow magic circle firm Freshfields Bruckhaus Deringer after the initial six candidates were whittled down to three – the other two were corporate partner Graham Nicholson and ex-Italy managing partner Philip Richards.
SJ Berwin had three of its most high-profile partners standing for senior partner: head of corporate Jonathan Blake, managing partner Ralph Cohen, and head of competition Stephen Kon. The firm agreed a joint-ticket management proposal, reported in the press as an attempt to ward off a potentially divisive election battle, and Mr Blake was made senior partner with Mr Cohen remaining managing partner in a beefed-up strategic role.
Despite every effort by the firm to make a smooth transition, the decision by Mr Harrel to stand down after 13 years led to five months’ speculation in the legal press about a successor. That is ‘very unfortunate’, reckons Mr Fox. ‘It is much better if these things are done quickly and quietly,’ he says. ‘It is distracting and also the character of the senior partner has an enormous influence upon the firm.’ However, he recognises that an election is almost unavoidable for larger practices.
Tony Williams, the former managing partner of Clifford Chance and founder of legal management consultancy Jomati, maintains that SJ Berwin’s attempt to come up with ‘a consensus slate’ was an efficient way to handle the process. ‘It was more a coronation than an election,’ he observes.
Mr Blake says avoiding division was not in fact the reason behind the joint ticket. He says: ‘I have a large profile in the City, especially in private equity, and I did not want that to disappear and become an internal manager. Working alongside a managing partner who would take care of internal issues while I deal with strategy is exactly right.’ He adds that the firm did not want to rush the election: ‘We would have preferred the press not to speculate, but it was important that the firm felt comfortable with the arrangement.’
Mr Williams is an advocate of partnership elections and went through the process at Clifford Chance. ‘There is a real benefit in a good election procedure, because it gives a successful candidate a clear mandate and clear authority,’ he says. ‘It also makes them spell out their manifesto. Then they can say, “you elected me on this basis, chaps, therefore, this is what I’m doing”.’
But he warns: ‘It is important that the election is done in a way that is not too divisive, and does not leave people massively demotivated and unwilling to put their head above the parapet on future occasions.’
At the end of last year, Eversheds elected managing partner David Gray for a second term in a formal uncontested election. ‘I do not think that firms should be frightened of elections,’ comments chairman Alan Jenkins. The firm had what he calls a ‘vigorously’ contested election three years ago, which Mr Gray won.
‘Looking back on it, one can say that it was a healthy thing – it got issues out into the open, fully debated, and I feel that it is right that there should be an open debate about management issues.’ It is easier to have that debate when the partnership is smaller, he says, because it can happen more informally.
The election battle from which Mr Gray emerged was described by one reporter as the ‘legal equivalent of [the film] “Reservoir Dogs”, in which Mr Gray and Mr Brown (Michael Brown, the London managing partner) engaged in a bruising bust-up’. The third partner who stood was Adrian Bland, who dropped out half-way through, which meant that Eversheds partners were faced with a choice of Gray, Brown or Bland.
Notwithstanding, there was some fairly colourful coverage in the press. ‘All this tends to get dramatised, but the reality is, certainly in our firm, there is none of the drama that is painted in the press,’ insists Mr Jenkins.
He describes the recent re-election of Mr Gray as ‘confirmation of the fact that law firm leaders need a considerable period of time, more than one term, to carry through the things that they had been elected to do first time around’. One legal magazine claimed that there were ‘huge rifts’ as a result of the personal styles of the two lead candidates in the election. Mr Brown has ‘worked very successfully’ with Mr Gray, since the election and ‘will continue to do so’, maintains Mr Jenkins.
Are the slick, uncontested elections examples of democracy in action, or are they far more controlled affairs? ‘When lawyers open these things up to debate, they are not stage-managed,’ observes David Temporal, a management consultant at Temporal Consulting. ‘Lawyers tend to get emotive about these things.’
So what is it like for lawyer-candidates to go through the election process themselves? It is stressful, acknowledges Mr Williams, who was elected Clifford Chance’s managing partner in 1997. ‘You have to stand in front of all your partners and lay out why they should be voting for you and not the other very good candidate,’ he says. There was not the usual lobbying and jockeying for position when he stood, not least because Mr Williams was based in Moscow at the time. Four potential candidates were slimmed down to two, who did a ‘David Cameron-style presentation’, presenting their manifesto to the partnership.
Peter Garry, a partnership law expert at the Kent firm Cripps Harries Hall, points out that the decision to hold an election is usually determined by the partnership deed. But he says some firms opt to change practice from what is prescribed in the partnership agreement through a consensus vote by partners. The larger the firm, however, the more difficult that is to achieve.
By contrast, many smaller firms have no such deed and everything is done through consensus. ‘People become senior partner until they retire from the firm, particularly where the firm has been founded by one person and it bears their name,’ he says. ‘They are almost always senior partner for life, and some of those firms have now grown quite large.’
At Eversheds, elections are conducted by secret ballot administered by the Electoral Reform Society. The contest itself is run by a committee of partners, acting as election overseers who deal with the society on the count. Alan Jenkins, who in 1993 was elected managing partner of Frere Cholmeley Bischoff, which later merged with Eversheds, says that elections should run to a tight timetable. ‘Whenever the wheels of the election are set in motion, in my experience people have already started electioneering,’ he says. ‘The formal structure follows the event rather than controls it. That is a fact of life, as you can see in general politics.’
There are often casualties of the election process. ‘Noses do firmly get put out of joint,’ says Mr Garry. ‘If somebody has advocated a particular strategy and the firm, as a whole, has chosen a completely different strategy in the hands of another candidate, then some people do take umbrage.’ He knows of at least one case where the losing candidate has felt no option other than to leave the firm.
As Mr Fox points out, ‘taking a management position in a law firm is a high-risk strategy’. He adds: ‘The larger the firm, the less likely it is that you will be able to maintain any practice or client following yourself. After you have lost a management position, it is hard to rebuild a career.’
Jon Robins is a freelance journalist