In Philadelphia, the fifth most populous city in the United States*, leadership shifts at major law firms happened around the same time. After three decades, the “changing of the guard”, as it were, served as an example for the rest of the country on how to gracefully exit the legal (and business) management stage—as well as how to most effectively set up worthy successors.
Since 2005, the Philadelphia’s Business Journal reported last year, there have been five years of rapid change at the largest firms. Seven of the area’s eight largest firms have ushered in new leaders since that time.
What’s changed in the way such partnership restructuring occurs? Despite the fact that, in the last decade, firms have become more corporate-like in that select partners (or “leaders”) make strategic decisions, firms are still partnerships, notes Jeff Blumenthal, Staff Writer at the PBJ. “[It] makes buy-in essential, when finding a leader.”
And because there is still no isolated from-the-top-down decision-making, new partners will have to undergo the usual scrutiny. “Law firms are not hierarchical,” says one head of his firm, who was stepping down. “Partners have to have confidence in a new person.”
That means that even CEO’s have to win the other partners over. In a nutshell, the partners have to believe that the successor will know how to do the job.
In two large firms, transition committees were formed well in advance of the actual leader’s departure. Dechert’s firm met with all the firm’s partners to form a consensus. “…contested elections are often divisive for partnerships,” said the Dechert spokesperson.
To replace Arthur Makadon (pictured) as chairman, Ballard Spahr’s partnership elected Mark Stewart. Stewart was given the thumbs-up only “after its transition committee had considered several options”. We also learn that Stewart “was the only choice on the ballot”. In essence, his “ascension” was approved by the partnership.
In the case of both firms, each successor was a protégé of their predecessor. Another similarity: both are a bit over a decade younger, and highly experienced in management. “Both have spent their entire careers at their current firm,” notes Blumenthal. Additionally, in each case the firms have arranged it so that so that the successors will have more than a year to make their transitions.
Stewart , formerly strategic planning partner for Ballard Spahr, prepped for the new position by acquainting himself with the vision and practices of existing partners in the firm’s offices nation-wide.
Stewart is replacing someone considered “a very strong personality”. “Arthur is an enormous personality — the most influential partner at the firm certainly since I’ve been here,” Stewart said. “I don’t have that, so I’ll have to be a consensus builder.”
What he will have is the support of an icon who is still too young to retire, and who will, in all likelihood, still be active within the firm. That’s one of the reasons that successful transition periods are so long. “If [a] leader feels like [they] are being pushed out, [if they are] uncomfortable stepping out of the spotlight, or unhappy with the choice, it can create tension within the partnership,” says a local headhunter. To read more, go here: http://www.bizjournals.com/philadelphia/stories/2010/06/14/story4.html For a list of the “best Philadelphia firms to work for”, go here: http://www.averyindex.com/philadelphia.php
*Philadelphia, home to many Fortune 500 companies, has its own stock exchange.