'Parachuting in' to Lead Firms May Be Next Lateral Trend
One of the last bastions of law firms operating as a profession—the near certainty that a lifelong partner of the firm would be the one at its helm—appears to be changing as a number of Pennsylvania firms in recent years have looked to outsiders to fill leadership voids.
"I think managing law firms is going to become a legitimate career path and, as that happens, just like you see CEOs move between companies, I think you'll see people move between law firms," Altman Weil principal Ward Bower said.
Bower admits he has been making this prediction—and arguing its benefits—for years without the trend ever really taking off. But the time may now be right, he said.
A number of firms have named a relatively recent lateral partner as their next chairman or managing partner, Bower noted. And there are a lot of 40-to-50-somethings in leadership roles whose natural tenure as leaders of about five to 10 years will expire, he said.
When the baby boomer generation of firm leaders begins to leave, the "heir apparent" might not be there or might not be ready to take over, Bower said. Those firms might start to look outside for their next leaders, he said.
"I think we will see movement away from the lifer automatically taking that position and it won't just be laterals," Bower said of the next generation of firm leadership.
While firms should "absolutely" still be focused on succession planning, Bower said, one result of that planning could be looking for leadership from outside the organization.
The idea of bringing in an "outsider" to have a leadership role in a law firm is far from unheard of. Pepper Hamilton hired Scott Green from WilmerHale, Stevens & Lee hired Temple University Health System Chairman Joseph "Chip" Marshall III as its vice chairman, DLA Piper hired former Linklaters leader Tony Angel as global co-chairman after he spent a few years at Standard & Poor's, and Thomas A. "Tad" Decker joined Cozen O'Connor in 2000 as the firm's managing partner after working in-house for several years.
The only one of those examples to move from one law firm to another was Green, who is not a lawyer. A law firm partner who possesses a leadership role rarely makes the move to immediately head up another firm.
That was until Ajay Raju, the former head of Reed Smith's Philadelphia office and former leader of the firm's business department, left the firm to serve as CEO of Dilworth Paxson.