A day in the life of Shoosmiths' chief executive and its finance director

Tell me a little about your roles as chief executive and finance director and the major responsibilities of each?

As chief executive, Paul is ultimately responsible for the formulation and delivery of the firm’s agreed strategy. Of course, in arriving at an agreed strategy, there is considerable consultation with the heads of each practice area, the wider partner group and the directors. Paul’s role is one of leadership and direction, drawing on the opinions and views of others in the business, resulting in a strategy for the business which addresses the needs of the constituent stakeholders in the business, namely our clients, our people and our communities.

As finance director, Chris’s role requires him to ensure that the firm has all the necessary financial structures in place to deliver the agreed strategy. This includes handling the external funding relationships, forecasting the firm’s requirements over the short/long term, having in place the internal financial mechanisms to allow the business to operate as effectively as possible and liaising with partners to ensure our teams are structured as profitably as possible.

How do these responsibilities cross over?

On a day-to-day level, one could argue that there is very little crossover. Chris has clearly defined responsibilities and objectives as finance director and Paul relies on Chris to get on with the job. Paul is careful not to cut across any of the directors and practice group heads; indeed, it is part of the success of the firm that directors are acknowledged as having complete authority in their area of expertise. As you would expect, Chris meets with Paul on a regular basis to ensure that Paul is up to date on operational issues. At the same time, Paul discusses tactical and strategic opportunities with Chris – it is here where the crossover occurs.

Ultimately, any strategic or tactical opportunity has a financial impact and Paul needs confidence in Chris as finance director that he will analyse and comment objectively on any opportunity. In reality, it starts before that with the formulation of strategy and ensuring the financial platform is there to support that strategy. This is an iterative process requiring that not only the chief executive and finance director work closely together but indeed all of the management team and partners of the firm.

What are the key differences between the roles?

The chief executive role is heavily weighted towards leadership. By this, Paul has to maintain high visibility around the firm, living the values and reinforcing key messages in thought, word and deed. The role is low on ‘doing’ and high on ‘being’, and is very much about ‘blue sky’ thinking, dealing in hope and fostering a ‘can do’ approach throughout the business.

While Chris’s role, indeed that of any director or practice group head, does not exclude the above, it is primarily focused on leading the finance team and providing assurance that the short and long term financial health of the business is being looked after. For sure, different individuals can and do bring a lot more to the table, but it is important that the finance director comes at all things from a position of strength, and that relies on excellent financial management.

With regards to strategy and business objectives, and the overall financial and risk management of the firm, where do your individual roles fit in and how do they interact?

As chief executive, Paul ultimately has responsibility for all such matters. In practice, the financial management of the firm is delegated entirely to Chris. Of course, there is a constant dialogue between us and where there are issues which need addressing, or initiatives that are required to deal with specific issues, they are discussed either prospectively or retrospectively, depending on the significance of the issue.

The directors within the business are given a substantial degree of autonomy in respect of matters within their remit and the finance director role is no different, despite Paul’s occasional temptations as a former finance director to get involved!

Can you describe a little about the biggest day-to-day challenges you face together, and how you work to overcome these?

There are many challenges that face a successful business, particularly in the current economic environment. To successfully navigate these challenges, a firm needs to have a clear direction and confident leadership. The entire senior management team and the wider partner group therefore needs to understand where they are going and how they are going to get there. Sometimes, in the maelstrom of day-to-day activity, teams can lose sight of the bigger picture and this is where strong management and solid communication lines are so very important.

Paul spends a considerable element of his working week meeting with partners, visiting offices and generally making himself available so that these informal communication lines are kept open. This is in addition to the more formal partner or board meetings that take place periodically. Chris also spends much of this time visiting offices, meeting partners and attending various practise group meetings.

The result of this two way communication is that not only are the partners kept informed of important matters but there is also a significant amount of information, concerns, ideas being ‘harvested’ from around the firm to be fed back into the mix which helps to ensure tactical and strategic decisions are as fully informed as they can be.

In the two and a half years of working together, how have your roles and the way you worked together evolved?

When Chris joined Shoosmiths two and a half years ago, there was inevitably a period of familiarisation, not just in respect of the mechanics of the business but in understanding the personalities of the partners and of the rest of the senior management team. This was particularly relevant as far as the chief executive/finance director relationship was concerned with the need to establish an effective working relationship quickly and, no doubt, Paul was keen to ensure that his recruitment decision was the right one!

During the past two years, the working relationship has evolved as we have become aware of each other’s styles and modus operandi. There is no substitute for the passage of time in developing a mutual understanding of each other’s ways, but equally as important there must exist an environment conducive to the free expression of views.

I think the key change has been in the way that Paul has been able to completely let go of the financials because of the trust that has been established between the two of us. Paul relies entirely on Chris and his team to provide financial updates and analysis, so much so that Paul has not logged onto the practice management system for over two years!

What are the key elements that highlight the success of the working relationship?

Well, we still talk to each other so the relationship must be working on some level!

From Chris’s perspective, the fact that he is allowed so much autonomy and that Paul only ‘gets involved’ with finance matters as and when required demonstrates that something must be going right. A key element to this must be the build up of trust over time, a free exchange of views and the implicit understanding that if something needs discussing then it will get raised as soon as is appropriate.The partners go to Chris as a first port of call for all matters financial. While we don’t always agree, we can still share a laugh and a joke, even when faced with some pretty thorny issues.

What key procedures have you implemented?

Improved business planning and financial discipline.

What would you say was your biggest joint achievement to date?

Shoosmiths’ success story of recent years has seen the firm grow in all of its chosen locations. Such growth can bring its own challenges as the important projects ‘compete’ for financing and management resource. At the same time, it is vital for partners not to be distracted from important task of improving the existing core business, which may not be as glamorous as some of the project work but which is equally as important. The role of the chief executive and the finance director in delivering this balanced approach is important and, to date, seems to be working well. If we had to pick one thing, it would be moving the emphasis of the business from turnover to profit and cash.

At present we cannot escape from the global economic crisis and the inevitable slide into recession – how has this affected the challenges you face, and how have responded so far to the economic downturn?

Shoosmiths has enjoyed the benefits of significant growth in recent years and during this time has continued to build a diversified portfolio, including a number of ‘recession resilient’ businesses. That said, no business is immune to what is happening in the wider economy and pockets of our business are certainly less busy than they were a year ago. One example of this is our residential conveyancing department where volumes have fallen in line with the rest of the market, meaning that we had to take the necessary but difficult decision to make a number of redundancies.

Going forward, we continue to review activity levels in discussions with the partners who are closer to the coal face and have a better understanding of their clients’ intentions. We are certainly being more cautious in terms of undertaking some projects, however we also see this as a time of opportunity in some areas. For example, we have recently announced the opening of a new office in Manchester which will, initially, focus on financial recoveries – building on our existing, considerable strength and expertise for this type of work.

With this in mind, what are the main issues you will face in the coming months and how are you preparing for this?

The foundations which will allow us to deal with the challenges of the upcoming recession are already in place. However, we expect work levels, in some areas, to decline and inevitably clients will try to improve their own cash flow by slowing down payments to all their suppliers, including their lawyers.

In this sort of environment, having an excellent client relationship can be vital. Not only does it increase the chances that work flow will come our way but it also means that ‘grown up’ conversations can be had if the client is experiencing difficulties. As always, communication is key.

Finally, any words of advice for chief executives and finance directors in your positions?

Chief executives

Be clear about responsibilities and objectives, and delegate;
Never blame anyone – take responsibility and give
credit; and,
Communicate, communicate, communicate.

Finance directors

Be brilliant at the day job;
Support the chief executive, even if you lost the
argument; and,
Retain a sense of humour and don’t let the chief executive have all the fun!

Paul Stothard is chief executive and Chris Stanton is finance director at Shoosmiths. They can be contacted at paul.stothard@shoosmiths.co.uk and chris.stanton@shoosmiths.co.uk