Associates often complain that managing partners are elevated because they are excellent lawyers, whether or not they know anything about running a business.
But what happens when lawyers become CEOs of Fortune 500 businesses? According to Corporate Counsel, it’s more poop on a different stick:
Two lawyer-CEOs who were hired amid fanfare a few years ago saw their tenures end during the past year — each with a distinct thud. Last November, Charles Prince III, Citigroup Inc.’s chairman and CEO (and, earlier, its GC), resigned under pressure after four years at the helm. In January, Michael Cherkasky, the CEO of Marsh & McLennan Companies Inc. (and a former prosecutor), ended his three-year reign. Both were hired to tackle their companies’ ethical crises, and their legal expertise was cited as one of their virtues. They were praised for their handling of the legal quagmires, then hounded for months by investors demanding profits. So much for lawyers in red capes.
That sounds like classic American corporate culture. Making “money” for “shareholders” trumps playing it safe and covering your backside.
In fairness, it seems odd to take lawyers schooled in the ancient art of risk-aversion and then ask them to play corporate craps with the best CEOs.
Lawyers’ first, best use after the jump.
But, as every practicing attorney has probably figured out, lay people only want lawyers around when everything is going to hell:
David Nadler, who has written prolifically about CEO performance, says that lawyers are “good at crisis management.” They’re often effective at understanding and managing different constituencies. Nadler, who is vice-chairman of Marsh & McLennan, the giant insurance brokerage, which acquired his executive consulting agency in 2000, adds that the flip side is that generally lawyers are “less good at operations management, less good in people leadership.”
It really shouldn’t take an advanced degree to determine that lawyers are “less good in people leadership.”
Lawyer/CEOs seem to have the exact same problems that most Biglaw partners have. Interpersonal leadership simply isn’t a trait that Biglaw attorneys develop.
One of these days, some mid-tier firm is going to bring in a person with an M.B.A and nearly no legal experience to be its managing partner. And then we’ll really be able to see if top lawyers have the training and the temperament to run their own firms.
Can Lawyers Fly High in Executive Roles? [Law.com]