The money men breach the holy of holies

A series of recent appointments of accountants to top jobs at City law firms shows that lawyers have finally surrendered their reluctance to be managed by outsiders.

Alan Morris, an accountant with wide experience in industry, hit the headlines earlier this year when he beat several partners in an election to the post of managing director at the top 10 City law firm Simmons & Simmons.

This followed the appointments of Christopher Honeyman Brown as chief executive of Alsop Wilkinson in April and Chris Schulten to the same position at Richards Butler at the end of last year.

All three posts are equivalent to that of managing partner, a role which before last year was exclusively performed and zealously guarded by lawyers.

But while many law firms will have an accountant as finance director only a handful have been promoted any further. Mr Schulten was the first to break the mould. At the time both he and Richards Butler expected other firms to follow suit. Now he predicts that many of the top firms will have accountants or outsiders in the chief executive post in 10 years' time.

"I would not be at all surprised," says Mr Schulten, "if the majority of the top 20 or 30 firms are managed by non-lawyers." The natural option in the past has been to appoint a partner but he believes that might not necessarily be the best option.

Mr Schulten says: "I think it's important to have a wide experience in business management from which the practice can benefit." Accountants are obvious choices. They come from a similar backgrounds and are professionals in their own right. It's easier to be ordered around by a member of your own peer group.

Alan Morris read law at Cambridge before starting a career in accountancy and has spent the last seven years with Simmons. "You are mixing with a lot of people who have similar educational and professional background to yourself," he says. "Lawyers are as easy and difficult to manage as anyone else. It's partly to do with having a shared vision."

Mr Schulten says the need to get so many partners on board before a decision can be taken is both "stimulating and challenging" but occasionally frustrating. "They will have a view on everything and it does mean things can take longer to achieve."

An accountant or non-lawyer business manager may need to wrestle power from a group of professionals not used to relinquishing it to someone who isn't one of their own. Peter Cole, a lawyer and managing partner at national law firm Eversheds, says this is the main challenge to an accountant taking on the job of chief executive. "If you bring in someone from the outside you have to give the man the authority otherwise he becomes just another operational assistant and the appointment becomes counter- productive. Historically lawyers have not been very good at that."

Mr Morris is confident that his fellow partners will give him as much power as he needs to do the job when he takes over on 1 January. "If you have been elected by the partners, which presupposes you have got their support, I'm not sure what else you need."

Mr Honeyman Brown says: "Power is an emotive word. The question is: are your powers explicit and written down or should they be implicit, achieved through consultation and the way you exert yourself?" Mr Honeyman Brown is respected as a strong character in his field and it's clear which method he prefers.

Eversheds has long recognised the value of the accountant's role in the practice. Each of its seven regional head offices employs an accountant as finance director. "One runs a legal business without a proper finance director at one's peril. I would be surprised if a single major law firm today does not have an accountant in that role," Mr Cole says.

Mr Morris explains: "A few years ago law firms were increasingly recognising they are businesses which need professionals in particular professional areas." The sort of changes, he says, experienced in the banks in the early 80s when bankers were aware that they were good at being bankers but not necessarily so good at being accountants, economists and personnel directors, is similar to the transition in law firms. Therefore the accountant's route to a legal practice is now that much easier.

Simmons & Simmons had a turnover of around pounds 80m last year and was dealing with tens of millions of pounds of clients' money. "By any standards that's quite a large business," Mr Morris says. "Things have got more difficult, more complicated and larger and it's a full-time professional job."

Perhaps the most significant of recent appointments to chief executive jobs is that of Mr Honeyman Brown who, unlike the other two, was appointed from outside the firm. While Mr Morris and Mr Schulten were both finance directors with their respective firms, Mr Honeyman Brown came straight from accountants Binder Hamlyn where he ran the professional practice group. But his credentials for a senior position in a law firm are strengthened by the fact that he has spent the last four years focusing on services to law firms.

"When I arrived here," he says, "I did not think of myself as an accountant as a lot of my work took me away from the traditional audit and accounting skills of the accountant." Mr Honeyman Brown believes this experience means he brings to Alsops "the knowledge and awareness" of the issues involved in managing a team of partners who are "owners and investors in their business."

All three men agree that lawyers are less impressed with the status of accountant than they are with the character of the person.

Mr Cole says: "Accountants don't necessarily make inherently better managers of businesses than lawyers." But as Mr Cole's three-year tenure as managing partner comes to an end this year he says he can't rule out the possibility of his fellow partners deciding to look outside for an accountant. "Anything can happen," he says.