Performance Leader Podcast: S3 Ep 5: Neville Eisenberg on Leadership, Strategy & High Performing Firms

Ray D'Cruz
Performance Leader

Our guest on the Performance Leader podcast is Neville Eisenberg. Neville grew up in South Africa, where he qualified as a lawyer. After gaining his Masters in Law from the LSE, he joined the London Corporate Finance Department at Berwin Leighton in 1989.

He was made partner in 1995, joined the board in 1996 and was elected managing partner in 1999. Neville oversaw Berwin Leighton's successful merger with Paisner & Co, to become Berwin Leighton Paisner. During his 15 years as managing partner, the firm grew its revenue by more than five times, more than tripled its profit per partner, and grew from two offices to 14 offices in 11 countries. In that time, BLP became known for pioneering innovation in legal services.

After stepping down as managing partner in 2015, Neville became senior partner until the firm's US merger with Bryan Cave in 2018. His final act at BCLP was to set up and run BCLP Cubed, a platform for delivering routine legal services at scale.

In this podcast, Neville talks about his time as a leader. We discuss his interest in strategy and the value of democratizing strategy in firms. We delve into what made BLP innovative, including how Lawyers On Demand was born. We cover high performance firms, building a feedback culture and having difficult conversations. I hope you enjoy listening to a professional services leader who really understands the power of strategy and culture.

Podcast Transcript

RD: [00:02:06] Neville, thank you for joining us on the Performance Leaders podcast.

NE: [00:02:13] Thanks very much for inviting me, Ray.

RD: [00:02:16] What have you been doing since leaving the BCLP?

NE: [00:02:18] Well, I left at the end of July last year, 2022, and I've been doing a really interesting mix of different things, some consulting for law firms and also for investors and potential investors into the legal sector. But mainly I've been investigating and promoting an idea I have about what I think the legal services market needs in order to address what I see as a disconnect between the demand side for legal services and the supply side in particular for routine legal services. So based on many conversations I've had with particularly large corporate and institutional buyers of legal services, they tend to be very happy with what's on offer for all their complex legal needs. But when it comes to routine legal services, they are far less satisfied with what's on offer in the market. And I've been looking at different business structures and groupings within the legal sector to see if I can get the support for a new grouping to come together in order to address that disconnect, which I think I've identified.

RD: [00:03:39]  You became a managing partner at a relatively young age. Can you share how you came into the role?

NE: [00:03:45]  So I was fortunate to have a very significant client during the 90s, a corporate client. I was doing M&A and interesting corporate transactions for them all around the world. And this was one of those wonderful clients that would involve me in all dimensions of their corporate activity, including some of their strategy planning. And in the course of participating in those sessions with that client, I learnt a bit about corporate strategy and corporate planning, business planning, and also had some contact with the management consultants that they were using to help them with that project. And I developed this growing interest in corporate strategy. I'd been invited to join what was then called Berwin Leighton's Management Board in 1996, and began to talk about how we needed to professionalize our strategy for the law firm. And eventually the board said to me, 'well, if you're that interested in strategy, why don't you work up a new strategy for the firm?' So at the beginning of 1999, I began to work on that and interviewed all the partners and put quite a lot of work into developing a new strategy document with a view to presenting that to the partners at a partners' meeting, which was arranged for the end of 1999. Just before their partners' conference, the then managing partner of the firm decided that he'd had enough of that role, so he indicated he was going to step down. And there was a need obviously, to elect a new managing partner. And I was encouraged to put myself forward, even though I hadn't planned for that at all. And so various things came together, the opportunity to present a new strategy, the partners conference and this opening in the managing partner role. And to cut a long story short, it was a contested election. I was the change candidate, if you like, and the strategy was adopted and supported by the partners. And I became managing partner at the very end of 1999.

RD: [00:06:08] I know from your work history and from our discussions that corporate strategy is something that's really important to you. You mentioned how you came to be exposed to corporate strategy in the first place. What was it about strategy that really grabbed your attention?

NE: [00:06:23] I think the prospect and the opportunity of moving an organization from A to B, from where it is at the moment to a new destination, fascinates me hugely. And of course, the opportunity with moving an organisation, is the opportunity to create increased impact of that organisation in the marketplace and value for its stakeholders. So for a law firm, there were multiple stakeholders: the owners, the partners there, all the other associates and staff that work in the business, clients, of course. I find it especially thrilling to be able to inspire people with a vision and then collectively execute on that together in order to travel on that journey from A to B.

RD: [00:07:16] And what sort of methods or processes did you use to engage fellow partners in that change journey? Because we know that these organisations are diverse and complex and getting everyone heading in the right direction can be really difficult.

NE: [00:07:30] It needs to start with a good vision. One has to have that inspiring, aspirational vision or objective which people can relate to and which acts as a guiding beacon for the organisation and also as a set of guardrails for the more detailed strategy and business planning that needs to follow. So in the early years at Berwin Leighton Paisner, because shortly after I became managing partner we had a merger between Berwin Leighton and Paisner & Co, became Berwin Leighton Paisner, and we put in place a vision which was to be the most respected law firm, deliberately not the biggest, not the best, but the most respected law firm. And then we had some, taglines to that vision, which was always to exceed client expectations and to provide the best place to work for everyone in the firm. And for many years, that vision statement and those concepts performed a really important role in engaging the partners, but indeed everybody in the firm, in everything that we needed to do in order to move in the direction of realizing that that vision. I think it's important to communicate constantly because what I found is that people can be tempted to adapt their vision slightly to meet whatever they believe their particular objectives in their department or in their area of the firm or their own concept. So one has to be quite disciplined with the vision. One has to keep communicating, keep explaining. And of course, one has to continuously provide evidence of how one is successfully moving in the direction of realising that vision.

NE: [00:09:23] But moving on from vision to the more specific question you asked about strategy. I've always believed strongly that neither top down nor purely bottom up strategy processes work. I think it has to be a combination of the two. So one needs a leadership team with a clear idea of what it is they want to achieve in strategic terms. And you also need to give everyone in the organisation, and I do mean everyone, an opportunity to become engaged in the process of developing a new corporate strategy. And we had a huge exercise in BLP where we did that. We called it Project Leo. It was spread over a period of about four or five months. We put lots of groups together with people represented, partners, lawyers, business services, staff, a range of different people in each of these groups. Each of them had the opportunity to discuss different aspects of the firm's strategy and eventually it was all combined into developing a new strategy. But the consequence of that democratization, if you like, of the process, was that for many years people were highly engaged at all levels of the firm in working hard to realise that strategy, and we enjoyed tremendous success with it.

RD: [00:10:48] That idea of democratizing strategy is something Professor Gary Hamel talks about quite a lot. You've mentioned moving beyond the partners and talking to everyone. His view on that would be, well, that makes a lot of sense because that next generation of people you're talking to are the people who are going to live that strategy and then be responsible for taking that to the next stage as well.

NE: [00:11:10] I think that's right. And I think also the sense of empowerment that people feel from having been told that their views count and giving them the opportunity to participate in a real sense in the development of the firm strategy and business planning and enables them to take on a degree of responsibility in making things happen, which otherwise might not be the case, particularly with more junior people or in law firms where typically, traditionally, lawyers have really been in control of everything. And there has been a bit of a sense that business services staff are there to take instructions and execute. But if one gives them an opportunity to participate in the business planning process and the strategy process, it empowers them to play a far more active role in the success of the organisation, which is hugely to its benefit.

RD: [00:12:05] You're something of a trailblazer when it comes to delivering legal services differently in your time as managing partner. Why and how did this emerge as an opportunity?

NE: [00:12:15] I think partly I've always regarded legal services as a business like any other business services line, and I've never been too hung up about the need for it to continue to be delivered in the traditional way or for it to be a calling. Although, of course, I respect people who feel strongly about that. But so I've always been interested in how law firms can become more progressive business organisations in order to deliver better value for clients. But in a more specific sense, shortly after I became managing partner, we had the opportunity to create a joint venture with one of the big four in the employment law space. So there had been some research in the market that the point at which small businesses most often fail is when they start to employ people, because the complexity in the business, therefore the cost within the business, increases in a step change. And we therefore thought it might be interesting to develop, and this was in the very early 2000s, so quite a long time ago, to develop an online product which would help small businesses employ people. So an employment agreement, and then gradually over time, we developed a whole package of services around that. And it was a subscription service. So any small business could go online, and for a relatively small fee, download an Employment Agreement and all the other documents and registrations, etc. required to employ someone. And it it took off in a remarkably successful way. One of the big banks included it in its small business package and it had tens of thousands of subscribers. But by the time the global financial crisis hit, the business began to lose steam a little bit. And we eventually sold it.

RD: [00:14:37] That in itself is quite remarkable.

NE: [00:14:40] It is remarkable. But what it did do was open my mind in a very significant way to the fact that one can deliver legal services in a completely different way. One can reach completely different audiences by structuring the delivery and the presentation of the service in a different way from the way law firms traditionally do.

RD: [00:14:37] And then the firm you led helped create Lawyers On Demand.

NE: [00:14:40] Well, absolutely. So as that business faded, so we saw the emergence of a new one, Lawyers On Demand. And what's interesting there is that we never planned to set up a new business when we started it. The reason we set it up was because we found in 2007 that we were getting an increasing number of requests from our clients for secondments from the law firm and some of them we were able to satisfy. But many of those requests we weren't able to satisfy. So someone in our HR department came up with the brilliant idea of putting together a small group of lawyers who are happy to work on a sort of temporary basis for in-house legal departments. And when we would get a request from a client for a secondment if we couldn't satisfy it from within one of the lawyers within the firm, we at least could say to that client where we have this pool of lawyers, would you like one of them instead? And slightly to our amazement, this proved to be hugely popular. So we gradually grew the pool and then at a certain point, about six months or nine months later, after setting it up, we realized - this was a real light bulb moment - that we could ourselves within BLP, bring those lawyers in to help us service peaks of demand within the firm without adding to our permanent payroll cost with permanently employed lawyers. So quite rapidly we became Lawyers On Demand biggest customer and this business sort of grew and grew. we were, of course, at that stage the first law firm in the world to set up a flexible staffing business like this. And we had hardly any competition in the market. The only other one that I was aware of at that time was Axiom, and they only entered the UK market for a short while after we launched Lawyers on Demand.

RD: [00:16:43] Is something in the strategy and culture that you were nurturing that allowed these ideas to come through? Because a lot of other professional services firms, the ideas don't come through like that. Maybe the ideas don't come up in the first place, maybe they come up, but they're not advanced. Is it something about the environment that you're trying to create that helped?

NE: [00:17:02] So I'll come back to a point I made previously, which I think is very important, which is that people outside the partners did feel empowered in our firm to think creatively and to come up with interesting ideas for the firm and also to speak up. If they had these good ideas in the knowledge that they wouldn't get shot down. So people were were felt able to put their heads above the parapet and come up with these interesting ideas. And secondly, I think there was also, you know, as managing partner, I felt a responsibility to the firm where interesting ideas came along to test them out and in a sense provide, you know, provide the an environment where we could test different things. And we tested lots of things. Some were successful, some were not successful.

RD: [00:17:53] A lot of professional services firms talk about being high performance firms. What does that expression mean to you as a managing partner or former managing partner?

NE: [00:18:00] Well, I think one has to start with profit, particularly profit per partner because partners are the owners of the business and there is perhaps no more reliable measure of performance than a high level of profits per partner. And that also enables so many other things to occur within the firm. It, of course, drives high quality recruitment. It inspires high quality juniors to apply to the firm. So it's really important, but it is a bit one dimensional as a measure of high performance and success. I think one has to be really focused on measuring other dimensions of success as an organisation. So of course whether clients expectations are being properly met and hopefully exceeded is critically important. One has to make sure that one has good values and living up to those values, that one has real purpose as an organisation. And I think in recent years having a clearly defined purpose and in particular providing evidence to all staff within the firm that the organisation is living up to that purpose and investing in its values and in its purpose is increasingly important. And there's another thing which I feel is really important, very hard to measure, but I was always a great believer that in order to be a high performing organisation, the firm needed to be perceived both internally amongst its people who worked there, the client community and the wider legal and business community as being an organisation that had real market momentum. So how does one measure market momentum? I never found a single way of measuring it, but one can measure it in by looking at a whole range of different aspects of business performance in order to determine whether one has the feeling that an organisation has a market momentum. Top line growth is part of it. Positive press. Winning market recognition through awards and directory placings. The type of people that one is recruiting. The attrition rates within the firm. The feedback from clients through structured and informal feedback programmes. All of these things, I think, go towards indicating whether a firm has market momentum and there is then a virtuous cycle within the firm where performance keeps going up. People feel proud to be associated with the organisation. They prepare to really commit themselves and work hard to achieve greater success. Clients, of course, respond to that, and these things all work together to sustain and improve a high performance firm.

RD: [00:21:08] One of the areas that we're very interested in at Performance Leader is this idea of feedback and building an honest and open feedback culture. What sort of things did you do to build that kind of culture?

NE: [00:21:20]  I think if one is going to drive performance, if one's going to achieve a positive culture of feedback, then people need to feel, they need to care. They need to feel empowered to speak up. And of course, they need to be appropriately incentivised to perform. It goes back to this sense of being in a democratic rather than hierarchical environment, where people give instructions and are more command and control type environment, which I never found particularly inspiring. But I think the most important factor in achieving a positive feedback cycle is that the leadership in the firm appreciate the importance of listening and do listen. So that when people do speak up and provide feedback, they don't necessarily need to feel that all their suggestions are going to be followed or that everything they say is going to result in immediate change. But they do need to feel that the leadership of the firm is prepared to listen and integrate the views of people no matter where they are in the organisation, into the management of the business and the future business planning of the business. And I think if it's that can be achieved in an organisation, but people do need to appreciate that one needs to genuinely listen. I think too often people pay lip service to the importance of listening without actually doing it in practice.

RD: [00:22:56] As managing partner, you must have had many difficult conversations along the way as well. What advice do you have for managing partners or department heads who need to have difficult conversations with their colleagues?

NE: [00:23:08] So I think the first important thing for difficult conversation is to be well prepared. I mean, three P's: prepare, prepare, prepare. It's always pretty obvious when someone going into a meeting like that isn't properly prepared. So that's the first point. The second point, of course, is no matter how difficult the conversation, there is almost always an opportunity to show empathy. In a difficult conversation, you want to be very clear, because people often don't hear what they don't want to hear. And therefore, one has to be clear, and one almost certainly needs to find an opportunity to follow up and repeat the messaging in order to make sure that people have understood. And wherever possible, I found it useful to have both a stick and a carrot. And the carrot bit is the empathy bit. So when one needs to impart the difficult message, be clear as to what the consequences will be if things don't improve. But then also, ideally, if possible, certain conversations it's not possible, but if it is possible, show people what the upside could be if things change. Very important. And I think people often forget that part of the conversation. They so focused on getting the difficult messages right. They don't realize that one can also provide an upside. And as long as one's care about all of that, I found that tends to work quite well.

RD: [00:24:33] What's your advice for managing partners or senior partners considering changing the partner reward system?

NE: [00:24:40] So this is difficult territory, very difficult territory, and I would say embark on that kind of program only with really careful thought. It's not to be embarked on lightly. There is no prospect of success if you work something up, no matter how brilliant the new proposal is, if you work it up and just go and present it to partners. I think that's very high risk. So I think one has to engage with people, ideally. When we did it, I brought in outsiders to interview the partners, to get their views. And the reason I brought in someone from outside the firm was that I wanted them to feel they could be as open as they wanted to be And we came up with a model which was not the final version, deliberately, and we had plenty of opportunities for partners to discuss that, provide their views. We were able to take on board some of their suggestions. There was enough flexibility in what we wanted to achieve and we managed to successfully implement the change. But it was a big exercise. We invested a lot of time and I think that's necessary in order not to destabilise things too much.

RD: [00:25:55] Partner reward in international firms is particularly complex, from cultural differences to different practices, profitability centers, the remoteness of it all. How did you deal with this complexity?

NE: [00:26:07] Very carefully. One has to be really, really careful in this in this area. Because while on the one hand, what you're saying is absolutely right, that different countries and regions have very different practices, different profitability. If one has different systems in the same organization, there is a risk that people feel there's a degree of unfairness between different countries Partners and people outside the partnership - other staff - can interrogate quite carefully what they're paid, and why people in other countries doing what they believe are the same or similar jobs are being paid differently, and where's the fairness in that? So I think one one has to be quite careful. And where I more or less landed was that ideally you need the same system worldwide, but then you layer on top of that the flexibility to be able to adjust for local conditions. As the organization grows in complexity and size, you need that flexibility not only to take account of local conditions in different countries, but just the wide range of different skills and people that you have generally in the organization. So if one can introduce that flexibility into profit sharing but also salary and bonus structures then I think that helps people feel that one way or another it ends up being fair

RD: [00:27:43] Reflecting on your own leadership journey, which is clearly not complete. But you were managing partner, senior partner. You've led alternative legal businesses. Where do you go for your development and support as a leader?

NE: [00:27:56] So I had some sort of structured coaching, which I certainly believe has its place. I think it's really important to understand one's strengths and weaknesses in a leadership role. It's equally important to understand how people perceive you, which is often very different from how one perceives oneself. And if one can if one can get a decent understanding of how people perceive you, then that can give one the opportunity to adapt one's behaviour. And I'm a great believer in the need for adaptive leadership. You need to lead in different ways at different times with different constituencies. You need to be able to display slightly different styles and approaches if possible. And one gets all of that I think, through more formal coaching structures. And another thing I did was at the very beginning of my journey as managing partner, I took myself off for a week to the Harvard Business School in common with many others in a similar position to me, and that was fantastic, for a week, in just giving me a framework to analyse things. And I made some really useful friendships and connections there, including with some of the faculty at HBS, which I drew on for many years after that. But I think the most valuable thing I did really was to have a group of around half a dozen people that I could turn to. And for periods I had a semi structured arrangement with them where we would meet up on a regular basis - external people who were sounding boards. One had an academic background, one had a technology background, one had a management consulting background, and I was able to discuss things that were on my mind and to get their feedback and to debate and chat and be challenged by them on a regular basis. And I found that to be a particularly worthwhile and valuable exercise rather than having a regular coach. Now, I have no idea whether I was right or wrong. The other thing I benefited from immensely was having a very good chair of the board within the firm who I think and I were. I had to the benefit of two during my term, and both of them were very different kinds of people to me. They were a good foil for me within the firm, but also really good advisors and provided me with huge guidance. And I think all of that helped me certainly in both development and support in the role.

RD: [00:30:44] Neville, thank you for joining us on the Performance Leaders Podcast.

NE: [00:30:47] Thank you, Ray. It's been a great conversation.

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