Appointments: New legal chief prepares for profound changes

By Graeme Kennedy

Friday 9th June 2000

STRATEGIC: Martin Wylie says joining an international legal firm is one possibility

The legal profession is at a critical crossroads and must make radical changes just to keep up with its clients and competitors, Simpson Grierson's new chief executive Martin Wylie warns.

Law firms risk stagnation unless they make strategic decisions on key issues, including mergers, diversification, globalisation and better use of the e-commerce revolution, Mr Wylie said.

"This is not a case of business as usual but a time of major strategic change although for law it might be a case of playing catch-up. Commerce - our client base - has already moved off in those directions and the law is now following its clients," he said.

"We must make the changes or be left behind, take advantage of the new order rather than be threatened by it.

"We could always try a Luddite approach but, like all other businesses, change will happen anyway so we must lead rather than be pushed kicking and screaming to deliver better services to our clients."

Mr Wylie said large firms like Simpson Grierson, with its staff of 400 including 250 lawyers, had in the past five years begun hiring professional managers as the top jobs became too demanding for historical management by partners.

A major issue facing the legal profession, he said, was whether law firms should become multi-disciplined practices to counter competition from the larger accountancy firms, which have already added law to their services.

"Whether we move that way too is a real strategic issue. Does a firm like Simpson Grierson need to combine with a multi-disciplined accountancy firm?

"With the sophistication of commercial clients, it is no longer satisfactory to be a generalist - the clients themselves know as much as a generalist lawyer but they do want highly specialised, in-depth advice.

"They are also picking up the pace in globalisation of world trade and the reality for New Zealand business is they do operate in a multi-national environment so the people who provide them with professional services might need to be multinational as well.

"Perhaps we need to expand offshore and join an international legal firm - that's just one of the many issues facing the profession now."

Mr Wylie said there was no compelling reason that e-commerce should not ultimately have a huge impact on the profession, initially at the commodity end of the business where intellectual property could be sold on the internet.

"How that might happen is not clear yet but half the business - standard transfers and legal forms where there is little need for original thought (it's been done for 500 years) - could be transacted online," he said.

Mr Wylie said while supplying leading edge, added-value advice to clients would still need the face-to-face contact, intellectual property could be packaged and sold on the net like a book or CD.

"Law will be a whole new industry and as different as you can imagine from the crusty and conservative profession of old."

Mr Wylie graduated from Victoria University with an LLB in 1975 and worked with several government departments including the Audit Office and Ministry of Transport before moving into the public sector in company secretary and legal roles. At 34, he became company secretary for the then-formative Telecom.

"I suppose I was young for the job but with the huge hours and much dedication needed in those early days it required the energy of youth. It was a big job and I couldn't imagine a better one - it was a wonderful time, doing something worthwhile and making a difference."

After nine years, he became managing director of Aetna Health, a company poised to take advantage of the expected health sector reforms that did not eventuate after the change of government last year.

He established his own business consultancy, planning to set up a $40 million venture capital fund but found insufficient interest from institutional investors although high net worth individuals supported it with pledges of about $12 million.

"We wanted to pick up shares in small firms that needed capital and management expertise and looked at the IT, communications, health, waste management and high value-added technology areas.

"We would not have been totally passive shareholders but planned to work alongside boards and managements."

Mr Wylie then joined Wellington IT consultant and former Telecom executive John Crook in a World Bank-funded project to rescue the national telephone company of Lesotho.

"It was falling in a heap, a basket case with the government out of money and the World Bank out of patience. We turned it around and prepared it for a successful sale," he said.

Back in New Zealand, Mr Wylie was attracted to the Simpson Grierson job by the challenges facing the profession and the need for strategic decision-making to meet them.

"The firm has embraced new technology and taken on professional management with all the advantages of bringing a commercial focus and discipline to the organisation to help it through the changes we are facing.

"We are not talking about incremental changes but profound ones. The legal profession has been seen as incredibly conservative - but all that is changing too."

Martin Wylie
Position: Chief executive, Simpson Grierson
Age: 46
Marital status: Engaged
Pastime: Golf, trout fishing, skiing

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