Clifford Chance’s global managing partner, Peter Cornell, lives in three time zones managing the world’s largest law firm.
Peter Cornell es socio gerente mundial de Clifford Chance. Trabaja en Nueva York, dirige un equipo de directores en Londres y dice que Madrid es su casa. Coordina el despacho de abogados más grande del mundo, con una facturación de 1.300 M € y 6.670 empleados ubicados en 28 oficinas y en 19 países.
Hace 15 años se trasladó a Madrid a fin de desarrollar Clifford Chance en España. Peter Cornell nos habla de los retos a los que tuvo que hacer frente y nos da su opinión respecto a las recientes críticas a las firmas anglosajonas en cuanto a guerra de precios y reclutamiento. Asimismo, opina sobre los últimos casos de abogados que han abandonado el despacho.
Peter Cornell works in New York, leads a management team based in London, and calls Madrid home. He manages a global business with a turnover of €1.3bn and 6,670 staff based at 28 offices in 19 countries.
But despite its size, his business is not publicly listed. In fact, Peter Cornell is the managing partner of the world’s largest law firm, Clifford Chance, a business whose annual income is higher than that of all the Top 50 Spanish law firms put together.
The job is challenging. Recently, he has had to deal with a dip in profits and settling down a difficult merger in the US, while an unexpectedly high number of fee earner departures from its Spanish offices threatens to cast a cloud over the firm’s 25-year anniversary in the country.
Peter does not look like a man who is losing sleep, but perhaps he is pleased to be back in a part of the world where he is well-liked and respected for having built Clifford Chance Spain into a major legal powerhouse.
In 1989, after five years running the firm’s Singapore office, where nondomestic firms were excluded from practising local law, he was looking forward to the challenge of building a domestic practice. So a move to Madrid provided the opportunity to create the first Anglo–Saxon law office to rival the Spanish legal elite.
“What really appealed to me was that in Europe you can be an international firm but you are not precluded from taking on local lawyers and giving local advice. I was intrigued by the idea of building – under the Clifford Chance hat – a Spanish office by getting the best Spanish lawyers, best clients and best work,” he says.
Peter arrived in Spain to find a fastgrowing economy and a collection of excellent local firms. A Madrid-based managing partner who respects his achievements told Iberian Lawyer, “Peter’s secret was that he was here at the right time”, he says. “They were the first City of London law firm truly adding resources and building a network. They captured good quality local people plus fire power with excellent client relations inherited from London”.
Peter agrees that his timing was fortunate. “I was lucky with the timing”, he says. “The market was buoyant and there were no other key international firms around”. This gave him the breathing space to build a practice with the cache of being one of the first international firms. The level of referral work from within the Clifford Chance network was a great help in this respect. “In the early days most of our work was from the network, mainly but not exclusively from London”. Despite its earlier origins as a mainly property focused office, Clifford Chance in Spain quickly changed shape. Peter started building his new team with the recruitment of Jaime de San Román, now the joint Spanish joint managing partner, and who came from Citibank. Other key recruits soon followed.
“We were also lucky with timing because we were able to get very good lawyers in a market which is relatively small so you get into a virtuous circle where clients learn that you have good people”, he says. “We started to grow a portfolio of clients very quickly. In the early 1990s there was a lot going on and a lot of inward investment”.
It was not too long before other Anglo– Saxon firms saw his success and thought they could emulate it, but Peter’s approach stood out. As a major competitor suggested: “Clifford Chance did it right, growing slowly and recruiting appropriate people. They managed to be perceived as a local player. The rest saw an opportunity and followed them”.
But unlike other Anglo-Saxon firms, Peter steered away from recruiting from his direct competitors, choosing instead large corporates and government departments as a source of good lawyers. “I deliberately did not try to seek out the successful partners from local firms. Obviously we all compete head to head in terms of the deals or the clients, but it is important for the legal community that we have dignified relations”, he says. “A lot of it was a balance of organic growth with lateral hiring. Many of the lateral hires were senior associates who went on to become partners while others were brought in as partners. All were very high quality. That was non-negotiable”.
It was a radical new approach. “At the time, of course, commentators were not sure what we were trying to do was a viable model – some are still not sure – but many have tried to replicate it”. While Spanish law firms were opening international offices in places like New York and London they took the decision not to practise local law there. “You saw many alliances and joint ventures with firms in other jurisdictions”, Peter comments. “But it was not as if there was a great change in that approach. They all had good existing relationships with other firms”.
There were disadvantages of being first. “We had to explain the fact that we were an Anglo-Saxon law firm. Some people got that very quickly but with others it took more time”, he says. “There was also the frustration of clients asking us ‘which firm will be doing the local Spanish work?’”
He admits that one of the most significant hurdles was breaking into the established client/law firm relationships. “It was difficult, but many of the established Spanish financial institutions were at least prepared to use us where they felt we had something we could add on an international aspect of a deal”, he says. “But from the early days they were prepared to look at us because they would see us on the other side of deals. Some times there was not an actual opening until some clients felt our model made sense and, of course, the larger Spanish institutions started doing stuff outside Spain and it suited them to speak with someone here in Spanish”.
As the firm grew, so did the challenges. “The market was growing but I guess we were winning a lot of it. Certainly we were getting a better share of the inward and outward investment and gradually ramping up the domestic work,” he explains. “Managing growth was a big challenge because we grew so quickly while maintaining the quality”.
Ensuring the firm was chasing the right type of work was also important. “The usual challenge, not unique here, is making sure we were still playing in the right arena in terms of the work we were doing and shift away from commoditisation. This was not unique to Spain, but the rate we were growing at meant the challenges were coming fast and furious”.
He is aware of criticisms that Anglo- Saxon firms priced work competitively, or even uneconomically, to win clients. As with other matters, he is pragmatic on the issue.
“Firms see competitive pricing as a way in. But with pricing all law firms have to be aware of avoiding a race to the bottom in order to beat each other”, he says. “People do work that is unprofitable, but if you do it on a focussed basis I believe there is nothing wrong with that, as long as you think it is good for your business”.
He sees the real challenge as moving into the right areas of work and away from the commoditised areas, but knows that is difficult. “The time delay between a state-of-the-art product when you are working on the cutting edge and the time it takes to become a commodity is getting shorter and shorter. At the same time you can’t ignore commoditised work, as clients will sometimes require it from you. So you need to do some of it, but be aware of what it means for the shape and size of your firm going forward”.
Peter admits that the recent lawyer losses in Spain have been a disappointment. “When you see good people leave that is of course a blow”, he says. “If people are leaving solely on economic grounds that is one thing, but you have to make sure you are not giving them any other grounds to leave”.
But he does not see it as an issue that is particular to Spain. “We see it happen in all of our offices as they mature and you start to get more partners”, he says. “Young associates see fewer opportunities when they join and, in a lot of our markets, they join us with a different mindset to 10 – 15 years ago. As they see partnership as a long way away, they now join us with different career aspirations, and see us as an excellent training ground”.
The ability to offer long-term prospects is closely tied to a firm’s profit sharing policy. “The ability to give people equity is a real issue. You hire good people, train them and provide them with interesting work but you also have to show them a future. There are opportunities, but the issues in Spain are exactly the same as those we face in New York, London or Paris, especially as those offices, like Spain, become more mature”.
To address this issue, the firm is in the process of reviewing its lockstep. A review group has recommended a transformation of the partnership to allequity, with three distinct equity ladders. This would enable the firm to bring the entire salaried partnership into the equity. In another bold move, individuals wishing to join the top ladder will be assessed on their performance in the firm's four core values: ambition, commitment, community and quality.
But as with any law firm, the ownership structure can be the most sensitive to change. Although feedback from his peers in Spain suggest that Peter Cornell has the skills of diplomacy this requires.
For his part, Peter remains highly complimentary about the local firms he encountered. “They were very supportive I have to say. I think it has been important to maintain good local relations”, he says. “In general, I think the Spanish firms can be overly critical of themselves. They have always worked very hard and been responsive to clients. I never felt the Spanish firms were far behind us in their approach. They remain very good firms and always provide very healthy competition”.
At one level, his approach in Spain appears to have been successful. In the last 25 years, Clifford Chance Spain has grown into a two-office firm with 21 partners and 120 associates. But within the legal environment biggest does not always mean best.
As a US managing partner suggested recently, leading a law firm is like managing a cemetery: “There are lots of people under you but none of them listen to you or do what you want them to”.
Lawyers can therefore make up their own mind as to whether Peter Cornell has the best job in law or just one of the most difficult.