A Massive Turnover of Law Firm Leadership or Business as Usual?

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The Shift: Law Firm Leaders are Leaving Roles at an Increased Pace

Most industries, legal included, are facing an engagement crisis, with substantial portions of the workforce questioning whether their current job is how they want to spend most of their waking hours. Has that crisis hit Big Law leadership?

The past year or so has provided a high number of changes amid top management across the world’s largest law firms. Not all of these leaders are stepping down at the conclusion of their term and the days of seeking multiple terms seem to be slowing. When a transition is announced, a single leader is often being replaced by two or more people. Do firms need a different type of leader or governance model post-pandemic? Could law firm leaders just be burnt out?

The Conversation

Amid private conversations with law firm leaders and other market observers, the sheer number of leadership changes is often referenced. And some question whether the job, during and after a pandemic, is just too exhausting. To be sure, there were a crop of firms in 2020 that saw leadership changes and many of those leaders are now seeking and getting a second three-year term. But at the same time, we are seeing both managing partners with multiple terms under their belt and those who are midterm stepping down.

“We will see far fewer major law firm leaders have extended terms. The burnout risk is too great and the pressures too significant," Paul Weiss chair Brad Karp said over the summer.

As my colleague Patrick Smith reported in July, the role of the leader, in many ways, has transformed: A faster pace. More laterals coming and going. More mobile clients. Global political and domestic social happenings that require public positions. Hybrid work. Remote work. Artificial intelligence.

As of the writing of this briefing, law firm leaders across the globe were grappling with whether and how to speak out on the war in Israel. The new issues never slow down. Though, perhaps, that’s always been the case for any leader?

Kramer Levin co-managing partner Howard Spilko told Smith the pandemic required more than just reacting to change, but rather required a change in the leaders themselves. Spilko said the past few years demanded increased “empathy and emotional intelligence” on the part of leadership and the circumstances provided a platform for the new leaders to showcase that more modern style of leadership.

“It tested us because we had not been in this position before and had to use different leadership skills than either of us had deployed before,” Spilko said, referring to himself and his co-managing partner. “And different ones than we had seen before.”

Not all leaders are waiting until their terms end to make a change. In January, Reed Smith managing partner Sandy Thomas handed over the reins to Casey Ryan after he found an opportunity at a nonprofit that he said was too good to pass up.

“I’m in a point in my career where I just want to contribute in a different way,” he said at the time.

The Significance

Leadership is obviously a critical driver of any organization, and clarity and stability in leadership may be even more important. In many of the recent leadership changes, managing partners or chairs were stepping down after decades and multiple terms. That can be healthy for any organization. Fresh perspectives and ones that meet the leadership styles of a modern workforce can be revitalizing. Change always brings risk, but most firms have spent years cultivating their leaders-in-waiting, making for a much smoother top-level transition.

It’s the growing number of leaders who are stepping down midstream who add a new element to the leadership discussion. Hopefully there is a natural successor. The role of law firm leader has not only evolved but become more critical than ever given the work that must be done on things like maintaining culture and keeping an engaged workforce—major issues that need to be priorities from the top. So while leadership succession has always been important for firms to consider, it’s an acute issue now and one that may arise faster than expected for individual firms.

The Information

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The Forecast

Given the increased demands on the role and the growing number of leaders who may face burnout and look to leave, firms may want to assess their leadership succession plans and perhaps their governance structure to see if a different term limit makes sense. Developing the next crop of leaders so someone is ready to step in if the current leader steps down early will be important.

It will also be important for firms to assess the type of leaders needed to drive an organization forward in a post-pandemic world. Emotional intelligence, transparency and the ability to connect the work a firm does to a career with purpose will all be critical. The ability to deal with change management and innovation will also be increasingly important amid the advent of generative AI. And none of this, of course, means moving away from pushing for a high-performance culture.

Law firm leadership is, at its core, about psychology: Managing and guiding a core asset that comes in the form of people and leading them through a rapidly evolving landscape. Law firm leaders are people, too. Their institutions will need to be looking out for them in this new world order.

Gina Passarella is SVP of Content at ALM, including oversight of The American Lawyer, Corporate Counsel, Law.com International, Legaltech News and The National Law Journal. She also works closely on Law.com Pro and GLL Advisers. Gina's coverage focuses on the business of law, client relationships, law firm strategy and the future direction of the profession. She also has a particular focus on mental health in the legal profession. Contact her at [email protected].