Q&A: John Nerurker – “The better the quality of your people, the better placed the firm will be to respond to any form of disruption”

[Australasian Law Management Journal,Finance & Accounting,General Management,Marketing & Business Development,People Management(HR),Strategy & Leadership] November 14, 2019

In the second installment of a two-part Q&A, Mills Oakley CEO John Nerurker explains his belief that national firms have an edge over multinational counterparts; why being the cheapest firm does not necessarily represent value for clients; and how his firm’s model outperforms a lockstep model.

 

Mills Oakley has a national presence only at a time when many multinational firms have come into the Australian market. What are the advantages of focusing domestically?

One of the most important advantages is that all decisions are made locally and not through a global bureaucracy. For example, it’s common to hear partners at international firms complaining that it takes a week to open a new file, whereas we can do it in a day. Global firms also incur major overhead expenses, which are inevitably passed on to the client. They need to navigate the competing interests in different countries – if you are in Australia, you are sometimes given the sense that the real decisions are being made elsewhere, such as in London or New York. Because we are an independent Australian firm, decisions about our firm and careers are made locally, with the interests of local practices at heart. It’s a faster, friendlier and more efficient way to run a firm.

Tell us about your management style.

I always try to lead by example. I try to be very transparent in everything I do, including explaining the reasons for any decision. My goal is to ensure that everyone understands the vision and the values at Mills Oakley and what we are striving for. Of course, different people will move at a different pace towards those goals, but so long as everyone is taking steps in the right direction, I’m happy.

The stock in trade of any law firm is the collective knowledge of its lawyers, so I strongly believe that a firm is only as strong as its people. We put a lot of time into training and have a very large graduate intake each year. We probably punch above our weight in that respect. We work very hard in training those graduates, not just in the technical side of the law, but also the cultural aspects of teamwork and client service which are key to our vision.

You have previously worked in management roles at PwC and Slater & Gordon. Have those experiences informed your leadership role at Mills Oakley?

Yes. I was fortunate at PwC to be working in a management consulting team, which gave me a unique insight into helping devise and implement strategy for corporations, and now I’m lucky enough to be able to do that with Mills Oakley. I left Slaters 16 years ago, long before the IPO, when it was a very different beast. Slaters also has a different business model. Nevertheless, it’s a high-volume, low-margin environment and that taught me how to run a law firm profitably – something that is still very close to my heart.

You have an accounting background, rather than a legal background. Is that important for managing partners and CEOs in modern law firms?

Well, as a CEO, most of my day is spent either on financial management or people management, neither of which you study as part of a law degree. So I certainly don’t think a legal background is essential, particularly when I can call on any of our 100 strong partners for legal advice if needed. You don’t need to be a pilot to run an airline – well, similarly, you don’t need to be a lawyer to run a law firm.

What is Mills Oakley’s value proposition for clients?

Client value doesn’t mean being the cheapest. We believe value lies in offering genuine insight into the client’s business; for example, identifying a ‘pain point’ at the outset, before it becomes a major problem. The true measure of the value we provide is the effectiveness of the advice we give.

This can’t occur without an unwavering commitment to integrity and transparency in every aspect of the client relationship – from routine matters, such as billing and responsiveness, through to major strategic or ethical decisions. Especially post the Banking Royal Commission, legal advice needs to take into account community expectations and not simply the legalities of what can and cannot be done. We are dedicated to providing frank, fearless advice – with the courtesy and professionalism which our clients expect and deserve.

Modern law firms face many challenges, including one that is most often cited in recent years – digital disruption. What is the key challenge for Mills Oakley?

Our mantra is that top talent will rise to any occasion. You are absolutely correct when you say that digital disruption is a key trend in our profession, but I would argue that the solution still comes down to attracting and retaining better-quality talent than our competitors. The better the quality of your people, the better placed the firm will be to respond to any form of disruption. If you take the talent out of a law firm, or if you’re unable to retain it, then you’re withering on the vine.

A recent example of which we are very proud is our Accelerator 2.0 program. We ran a competition for our staff to submit innovative business ideas, from which 16 were selected for a two-day start-up boot camp. The best six have now progressed to the Swinburne Legal Tech Incubator to help them take the next step. This has started a ‘flywheel’ effect within our firm, where our staff and partners can now see what is possible at Mills Oakley, and that they will be given all of the help and support to make their innovative ideas a reality.

How do you recruit and retain talent?

It’s a multifaceted strategy. Fortunately, firms that grow quickly have more opportunities for their staff, and that has certainly been the case at Mills Oakley. That makes the job a little bit easier!

This also ties in with my earlier comments about replacing our lockstep with a more transparent partnership model. This has proven to be a powerful incentive for our younger talent to stay with the firm, because they can see a clear path forward for themselves. They know they won’t be held back and denied a promotion because of the vested interests of incumbent partners – that’s not how our model works.

Our model has been a real boon for Gen X and Gen Y talent who want control over their career destinies and want to achieve partnership sooner rather than later. This demographic does not want to be held back on an oppressive lockstep that only rewards partners at the top of the firm.

What other elements have helped the firm?

We’ve benefited from two major developments in the legal profession over the past decade: first, the global financial crisis and, second, the globalisation of the Australian legal profession.

The GFC caused a lot of blue-chip corporations to review their legal spend and ask whether they could attain better value from firms they might not have previously considered. That really opened the door for Mills Oakley and we were able to seize that opportunity and build relationships which have endured to this day.

The other trend, the globalisation of the Australian legal profession, has been dramatic. Back in 2004, there were only a handful of international law firms in the country; that number is now in the vicinity of 20 and still growing.

As I said earlier, becoming an international firm involves major disadvantages and a lot of partners at those firms quickly realised this. This created a golden opportunity to recruit high-calibre talent from our rivals. As a result, many of those partners have voted with their feet to join firms such as Mills Oakley. So I would say we have benefited greatly from the globalisation of the legal profession. In turn, many firms which entered global mergers are now considerably smaller than what they were pre-merger.

You have been at Mills Oakley for 16 years, but you seem content to stay and further drive the firm. What makes it rewarding for you?

It’s a genuine privilege to lead this firm and I enjoy every day of it. But the job’s not done yet. I truly believe that our best years are ahead of us. Our team and our brand is stronger than ever and we need to capitalise on that. I’m looking forward to seeing my colleagues reach ever greater heights at Mills Oakley in the coming years.