Adviser focus | Spring 2018
The In-House Lawyer (IHL): How do you create a clearer picture of what Pinsents is doing on diversity?
Richard Foley (RF): You’ve got to be consistent in highlighting
it as a priority. We’re clear about the programmes we have and
we’re vocal about successes. We’ve just been ranked second of
all UK corporates in this year’s Stonewall index for the second
IHL: Is there not concern these rankings are getting crowded with law firms? Sixteen law firms out of a 100-strong index defies credibility.
RF: I don’t think it does. We were the first ones in there, which we’re really proud of. It’s also an important business differentiator. We spend a lot of time talking to other law firms about LGBT and we’re starting to do the same for gender.
IHL: What is Pinsents’ female partnership ratio?
IHL: That’s not great, is it?
RF: When you’ve got a partnership of 430, to move nine percentage points over four or five years shows significant improvement. We’re starting to see the promotions reflecting the demographics of those up and coming in the business. There’s so much good activity going on, but the enemy is cynicism. The numbers aren’t rubbish. They’re not. They’re a consequence of where you start.
IHL: In terms of progress you are improving. But you’re an outlier.
RF: Yeah but a lot of law firms [are trying] because they’d be nuts not to be working at this…
IHL: … then they’re nuts because the numbers aren’t moving.
RF: It might take time to see a real shift, but lots of firms are working hard. We have a nine-person board – five men, four women. Other boards might be at about 50:50 too… Five or ten years ago, they’d consist entirely of middle-aged men.
The next big thing is BAME [black, Asian and minority ethnic] and social mobility – law firms are nowhere on this. How long will it take us to get a better demographic across all of those? Decades.
IHL: Isn’t there a middle ground between decades and one year? Say, five to ten years?
RF: It’s about taking active steps to address it, starting now and however long it takes.
IHL: How did you improve?
RF: By relentlessly spreading the message and ensuring it pervades everything. We had to look at where we were losing our female talent. Three things helped: 1) we put formal mentoring in place to address an absence of role models. 2) The promotion of worthy people regardless of the fact they happen to be on maternity leave – partnership is a 20-to-30-year thing. I’ve forgotten the third…
IHL: Lock the doors?
RF: Lighten up, mate! [Laughs]. Third, external validations matter. When the HR team launches a new initiative that gets externally validated, it gives that lift. This stuff is hard yards – calling people out if they’re doing the wrong thing. Occasional recognition can be really helpful.
IHL: How much of it is pressure from clients and how much is the firm leading itself?
RF: Around LGBT, it’s definitely the firm leading. Gender is much more nuanced. We were losing a lot of talent to in-house, so how was it that these big corporates could manage female talent in a way law firms couldn’t? That got us thinking. Also, if you keep fronting up to the general counsel who is a woman and you’ve just got a load of blokes, you’re going to struggle. When we [acquired] Brook Graham [the diversity consultancy, in 2017], clients responded positively.
We take our values and make them strategic imperatives. If these things just exist in some parallel universe, alongside the strategy of our business, we’re wasting our time.’
IHL: Over the last two years, what were Pinsents’ most significant developments?
RF: The success we’ve had with the offices we’ve opened outside the UK – seven in the last three years. They’ve all made either as good a start as we hoped or better. We were clear about what we were going do in each jurisdiction. Our business is built around five global sectors; our vision is to have a market-leading position in those. In Australia we went in around infrastructure and energy – that’s it. In Jo’burg, it was the same; in Düsseldorf, it was energy. We went into Madrid around tech; Dublin was tech and financial services.
IHL: How profitable have you found that expansion?
RF: If I leave Dublin to one side because it’s so new, they’re all performing better than modelled. The profitability of our business has increased over the last three or four years: revenue is up over 30% and profitability almost 55%, despite those investments.
IHL: Do you have foreign offices matching or at UK-comparable levels?
RF: Yes. Australia is one of them. It outperformed a number of other business units across the piece.
IHL: How much scope do you see in Dublin?
RF: We took the decision before the referendum. We felt it was an interesting market around funds and tech. We also believed our innovation agenda would be interesting in the Irish market. Will it be a 200-lawyer office? Doubt it. We’ll get in with a core team and build momentum. That’s one of the lessons we’ve learned: you’ve got to build quickly.
IHL: You’ve got a window…
RF: Absolutely. You’re the big, shiny, new firm for a couple of months and then people forget about you, unless you’re doing the next thing and the next thing and the next thing.
IHL: Tracking the firm’s results over the last three to five years, you’ve been a bit ahead of your peer group…
RF: We’ve been a lot ahead.
IHL: So what’s driven ‘a lot ahead’?
RF: The biggest thing, bizarre as it may sound, is we try to take our values and make them strategic imperatives. We think of it as our ABC – Approachable, Bold and Connected. We took a decision three years ago, when I came into this role, to say: ‘If these things just exist in some parallel universe, alongside the strategy of our business, we’re wasting our time.’
We ask ourselves all the time: ‘What would be the bold decision here?’ I genuinely think we have benefited from decisions being made at various levels all around the same template. And our brand has certainly improved.
IHL: It’s surprising the brand doesn’t project more in the industry, isn’t it?
RF: Our City brand isn’t where it should be, but as far as clients are concerned, what we’ve done around investing in people, process and technology, and the awards we’ve won (the Law Firm of the Year award from Legal Business [in 2016]), shows real progress. We’re a long way from ‘Pinsents who?’ I don’t hear that anymore.
IHL: Imagine we are potential clients. How would you convince us Pinsents is different and we should instruct you on a seven-figure job?
RF: If you’re looking for technical excellence, then we’d lead with: we have more number-one rankings than any other UK law firm.
But one of the biggest differentiators is what we’re doing around innovative service delivery. There’s a lot of smoke and mirrors, but when you drill down into it, only a relatively small number of firms are making substantive changes and we are one of them. That is one of the biggest challenges for law firms like ours because, while we’re doing some amazing stuff, it’s still relatively small. How do you scale that? But I start most conversations with clients on background values and culture: ‘Tell me what defines you. What defines your business?’
IHL: Isn’t that a hard sell? These values are usually just mom and apple pie.
RF: There are various businesses who are much more interested in talking about that than simply: ‘You’ve got some great comparables.’ We talk to them about talent management, inclusive environments, how you motivate – they’re interested in those conversations. I don’t think it’s a difficult sell provided you’re genuine.
IHL: How do you prove that?
RF: They see the way you interact, how we push back: ‘You want
this on Monday morning? We’re going to destroy somebody’s
weekend – are you really sure?’ You have those conversations and
it’s amazing how often they’ll go: ‘Actually, we don’t need it Monday.
IHL: Is flexible working an easy sell?
RF: No. It’s a really easy sell to 10-20%, almost impossible to another 10-20% and I just focus on 60-70% in the middle. If you shift them all two, three or four percentage points in the right direction, you can transform your business.
IHL: What are the hardest bits of going flexible?
RF: Everyone’s averse to change. It’s what I call ‘too busy putting out the fire to call the fire brigade’. People haven’t got time to step back and think of the different way.
IHL: Pinsents is further on the New Law curve than most peers – what have been the breakthroughs?
RF: We learned early that you can take something developed in one area and adapt it relatively easily. We have a suite of products that we brand as SmartDelivery, which is broadly around automation, process, technology and people. That started in real estate, morphed quite quickly over into the financial services, where it’s probably going at its strongest, and is now gradually being used more in the infrastructure sector and energy. You get these pockets of opportunity, which is why we didn’t embed our R&D team into sectors.
IHL: It’s centralised?
RF: Yes, primarily in Glasgow. It’s made up of 35 now – knowledge engineers, data analysts, computer scientists – they’re our own in-house R&D team and they work with the legal teams.
IHL: Centralising helps?
RF: Definitely. We took the decision three years ago that we were going to develop our own technology. We had conversations with all the providers. We trialled products and, time and time again, found what we had developed ourselves was a better product, simply because it was legally-led, rather than just technology-led, which you had to adapt. That’s gone well. We’re the only law firm that’s developed in-house its own machine-learning product. The challenge is scaling that.
IHL: Can you pool it with other law firms or providers?
RF: We’re having some interesting conversations at the moment. That has to be the way.
IHL: More likely with law firms or with other providers?
RF: More likely other providers. Law firms are innate competitors. But you innovate best under constraint. If you go to a team and say: ‘think of re-engineering the way you deliver this banking transaction’, unless you have enthusiasts on a good and quiet day, it’s not happening. Go take on a piece of work, at a fixed price you know you’ll lose your shirt on if you do it the old way, then it’s amazing how innovative people become.
We’ve learned a huge amount from the [sole supplier] Balfour Beatty and E.ON arrangements we have. They’ve been spectacularly supportive. We spent a lot of time looking at where all the cost blowouts are. Hot-house a team and quickly you come up with solutions.
IHL: Are you disappointed the Balfour partnership hasn’t generated another half-dozen comparable deals?
RF: A little, if I’m honest. We’re doing it as well as anyone else. The number of conversations you have with clients and then they get to: ‘Couldn’t do us 5% off your rates?’ One of the big, big wins to law firms and our clients is if we could get a collection of businesses to work out why you consistently hear from general counsel ‘law firms are not innovative enough’ and you consistently hear from law firms ‘clients are never brave enough to do something different’. They’re both genuinely held views, with loads of examples – how can that be?
IHL: Everyone’s rubbish?
RF: [Laughs] It’s really curious. There’s this sense building up
among the big law firms that clients talk a good game, but they’re
not getting on with it and [clients] are saying: ‘Law firms talk a
good game, but scratch the surface and it’s not there.’ There’s a
IHL: How would you describe your style as a leader? And what’s your biggest strength?
RF: I talk too much. But I’ve been lucky throughout my career. I’ve been surrounded by talented people. My style is to seek to motivate, enthuse and empower. I say to the business: ‘If you’re looking at me for the answer, we’re in a world of trouble. We employ 3,100 people. You give me any five, ten, 20 of them and they will outperform any one or two superstars in our business or any other business.’
My style has always been that our default setting is share everything. We might notify the partners first, but more often than not, the email that goes to the firm will be the same. We let our people know that it’s their firm, they can make a difference and it would really, really help if they made a difference, because that’s what drives a business forward.
IHL: Apart from talking, what’s your biggest fault? And what’s your biggest strength, because you ducked that with a humble brag.
RF: I get overly committed. Things that I shouldn’t worry about that much really, really get under my skin, and I can be too passionate about an idea and that makes it difficult for people to say: ‘Richard, are you sure you want to do that?’ Strengths? I hear in appraisals that I’m the same with whoever I’m talking to. Whether people like what I’m saying, they’re sure that I believe what I’m saying.
IHL: What do you think the firm needs to achieve in the next couple of years?
RF: We’ve got to continue to grow. We have to get bolder around innovating in service delivery. I’d like to build our reputation or brand for the type of business culture that we have sustained – I’m deeply passionate about that. If we are bolder, we’ve got to accept we will get some stuff wrong. Maybe there won’t be law firms [in ten years], maybe they’ll be legal businesses or legal service providers. It will be radically different.
Maybe there won’t be law firms [in ten years], maybe they’ll be legal businesses or legal service providers. It will be radically different.
IHL: Is there scope for much more scaled-up acquisitions? Would you look at something like an Elevate?
RF: I don’t think you can build it organically. To deliver £450m worth of revenue in a different way – are we going to do that with 35 computer scientists? Absolutely not. That tipping point may come where you collaborate. You might become financially intertwined around a product. The old-fashioned view was law firms are competitors or they merge. You hate each other or you get married, nothing in between. Different ways of collaborating with different players in this market – we’ll see more of that.
IHL: Do you see any expansion opportunities in the US? You had the Thelen Reid [Brown Raysman & Steiner] venture.
RF: That’s interesting because at the time, that was ground breaking. Back in 2001/02, setting up this separate JV – it didn’t work in the end, but it was interesting to try. At the moment, we’re comfortable where we are with the US.
IHL: Does the Eversheds Sutherland merger change the equation?
RF: No. I haven’t spoken to Paul Smith or Lee [Ranson] about that for a while. I’m sure it’s a good deal, but it’s not something that makes me think: ‘Pinsent Masons needs that!’ We’re very comfortable with the way we do associations. Will that forever be the case? Almost certainly not, but it’s not on the radar now.
IHL: It’s been a good run leading the firm. Is it in the bag for the second term?
RF: My term comes up toward the end of the year. We’ll see. I love the job. I’ve really, really enjoyed it. The firm needs to think about what it needs going forward. That should give it an idea of the sort of person it wants to do the role and then you see what happens.
I’m the same with whoever I’m talking to. Whether people like what I’m saying, they’re sure I believe it.
IHL: So that’s senior partner speak for ‘it’s in the bag’.
RF: [Laughs] No mention of bags as I recall.
IHL: Have you achieved everything you wanted in your first term?
RF: No, but if you’d asked me three and a half years ago: ‘Would you be happy with over 30% growth on your top line, about the same on your bottom line, seven new offices and how much our brand has improved?’ Yes, I’d have taken that. Haven’t gone grey yet, I’m carrying an extra kilo or two, but I haven’t got a medical for another month. I’m pretty comfortable.
Hamish McNicol and Alex Novarese