Legal
The trials of leadership
How K&L Gates’ Chairman Pete Kalis deals with the challenges of leading a growing organization
By Brian Horn
Smart Business Pittsburgh | February 2008
Pete Kalis is the first to admit it.
He didn’t lead K&L Gates to major growth all by himself.
Kalis, chairman and global managing partner of the law firm,
surrounded himself with people who have very high analytical
and emotional intelligence and who are energetic and able to
clearly articulate a vision. He says when you have a leadership
group with those qualities, it allows your goals and plans to fall
into place relatively painlessly, which is not the case if the group
lacks those traits.
“If you have a leadership group without those characteristics, I
think it is a sort of a perpetual visit to the dentist chair,” he says.
Surrounding himself with talent has also allowed him to create an
energetic culture for the firm’s 3,200 people, a number that continues to grow thanks to a strategy based on acquiring other firms.
The results of his methods are evident — revenue has increased
from more than $372 million in 2004 to more than $755 million in
2007.
Here’s how Kalis deals with the challenges of leading a growing
company.
Use talent wisely
In order to maximize the benefits of a talented team, Kalis makes
sure each person’s role is defined. He then trusts each person to execute and makes sure each worker knows what is expected of him or
her.
“Ad hoc delegations tend to create confusion because then the
stakeholders begin to ask, ‘Who’s on first?’ he says. “So, I think, a lot
of the best delegation occurs a priori through role definition. By creating a role, defining it with relative clarity, there comes along with
it a de facto delegation. Of course, if someone fumbles the job, it
doesn’t mean the delegation can’t be revoked, but, at least, you
know what the role is and you can tell whether or not they fumbled
it.”
As people take on greater responsibilities internally, it can cause
some problems externally.
Because some of the firm’s best leaders are also the best lawyers,
there is enormous client demand for their services. The firm may use
the lawyer in more of a leadership role, which could cause a client to
look elsewhere for services.
“There is always this balancing act about how to deploy a lot of
our best leadership talent so that we don’t rob Peter to pay Paul —
we don’t rob the client function in order to further the law firm
organizational function,” he says.
Kalis says it’s key to communicate to everyone involved what is
going to happen.
“You are very frank with the partner involved,” he says. “You have
to talk with the client, and you try to see whether certain duties can
be adjusted so the person can do both. It’s not one size fits all. You
just have to try to strike the proper balance, as any particular situation calls for.”
Having the right people in place and allowing them to do their
jobs is a universal key to success.
“Sometimes, I feel that if I’ve got the right people playing the right
positions on the field, my job is a day at the beach,” he says. “I
think I have a challenging job, but it would be infinitely harder and
probably way beyond my meager abilities if I were not surrounded by such an extraordinary group of people and if they were not
in the proper roles to maximize their effects on the organization.”
Keep people energized
Kalis says being on a growth trajectory just doesn’t happen. You
have to push it aggressively and not assume it’s going to happen.
Pushing that growth revolves around creating a culture that is
excited and ready for action.
“You have to keep your organization energized and focused on the
future,” he says. “You have to overcome the impulse to pause or rest.
You have to understand where your markets are heading, and you
have to beat the markets there.”
In order to keep the organization energized, Kalis does his best to
embrace his role as a leader and a cheerleader.
“A good part of leadership is exercising what might be called
rhetorical power — to be very communicative, to report good news
— enthusiastically — and to articulate the areas for improvement,
equally enthusiastically, and, overall, to build a general team-oriented
environment so that a victory by one is a victory by all,” Kalis says.
“A defeat for one is [a] source of concern for all.”
Kalis says you have to be genuinely enthusiastic and not just go
through the motions.
“I’m sure we’ve all been around people for whom enthusiasm was
an inauthentic characteristic, and there is nothing worse than faking
it,” he says.
“I think legitimacy in one’s leadership role is earned, it’s not conferred. I think if you are fortunate to have been in the role long enough
to earn that legitimacy, it works in your favor. People understand it,
implicitly. It’s hard for me to imagine that someone who adopts an
inauthentic voice is ever going to be regarded as legitimate.”
When Kalis first took over at the firm, it wasn’t a matter of getting
everyone to jump on board.
“Most people are prepared to give new leaders the benefit of the
doubt,” he says. “I don’t think anyone expects a new leader to be perfect, but they expect them to be confident in the direction of their
leadership, and they expect them to be very efficient in the execution
of the plan to operate in that direction. Neither of which suggests for
a moment that anyone is perfect or that anybody among the stake-holders automatically ought to jump on board.
“Especially in leading a law firm, there is always a healthy degree of
skepticism. It comes with the nature of lawyers. You have to earn their
trust and respect as a leader, even if they do give you [the] benefit of
the doubt, which they did with me.”
Kalis says a leader who wants to establish an environment of enthusiasm has to ask himself or herself some questions about his or her
company.
“The first thing I would say [is], ‘Is there an ethic of excellence?’” he
says. “Do people take pride in and measure themselves in accordance
with that ethic of excellence? Is there a customer or client orientation? Is there a devotion to the intergenerational nature of the business, which is to say, is there proper mentoring and training of new
generations of leaders? Is it a highly communicative culture, where,
again, the good news of one is celebrated as the good news for all? Is
there an agreed-upon set of metrics that can be consulted to determine the organization’s level of productivity and financial performance vis-À-vis its peer organizations.
“If you want to drive cultural change away from a lethargic, directionless organization to one that has got its eye on the ball, those are
among the questions you should be asking.”
If K&L Gates didn’t have a culture of enthusiasm, Kalis says the firm
would have suffered.
“We would either be disbanded, or we would be dead and not know
it yet,” he says. “There are no free rides in the law business. There are
too many competitors; the markets are too fragmented. Lawyers are
highly mobile. My assets go down the elevator every day. It’s a volitional act whether they come back the next morning. So, we have to
have a better mousetrap. If you don’t have a better mousetrap, you
tend to lose your best talent, and if you lose your best talent, you are,
in a word, dead — whether or not you know it.”
And the mousetrap isn’t necessarily made of money.
“Money is only one chip in the mosaic,” he says. “Money has to be in
the right ZIP code, you don’t have to be at the top of the ZIP code.
Different things appeal to different people. In our business, those different things can include a work-life balance initiative. They can
include a diversity initiative. They can include proper professional
development. They can include a powerful brand. They can include a
continuing stream of young talent coming into the business to support
one’s practice and so on. So, compensation is only one chip in the
mosaic.”
Growth through mergers
Under Kalis’ watch, the firm has done six mergers in a 10-year
span, including one in January 2007 that merged Kalis’ firm,
Kirkpatrick & Lockhart Nicholson Graham LLP with Preston
Gates & Ellis LLP.
Yet, it was a merger that happened on Jan. 1, 2005, that took
Kalis’ firm international. The merger involved joining forces with a
firm in London. Kalis says it was one of the most substantial trans-Atlantic mergers in the law profession, and it didn’t happen
overnight, nor did it happen behind closed doors.
Kalis says the process began with a period of study and evaluation
in 2001 and 2002. Then, there was dialogue with the partners across
the firm to determine their views and interest in a significant office
in London.
“It continued through the identification of a merger partner
through lots of communications with the partnership during that
process,” he says. “When the matter became a little more ripe, we
brought the leadership of the U.K. firm through our major offices
twice and involved the partners in the dialogue directly. We privately would meet with our partners in various offices to listen to
their questions, concerns, suggestions. Then when it came time to
vote on the merger, our roughly 200 partners in the U.S. voted unanimously in favor of it. And I think, partly, that reflected the very
open and transparent and nonparanoid process.”
In addition, because culture is an important part of K&L Gates,
it’s important that a firm merging with the organization be on the
same page.
“Cultures and organizations differ; there is no question about it,”
he says. “I have never found one identical exactly to our own and
so on. You can tell a lot about a law firm’s culture from its leadership, if they are long term. Are they cohesive? Are they collaborative? Are they collegial? Ask yourself those three questions. If it
comes out yes, yes and yes, then you can say, ‘Alright, we’re good
on culture, let’s move on to economics.’
“If you find a cohesive leadership group that they are collegial in
the way they deal with us and with each other, and they promote
a collaborative approach to the practice of law in their law firm,
that is all part of one ball of wax.”
Kalis says there will always be hiccups when you are talking
about consolidation within an industry because smaller coming
into bigger means a loss of autonomy.
“It tends to be the case that the loss of autonomy is felt before the
arrival of the opportunities that result from the merger,” he says.
“So, there are a few ticks along the way, typically. You just have to
work through them in good faith.”
Kalis says the reason his firm’s mergers have gone smoothly is
because of the amount of work the firm does on the front end.
“Remember, this is not like General Motors and Toyota deciding to
merge,” he says. “We are large, but we aren’t so large that people-to-people interactions don’t occur and can’t be evaluated. We typically
— well before there’s a handshake deal — will have the practice leaders across our firm and the other firm meeting, having video conferences, and discussing idea and opportunities. If they were to come
back and say, ‘What a bunch of dolts,’ I think it would stop there, and,
in fact, it has once or twice.”
He adds that merging is a great way to grow, but it is not without
risks.
“One, because of the economics, you can analyze it, and you
can choose to do it only if the economics are going to be good,”
he says. “Secondly, because you usually get those qualities of
cohesion, collaborativeness and collegiality already inbred in, we
wouldn’t go there if they weren’t already inbred in. So, it makes
for a much more settled and effective entry into a market."
HOW TO REACH: K&L Gates, www.klgates.com or (412) 355-6500
