Our guest in episode 5 is former Herbert Smith Freehills Global CEO, Mark Rigotti. Mark shares his insights on the nuances of managing dispersed and hybrid teams, as well as his reflections on leading one of the world's leading professional firms.
This special episode of the Performance Leaders podcast was recorded live at the 2021 Managing Partners Forum in Sydney, Australia.
Mark Rigotti was Global CEO of Herbert Smith Freehills, serving two terms from 2014-2020.
As CEO Mark was responsible for developing and driving the firm's “Beyond 2020” global strategy. The results of that strategy include:
Mark is a believer in the importance of fostering a vibrant and productive culture, and ensuring people are well prepared to collaborate, adapt and grow in an ever-changing environment.
Mark is a member of the Business Council of Australia and the Financial Services Institute of Australia and holds various board positions. At Herbert Smith Freehills he now focuses on bringing the outside in. He combines global insights, connections, and cross sector experience to give HSF clients and teams access to market leading ideas.
Prior to becoming Global CEO, Mark was a member of the management team, led practice groups and managed the global client portfolio. Mark joined the firm in 1988 and became a partner in 1996.
Ray: [02:10] Hello, everyone, my name is Ray D'Cruz. It's a delight to be here with Mark Rigotti. We're going to talk about leading dispersed and hybrid teams, which is something Mark has a lot of experience in because the nature of Herbert Smith Freehills, where he was CEO for many years, is an international firm. And so many of the issues that we're facing today in terms of asynchronous and dispersed teams, Mark dealt with for many years. And so that analogous experience can be really quite insightful. But because we've got Mark here, we're also going to take the opportunity to go a bit further than that and talk more generally about his leadership journey, and reflections on all sorts of things. We are limited in time. We could talk for a long time. So, we're going to try and keep it pretty punchy. So, Mark, thank you for joining us.
Mark: [03:08] That's ok, good to be here.
Ray: [03:10] Mark, what are you missing most about the CEO role?
Mark: [03:13] Look, it's a good question, I think the two things I miss most are people and relevance. It was a real privilege to be in that role, particularly, you know, I sort of grew up in Sydney, my career was in Sydney, but I made some wonderful friends, particularly in Paris and Madrid. And I had the opportunity to talk to them during the week on a on an internal project I've been asked to help on. So, I miss that - they're genuine friends. And I think part of it was because we had a common enemy in the English, of course. Sorry, with apologies to those from that part of the world. And the second thing was relevance. As soon as you stop being in that leadership role, it's a cliff edge on information and relevance. And it's a bittersweet thing. It's fantastic not to be caught up in it all, but there's a little bit of FOMO kicks that in at the same time. That would be the two things.
Ray: [04:04] And that leads to the next question, which is what aren't you missing?
Mark: [04:08] How long we got? Now, look, the number one thing there is the travel. Global firm, it's pretty brutal travel. So, I did 174 days on the road in the last year of being CEO, as I don't miss that at all. And just the relentlessness of the role. I'm sure many people here feel the same - if you're a client serving partner - it's the same thing: you've got your clients chasing you. If you're in a leadership role, it's everyone. So those are the things I do not miss at all. I finish at five o'clock these days, which is this fantastic.
Ray: [04:41] And reflecting on that senior leadership team, which I guess was your core leadership team, I imagine that was a heavily dispersed team sitting in lots of different time zones. So how did you manage and lead that team? What were the things that worked in that dispersed environment?
Mark: [05:00] Look, it was a bit of a challenge, again, coming from Australia. I was on an executive team here, but there's someone in Perth and that was a long, long way away. And when we merged, we had a Noah's Ark theory. So, there was two of everything. So, the team was in London, Moscow, Perth, Sydney, Hong Kong. So, in a lot of different places. And even in London, there's four buildings. It wasn't where everyone was down the corridor. It was a real effort to see people physically, and understand different cultures as well. So, a couple of things I did that I found helpful, and I should say it was ongoing, experiment. I did some training - the firm actually offered some training on how to conduct conference calls with people from different places, which sounds really basic. But the idea was to put yourself in their shoes. That was the big idea. So, you have some Chinese colleagues: you know that, the junior person is not going to speak first. You have to invite the senior person in first and then invite the junior person. A bunch of tips like that. But the main thing was to put myself in their shoes. And that was relevant because the managing partner for Europe, who actually sat in Moscow, felt very remote from the team. So, I just needed to speak with him once a week, come hell or high water. The other thing we tried to do, to be honest, is to shrink the team. I'm a bit of a believer that it's really hard to manage large teams effectively. And I think there's some research which says seven is the perfect number. For every person you go above seven, you lose ten per cent of your effectiveness. So, I did shrink the team, and it did make a difference. When the team was over ten, it automatically started to fracture into different groups, business services or partners. We ended up calling them squads. And then we called one the A squad and one the B squad, and that was a mistake. So, we ended up calling them “blue” and “green”. So, getting it down to a manageable size. My successor has actually taken it down another notch, which I think is good.
And I think then that the other thing was a little bit like we heard from the Cohen Group, you know, make friends with people before you need them, which sounds a bit tactical, but form relationships with each of those people.
So, most of that time, I didn't get to pick my team, and most of that team I didn't know before stepping into the role. It might be a little bit different to the experience of people here. So going back to my Russian colleague - he's not actually Russian - he's Canadian just to complicate things more. What's more important is the 10 minutes at the end of the meeting than the two hours in the meeting. The 10 minutes at the end of the meeting where you can actually say 'Alan, how are you going?
Ray: [07:37] Yeah, but it's an important reflection, to still spend time building relationships even remotely.
Mark: [07:43] Absolutely. Absolutely.
Ray: [07:44] And any reflections on things that didn't work in terms of bringing that leadership team together across different locations?
Mark: [07:53] Yeah, well, I guess it goes back a little bit to our culture. We used to have elections for major roles: it wasn't via CEO appointment. We got rid of that because I actually thought “competency” was more important than “popularity”. Which sounds good when it rolls off the tongue. But in a professional services firm, you do need leaders to be credible and you usually get credibility by knowing people and being good in your subject matter expertise. So, you can't completely dial down the popularity thing. And I probably dialled it down too much. A little bit of zeitgeist crept into putting the emphasis on competency, but I was trying to shift it from most popular and usually the most senior person gets the role, rather than the person who's actually going to bring the most to the role. It's also a bias laden set of circumstances.
Ray: [08:38] There's a whole set of processes that you then need to build around that to allow that sort of system.
Mark: [08:43] Yeah, there is. You've also got to give people the opportunity to develop the competencies that you think are going to be right. So yeah, some mistakes I made were probably moving too quickly on that. Much easier to go through, go through an open door than a closed door. And a bit of intergenerational change made that very easy to do in the long term. And I think the other mistake probably was that the relationship building I would do would be easier with people I liked. And given I couldn't always appoint the people I wanted, there were some people I probably didn't like as much. Probably should have spent more time understanding them, their perspective, what made them tick. So maybe a couple of the learnings.
Ray: [09:24] Just shifting focus a little bit, at the time of the international merger, one of the things the firm did was introduce a collaboration points system, which I think a lot of you know about, or we certainly get a lot of questions about this system. Can you tell us a bit more about the system and reflect on how it went?
Mark: [09:46] So it's a little bit like carbon credits, I guess, in today's language. And it was actually in operation in Australia pre-2012 and we took the idea international. So, the idea is in each of the performance assessment for the partners, you'd look at the usual range of things. Collaboration was one of our values. So, we would ask some questions, like 'what have you done to help your fellow partners and who's helped you?' and try and reference that. And we then decided to put a little bit of edge around it and said, you've got 10 points and you have to give those 10 points away to the people who helped you the most. And if you're a new partner, you get 20. If you're coming back from parental leave, you get 20. And what we'll do is if you get more than 10 we will tell you your number. And if you get less than 10 will say, you didn't make it to 10. And it was really interesting. It really shone light on what we call connectors: those people who quietly went about doing their business. It actually showed a lot of the Asian partners really, really well, to be honest. And we published that. So, when I would stand up and do the report on the remuneration at the end of the year, we'd say, here are the top 20 partners who got their 40 points or their 48 points. So, there's a guy in London – a very softly spoken Northern Irish guy Patrick Mitchell, who was an infrastructure partner. Just went and did his job - in the first year he came up with 38 points. This is the guy in the partners lunchroom who doesn't really want to sit next to anyone. So, it was good. Now, there's a lot of cynicism about trading of credits. But you can pick that up if you if you look close enough, and I think what was really important. A bit of a by-product of it was some of the senior partners didn't get a lot of points. They're actually driven by being acutely competitive, so they actually became better collaborators, not because they believe in collaboration, they just wanted to be on the scoreboard! Which is not bad because they do have the gift of instructions. They do have an ability to sponsor and mentor people. So that's the system. It's not perfect, but it does force a conversation around it.
Ray: [11:50] Is it still in place?
Mark: [11:51] Still in place. I should say, if you're in leadership, you're not allowed to receive any points or give any points.
Ray: [11:57] How did you stop that favouritism creeping in?
Mark: [12:00] It would always be funny - you know in one particular office, they all gave each other all their points and they all opened all their files in everyone's name. So, it was completely opaque.
Ray: [12:14] Like Eurovision.
Mark: [12:17] Yeah. I hadn't thought of it like that. That question put the pressure back on my team and the people doing the reviews to really understand the contribution the partners were making. So, if people were trading credits, you know senior partner puts the pressure on the junior partner for her to give you all her points, you can pick that up pretty well. To be honest, I assumed the best of my partners. There’s probably a little bit of bad behaviour. But it wasn't rampant. It was maybe one or two per cent in the first year.
Ray: [12:43] And from what I understand, there was an important storytelling component that went with it. So that would help ameliorate that.
Mark: [12:50] It did. It did. So particularly those points, there was a direct correlation to bonuses. And a lot of the reasons why those points were given away for a variety of things. It was from, “help through a difficult period in my life” through to “introducing me to a major client”. So economic, non-economic. And, again, we do storytelling around that as well.
Ray: [13:13] Just keeping on with the performance management theme, one of the things you would no doubt have had to have done is have difficult conversations, difficult performance conversations with people who you weren't in the same room as. And I'm sure some of the people here are dealing with that very issue right now. What sort of insight do you have from that experience?
Mark: [12:36] Don't do it!
No, look, it goes with the job a little bit, doesn't it? Because the hard stuff should be rising up to our level. If it's not, then there's some capability problems either with your own leadership or your team.
The advice that we got from HR, which I think was very good, is those conversations, have to be delivered by someone they trust and who knows them. So really, it would be the direct supervisor in the leadership team in the majority of cases. When it would come to me was when it was values based or if there's a team departure, for example, those sorts of things.
How would I do it?
I'd always make sure someone else was in the room with them. So, it wasn't me alone across a video conference. It was someone from the leadership team or HR in the room, both in terms of looking after them, but also looking after our interests as well. I found that a valuable technique.
I don't know if anyone's been to the Harvard Professional Services Executive Education Program, but there's a guy there called Tom DeLong and he teaches this: he says, get the bad news out first and then empathize like hell. And it's really good advice. I've always found if you hold the bad news back, you're building toward it, and you're anxious. They know something's coming. It's better off going in hard with the bad news first and then empathizing. I found this technique worked well for me. And then I guess for the really, the really hard ones, and I had a rule: never more than one hard conversation today, because it does it does take something out of you. No one's Superwoman or Superman. But for the really hard ones, have them scripted. Even if you don't use the script - if it's a #metoo situation you're dealing with or whatever it might be, really difficult, then write it down.
Ray: [15:17] In terms of that high performance culture that every managing partner or CEO tries to drive within the firm, what were some of the things that you did to push that along?
Mark: [15:30] Yeah, we had a particular set of circumstances because we were merging a hard lockstep firm with a contribution based firm in terms of compensation. And each of them said we have a high performance culture. And each of them was half right.
So, one of the things we had to do was to find some common ground around language and high performance was part of that.
We did reform the compensation system. So that was one thing. We had two goes at it. A small reform and then a larger one. And that really did change things. I do believe you need the compensation to reflect what you're trying to achieve strategically and something which aligns to your values.
The other thing we did is we actually spent a lot of time in training - in fact, every year if you were a reviewer, you had to do training. So, it was half a day to a days’ training on how to have those conversations. And we tried, I think, successfully over time, to move it away, in terms of ASX companies, to be less around the annual report and more around continuous disclosure.
So first of all, to try to teach people to have the ability to have real conversations. And you know, if you don't have that capacity, you spend 55 minutes talking about stuff and in the last few minutes you bring in the bit that's the most important. Actually, being able to pace and prioritize. And then over time, it's actually become far more about an ongoing dialogue rather than a once a year big reveal. That second step is an ongoing work in progress. We have found the younger partners love that, need it. That it’s actually driving their performance because they want a degree of assurance that they're pointing in the right direction or if they're not, some help to get back on track.
Ray: [17:08] Heading a little bit off-script, we've seen in the last day or two, Minter Ellison trending on Twitter, so it's not often that law firms trend on Twitter. So, we probably should ask you a question about that because there seems to be a really difficult issue around brand conflict emerging. And we've probably seen it overseas with the US firm Boies Schiller receiving a lot of [pushback] around its representation of Harvey Weinstein and Theranos. And we've seen Donald Trump's lawyers reject his instructions. Well, that might be because he doesn't pay. That might be a different issue. What's your reflection on this? It seems like one of the most difficult issues that a CEO could face right now.
Mark: [17:59] Yeah, and look, it's not the sort of stuff they teach you at law school either.
A couple of reflections. A bit of advice I got years ago about dealing with these circumstances, and they will happen, like a data breach. It's not if, but when. And you'd like to think, well, when it happens, I'm going to be match fit, it's going to be grand final day. Well, that doesn't happen . You'll be busy. You'll be somewhere else. It's certainly my experience.
The best advice I got was around a thing called metacognition. And there might be some people in the audience who understand that better than me. –You may have heard it expressed as being on the balcony rather than being on the dance floor. And the concept here is you need to manage yourself as well as manage the situation. It's not particularly helpful, I found, showing up in a way where you're either dogmatic, you're not listening or you're not decisive when that's required. So, step one is work out where you are on the issue. And if you need help, get help. So, for me, for example, my personal brand is very much around bringing people together to get things done. And so I always had someone on my executive team who was a hard person--just saw things in very black and white terms. And that was very helpful to have him respond to the question - what should we do on this? And he'd say, it's clear, you know, let's go and do this sort of thing. So that would give me some resolve. So, start with yourself rather than start with a situation would be a little learning I had.
And then in the situation, I always felt the pressure to act. Again #metoo situations, you know, coordinated team poaching situations, those sorts of things which you will have seen in this market, fraud, that sort of stuff. You always feel, gosh, this has happened, we've got to solve it now. And my learning and some advice that was given to me by my chairs - you've always got more time than you think you have. Fight that inclination to rescue or to act and listen, ask lots of questions. And frankly, what helped me was to listen to everyone advising you and then come in at the eleventh hour with the decision. And I do believe that you do need to make decisions not too quickly, but not too late. It'll be a runaway train if it's too late so that they would be some reflections.
And then in terms of the whole brand issue, it's really tough, isn't it? Because, you know, our firm many, many years ago acted for Lionel Murphy, who was then, a judge of the High Court, which was a very controversial decision at the time. But it was really driven around a belief that he required representation, irrespective of the political dimensions of it. Really kind of divided the partnership. But the management made the decision. Was it a good or bad thing? At best it was neutral. So, I think with brand and f identifying who you are, I think you can't divorce it from the circumstances in the situation, to be honest.
So, the major one I had to deal with was around whether we acted for Big Tobacco And there was a bunch of people who said we shouldn't, bunch of people who said 'look, we do and we should continue to do so'. What really swung me is I actually went to see the client and read their CSR statement and some of their governance materials. And it's some of the best that I've ever seen, probably because they have to. So, we ended up acting, continuing to act for them, but we gave individual lawyers the capacity to opt out of acting for that client. So ,there are a couple of random reflections. This is a bit on the hoof, off script. So, I hope there's some things here. But I would encourage you to have a think about that metacognition piece. If I'd known that at the start of my career, it would have helped me make less mistakes on the way through.
Ray: [21:28] Yeah, but I guess the other theme there that you started with was being prepared because something like this will happen.
Mark: [21:37] Have a couple of good advisers as well, to be honest. I mean, real people that can give you a real advice.
Ray: [21:43] In terms of your own development as a leader, what were some of the some of the things you did to either prepare yourself for the CEO role or to allow you to keep developing into that role?
Mark: [21:57] I guess it's interesting, sort of back in the day when I started as a lawyer, leadership development was kind of 'read the memo the day before you start'. I think we've moved a long way as a profession. And remember Rebecca's discussion yesterday on culture and the little survey we all filled out. One of the top three culture things that we're worried about is leadership development. I think the others were collaboration and inclusion. Leadership development was number three.
So, what did I do? I had a lot of help from the firm. I've had different levels of coaches for many years. I found it very useful to have someone outside the fray who can help be a sounding board, help develop ideas, bring the benefit of some experience. Also, just finding some time to do it, as we're all so damn busy. It's. I really should do it. I should get round to it. So, I used to take an hour off a day to try and spend some time - actually could be reading an article, could just frankly be clearing the decks so that [I] could do something else. Try to do an hour or a day-
Ray: [23:02] Was that something you communicated to everyone in the firm?
Mark: [23:05] Oh, not as expressly as that. But my secretary monitored that pretty hard. Probably achieved that four out of five days in a week. I guess the idea was, to designate a bit of time to do it. It actually becomes like a client matter or a management task. It's part of what you do and it's not an optional extra. And that was terrific for me, because it allowed me to reflect on what happened last week, what went well, what didn't go well. And as Ray knows, I've got ten years of leadership diaries. The firm is absolutely petrified I'm going to go public with them. So, there's a collateral benefit to keeping a journal! But I did find journaling, actually forcing myself to write down the insights, was very helpful.
Ray: [23:49] I know you're very humble and self-effacing person, so this question will be difficult for you to answer, but do you have some insight into what your legacy markers are at that firm after your tenure?
Mark: [24:03] Gosh, that's really a question for someone else to answer.
I guess what I draw upon when I sort of stepped down is a bunch of lovely emails. And I think you'll find this: when you go people tell you how good you are. When you're there no one tells you how good you are. And when you go, the people who hate you and you hate don't actually communicate with you. So, you get the good stuff.
My wife did a lovely exercise. She said this is really great. Three hundred emails I got. And she put them in some clusters, which was nice. So, the first cluster was around leading transformation, which was great. A bunch of my buddies in Paris wrote those, I owe them lunch at some stage. So that was that would be one of the one of the things I'd like to point to. I didn't so much achieve those things. But what I did do is to try and get the firm change ready. The press, used to describe us in London as “painfully conservative”. I wouldn't say we're progressive, but we are change ready. People are now saying 'what's next?' rather than 'we don't need to do it because it won't work around here'. So that's a piece I'm pleased with.
The second thing was around developing and positively impacting people. I was surprised the more senior you get, the more remote you can become. It's really difficult. And most of us, I think if you're in leadership roles, have an orientation to others. And so, I found myself getting more and more removed. So, it's very nice for that to come back.
And then I guess the final thing was something around doing things in a balanced way. I actually think sometimes your legacy is not what you do, it's how you do it. And we've probably all had clients or seen law firms where they've been really successful. But, gee, there's a lot of scar tissue on the way through.
Ray: [25:42] And talking to people who still work in your firm, I think the other legacy that I'd note would be your personal style of leadership has become a legacy in its own right, because a lot of people would have come into that firm, experienced you as a leader, and that becomes their frame. And that's a very positive thing as well.
Mark: [26:0-0] Yeah, well, it's interesting in our firm, if you go back, you can read the two books, if you like, The 40s, 50s, 60s and 70s were dominated by really strong leaders. From Brian Page, David Gold, John Barker. They were very successful. If you talk about the people that were around at the time, they were frightened. And I think the firm almost didn't want to go back to those days. They want empathetic, more modern leaders.
Ray: [26:25] There was a question, last night, around the pace of change and how do you know when to hit the accelerator and press the brake? Do you have any insight on that?
Mark: [26:35] Yeah, well, I do. I reckon if you took a vote non the change and you can't get 85%, you're not ready for it. In a law firm, it's not about getting 50.1% -- you need 85% would be my tip. There's no science to that whatsoever but it's just the feeling I think I failed when I didn't have that 85% threshold covered. We sailed through [if it was at that level]. You can tolerate a little bit of resistance, but you can't deal with say 40% resistance. It's just too much, too much to deal with.
Ray: [27:08] So, Mark, final question for me is around your transition out of that role to what you're doing now, what were your options? How early in the piece did you start thinking about them? And why did you end up doing what you're doing?
Mark: [27:25] I started thinking about it on day one of taking on the CEO role. Got a transition coach on day two.
Seriously, I think everyone in this room, if you're in that role, you should be thinking about it, because there's three things in life that are going to happen: death, taxes, and you will leave your role. So, get ready early.
I think probably the hardest thing was changing the mindset because of the very other-orientated roles that we have. You have to get greedy and think about yourself a little bit and think about what you want to do.
Of my peers, I'm looking at Tony O'Malley, because we've had this discussion, the hardest thing is working out what I want to do. It's not actually finding it. It's actually working out what I want to do.
But it's a wonderful privilege for each of us because you leave your firms with a brand, probably financially in a position to be able to take some time to develop options. I do think though there is there is an emerging piece (and it's an industry wide issue that we haven't really grappled with, particularly in this country) around what you do with senior talent as it steps out of its roles. In some professional firms, BCG, for example, you can go back into whatever it might be in the firm and they call it a “new deal”. It's been written up in HBR, if you want to look at it. But it is a definite changing of gears, different role, different comp, different level of expectations. So, I think that's possible, but it probably needs a bit of a change in how we do things. So that's where I'm up to at the moment.
Ray: [28:48] And I think we're out of time. So, I just want to say two things. Firstly, we've got a similar interview or podcast coming out on Monday for International Women's Day with Michelle Dixon. And the second thing is to say thank you, Mark.
Mark: [29:00] Pleasure, thank you.
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