An unseasonal tale

With the announcement of a further raft of partner departures the sad death spiral of KWM continues. Despite the sense of inevitability surrounding the demise of this Firm, the whole story just seems worse at this time of year.  The harsh, and unseasonal, reality is that some people will shortly be their losing jobs and their livelihoods.

Theories abound as to root cause of the Firm’s collapse; some say the SJ Berwin/KWM deal was destined to fail culturally; others say it shows the inappropriateness of the verein structure; another body of opinion is that the partnership performance and reward structure had fault lines running through it.  Whatever the case, for me the abiding lesson of this collapse is about the nature of partnership and behaviour of partners as much as anything else.

The partnership model has served the legal profession well for many generations.  The principle of ‘pure partnership’ as set out in the Partnership Act 1890 was unchallenged for the majority of that time.  The market turbulence of the past two decades and the collapse of a number of Firms including Dewey & LeBoeuf and Halliwells have been the primary drivers in the LLP model now being the most prevalent model for UK Firms.  Some unlimited pure equity partnerships still exist and thrive but they are vastly outnumbered by two, three or, even, four-tier LLPs.

And yet regardless of the nature of the partnership structure, for me, individual partner behaviour is what gives firms their unique culture and, importantly, the resilience to weather the bad times.

Although it was an experience I would not want to repeat, working through the collapse of Andersen UK in 2002 gave me a real insight into how partners can behave in the eye of the storm.  Some partners came to the fore, straining every sinew for employees and clients; others decided to cut and run, working deals that may have served them well, but not necessarily the wider Firm.

So why do people do some people do the ‘right’ thing and others steer a different course?

I realise expecting partners to adhere to a common approach is at best unrealistic.  And the prospect of liability may drive some partners to behave in a way that even they may not have expected.  But for me, the glue that binds a partnership and the way through the tough times will always be the old-fashioned notion of a common set of values and principles.

Values are talked about a lot at firms but are not simply the laminated card on the wall or the page on your website. Values are in the DNA of a firm.  Values are the way that people behave. And values are the principles upon which partners, in particular, should fall back when time get hard.

But as a leaders how do you know whether Partners are playing their part and really bonded to the Firm and its values? In short, how do well functioning partnerships act?

In our experience, look for the following

• Partners attend partnership meetings – these meetings (and partner conferences) are the life blood of partnerships where views can be swapped and debated
• Partners have a voice and use it – does your executive team actively and consistently get real feedback from partners and do those partners say it ‘as it is’
• Partners build the fabric of the firm – do your partners willingly and enthusiastically train, coach and develop your people
• Partners share work and opportunities – do your partners pass work to each other in the interests of clients?
• Partners build the firm for the future – do they network assiduously and build your brand professionally
• Partners stand together – do your partners actively support one another and take ownership for solving problems?

Being a partner is not just about achieving a step at the top of a ladder.  It carries mutual and interdependent responsibilities in terms of role modelling and behaviour. If enough partners act in the way set out above, you have a vibrant spirit of partnership which will lead to partners doing the right thing should fortune turn.

Steve Lee, Partner, Aretai LLP

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