Clifford Chance's Peter Cornell Steps Down: Lessons Learned

End of an era?

Peter Cornell's decision not to stand for re-election as global head of Clifford Chance certainly feels that way, although as we've argued before, his timing is impeccable. 

Now comes an interview with The Lawyer in which Cornell reprises his five-year tenure and concludes with some words of advice for his (unchosen) successor.  As regular readers know, I subscribe to the theory that individuals forge events, not that events forge individuals, so it's worth pausing to reflect along with Peter at the transformations he's wrought at Clifford Chance.   (Full disclosure:  I've met Peter in person and have the utmost respect for him both as a managing partner and as a human being.)

First, let's review the bidding:  When Cornell took the helm at Clifford Chance in 2001, the firm was, to say the least, fractious and divided.  The recent merger with (acquisiton of) New York's Rogers & Wells left the firm over-indexing on its share of nettlesome and truculent personalities, and the disconnect between Rogers & Wells legacy eat-what-you-kill compensation system and Clifford Chance's UK-heritage lockstep was to prove an expensive, irksome, and distracting mess until pretty much this past year. 

Add to that simmering turmoil Clifford Chance's triumphant-at-the-time swoop in 2002 to gather up many of the people left on the street in Northern California when Brobeck imploded—a classic case of buying in at the top—and Cornell's hands were full.  Nor should we forget the revolt of the Italian partners in 2002, or the infamous leaked memo from associates about the pressure to produce billable hours.  That episode, perhaps more than any other, encapsulates the pressures on Cornell, so it deserves extended treatment:

"The associates' memo - dubbed 'Paddinggate' - was a particularly difficult moment. The memo, which was leaked onto the internet in October 2002, exposed US associates' morale as rock bottom. Even more damagingly, it said that pressure to bill could have led to a situation where bills were being padded. There has never been any suggestion that this was actually happening, but the mere mention of it got the world's business press salivating.

"Arthur Andersen had collapsed just a few months previously, and The Lawyer has spoken to a series of partners who candidly say that many felt they were facing something similar. Most admit that Cornell was admirably calm under extreme pressure.

" "I appreciated very early that we had to take this seriously," confesses Cornell. "It didn't matter that it wasn't a real story: this had legs and could do the firm a lot of damage. We had to close it down.""

So those were the challenges; what is Cornell's legacy?  (Understanding, of course, that there's no such thing as a "legacy" in a people-intensive and people-driven business; there's only, shall we say, a platform going forward from which to attract and retain the right people.)

First of all, Cornell has struck through the Gordian Knot of lockstep vs. eat-what-you-kill compensation with a partnership-approved referendum late last year to establish the principle of three different equity ladders for different global jurisdictions (reflecting inherent profitability differences), and which also puts partners on a triennial evaluation cycle, where they can be "frozen" at their current point-score or moved down and even accelerated to annual reviews.

Note that this was approved after a 2003 failure to get approval of another modified-lockstep proposal; so "coming back to the well" was not risk-averse behavior.   Cornell's reaction to criticism?:  "Criticism? It bounces off me pretty much."  Next time you're considering your own suitability for managing partner, consider this remark.

And the numbers should speak for themselves:  CC's PPP is projected to hit £850,000 this year ($US 1,515,000) vs. last year's £710,000 ($US 1,265,000).

But ultimately, the question of interest is how did Cornell go about achieving what he did?

It comes down to people. 

"Cornell still seems most comfortable talking about the intangibles. If anything, he seems a natural senior partner rather than a managing partner. Not for him the sliderule approach to cost per lawyer and profit margin; rather, he prefers to talk about whether the partnership is… well… happy."

Care to dimensionalize this?

"In a one-on-one situation he's very good," says one partner. "He doesn't get into details. He usually finds something of interest to you and you'll feel good about having the conversation. Pete's style is to absorb other people's views and not to indicate a view of his own."

How many times do we pay obeisance to the bromide that ours is a people-centric profession, but then fail to acknowledge the importance of the viewpoints of our people? Cornell is a counter-example.

So, after having taking Clifford Chance from, if not the rocks, at least the gathering storm, what are Cornell's parting words of advice to those who are, or aspire to, managing partner?  Pithy:

• Focus on the big things
• Extend your network—down to junior partners and associates
• Delegate
• Be consistent
• No bullshit
• Be thick-skinned

To those who still feel called to the challenge, all rise.

Posted by Bruce at January 12, 2006 5:48 PM | TrackBack
Posted to Cultural Considerations | Finance | Globalization | Leadership | M&A | Partnership Structures | Strategy

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