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 analyticaland emotional intelligence and who are energetic and able toclearly articulate a vision. He says when you have a leadershipgroup with those qualities, it allows your goals and plans to fallinto place relatively painlessly, which is not the case if the grouplacks those traits.
“If you have a leadership group without those characteristics, Ithink it is a sort of a perpetual visit to the dentist chair,” he says.
Surrounding himself with talent has also allowed him to create anenergetic 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 increasedfrom more than $372 million in 2004 to more than $755 million in2007.
Here’s how Kalis deals with the challenges of leading a growingcompany.
Use talent wisely
In order to maximize the benefits of a talented team, Kalis makessure each person’s role is defined. He then trusts each person to execute and makes sure each worker knows what is expected of him orher.
“Ad hoc delegations tend to create confusion because then thestakeholders begin to ask, ‘Who’s on first?’ he says. “So, I think, a lotof the best delegation occurs a priori through role definition. By creating a role, defining it with relative clarity, there comes along withit a de facto delegation. Of course, if someone fumbles the job, itdoesn’t mean the delegation can’t be revoked, but, at least, youknow what the role is and you can tell whether or not they fumbledit.”
As people take on greater responsibilities internally, it can causesome 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 usethe lawyer in more of a leadership role, which could cause a client tolook elsewhere for services.
“There is always this balancing act about how to deploy a lot ofour 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 firmorganizational function,” he says.
Kalis says it’s key to communicate to everyone involved what isgoing to happen.
“You are very frank with the partner involved,” he says. “You haveto talk with the client, and you try to see whether certain duties canbe adjusted so the person can do both. It’s not one size fits all. Youjust 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 theirjobs is a universal key to success.
“Sometimes, I feel that if I’ve got the right people playing the rightpositions on the field, my job is a day at the beach,” he says. “Ithink I have a challenging job, but it would be infinitely harder andprobably way beyond my meager abilities if I were not surrounded by such an extraordinary group of people and if they were notin the proper roles to maximize their effects on the organization.”
Keep people energized
Kalis says being on a growth trajectory just doesn’t happen. Youhave to push it aggressively and not assume it’s going to happen.
Pushing that growth revolves around creating a culture that isexcited and ready for action.
“You have to keep your organization energized and focused on thefuture,” he says. “You have to overcome the impulse to pause or rest.You have to understand where your markets are heading, and youhave to beat the markets there.”
In order to keep the organization energized, Kalis does his best toembrace his role as a leader and a cheerleader.
“A good part of leadership is exercising what might be calledrhetorical 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-orientedenvironment 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 gothrough the motions.
“I’m sure we’ve all been around people for whom enthusiasm wasan inauthentic characteristic, and there is nothing worse than fakingit,” 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 enoughto earn that legitimacy, it works in your favor. People understand it,implicitly. It’s hard for me to imagine that someone who adopts aninauthentic voice is ever going to be regarded as legitimate.”
When Kalis first took over at the firm, it wasn’t a matter of gettingeveryone to jump on board.
“Most people are prepared to give new leaders the benefit of thedoubt,” 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 theirleadership, and they expect them to be very efficient in the executionof the plan to operate in that direction. Neither of which suggests fora 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 ofskepticism. It comes with the nature of lawyers. You have to earn theirtrust and respect as a leader, even if they do give you [the] benefit ofthe 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 hercompany.
“The first thing I would say [is], ‘Is there an ethic of excellence?’” hesays. “Do people take pride in and measure themselves in accordancewith 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 newgenerations of leaders? Is it a highly communicative culture, where,again, the good news of one is celebrated as the good news for all? Isthere 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 areamong the questions you should be asking.”
If K&L Gates didn’t have a culture of enthusiasm, Kalis says the firmwould have suffered.
“We would either be disbanded, or we would be dead and not knowit yet,” he says. “There are no free rides in the law business. There aretoo many competitors; the markets are too fragmented. Lawyers arehighly mobile. My assets go down the elevator every day. It’s a volitional act whether they come back the next morning. So, we have tohave a better mousetrap. If you don’t have a better mousetrap, youtend 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 inthe 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 caninclude a diversity initiative. They can include proper professionaldevelopment. They can include a powerful brand. They can include acontinuing stream of young talent coming into the business to supportone’s practice and so on. So, compensation is only one chip in themosaic.”
Growth through mergers
Under Kalis’ watch, the firm has done six mergers in a 10-yearspan, including one in January 2007 that merged Kalis’ firm,Kirkpatrick & Lockhart Nicholson Graham LLP with PrestonGates & Ellis LLP.
Yet, it was a merger that happened on Jan. 1, 2005, that tookKalis’ firm international. The merger involved joining forces with afirm in London. Kalis says it was one of the most substantial trans-Atlantic mergers in the law profession, and it didn’t happenovernight, nor did it happen behind closed doors.
Kalis says the process began with a period of study and evaluationin 2001 and 2002. Then, there was dialogue with the partners acrossthe firm to determine their views and interest in a significant officein London.
“It continued through the identification of a merger partnerthrough lots of communications with the partnership during thatprocess,” he says. “When the matter became a little more ripe, webrought the leadership of the U.K. firm through our major officestwice and involved the partners in the dialogue directly. We privately would meet with our partners in various offices to listen totheir questions, concerns, suggestions. Then when it came time tovote on the merger, our roughly 200 partners in the U.S. voted unanimously in favor of it. And I think, partly, that reflected the veryopen 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 thesame page.
“Cultures and organizations differ; there is no question about it,”he says. “I have never found one identical exactly to our own andso 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 itcomes out yes, yes and yes, then you can say, ‘Alright, we’re goodon culture, let’s move on to economics.’
“If you find a cohesive leadership group that they are collegial inthe way they deal with us and with each other, and they promotea 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 talkingabout consolidation within an industry because smaller cominginto bigger means a loss of autonomy.
“It tends to be the case that the loss of autonomy is felt before thearrival of the opportunities that result from the merger,” he says.“So, there are a few ticks along the way, typically. You just have towork through them in good faith.”
Kalis says the reason his firm’s mergers have gone smoothly isbecause of the amount of work the firm does on the front end.
“Remember, this is not like General Motors and Toyota deciding tomerge,” 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 comeback 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 withoutrisks.
“One, because of the economics, you can analyze it, and youcan choose to do it only if the economics are going to be good,”he says. “Secondly, because you usually get those qualities ofcohesion, collaborativeness and collegiality already inbred in, wewouldn’t go there if they weren’t already inbred in. So, it makesfor a much more settled and effective entry into a market."
HOW TO REACH: K&L Gates, www.klgates.com or (412) 355-6500