In what appears to be an unprecedented move for an Am Law 100 firm, Reed Smith is forming an outside advisory board composed of three business executives to guide the international firm on strategy.
The group, called the Independent Strategic Advisory Board, is composed of former EY global vice chair Beth Brooke, venture capital investor Shuo Chen and longtime corporate strategic adviser Elissa Grey. The three will report directly to Reed Smith global managing partner Sandy Thomas and work closely with the rest of the firm’s senior management.
“It goes back to our very strong belief that we get better decision-making out of diverse teams,” Tamara Box, Reed Smith’s managing partner for Europe and Middle East, said of the move. “We have a very diverse board—there’s gender diversity, ethnic diversity, racial diversity. The one fatal flaw is that we’re all lawyers. We were thinking about how we get more diverse perspectives, not only in the board room but in strategy.”
A number of law firms, particularly in the U.K., have begun bringing on individual independent directors, who are not lawyers, to join their boards. Box noted that these moves came after professional services firms such as the Big Four responded to increased regulatory oversight early this century by bringing on independent directors of their own.
She called the solution of identifying three outside advisers to guide the board “a halfway house,” noting that they can help guide and challenge the firm’s leadership on the most strategic of issues, but they don’t have to “get into the weeds” with them.
“We thought that just one voice wouldn’t be enough,” she said, referring to the idea of installing one independent director to the firm’s executive committee.
Reed Smith engaged board recruiting platform Nurole to conduct a search, and the firm received hundreds of applications, before whittling the field to a fairly large long list and then ultimately arriving at the three final choices.
In addition to having served as the global vice chair at EY, Brooke was also a member of the Big Four firm’s global board. She’s currently a board member of The New York Times Co., eHealth, Tricolor Holdings, Beta Bionics, SHEEX and the U.S. Olympic Committee. She also served in the Treasury Department during the Clinton administration, where she was responsible for all tax policy related to insurance and managed care.
Chen is general partner at tech-focused venture capital outfit IOVC. She previously worked at Goldman Sachs in investment banking and also at PwC in advisory. She also lectures on entrepreneurship at the University of California-Berkeley College of Engineering and is the chair of the board at Decode, a nonprofit technology and innovation community co-hosted with Berkeley and Stanford.
Grey is a global strategist with over 20 years of experience of working with boards and CEOs in both startup and FTSE 100 environments. She currently advises global funder Loyal VC, helping to grow its portfolio companies.
The outside advisers will be paid for their service, although Box did not discuss specifics.
“We surveyed the market and came to a reasonable compensation,” she said. “We think its important to compensate them to recognize the value they bring to our business.”
The firm intends for the trio to meet slightly more than quarterly, joining the executive committee roughly four times a year, and to also spend time with the firm’s wider partnership, potentially at its spring partners’ retreat.
Law firm consultant Patrick McKenna, the first non-American, nonlawyer to serve as an outside director at an Am Law 100 firm, has emphasized that the addition of outside advisers would likely help law firms expand their “cognitive diversity.”
“It’s one of the huge blind spots that law firms suffer, the whole idea that we live in a bubble, we see things through our legal sense, and we don’t see things beyond that that perhaps others do,” he said.
McKenna is optimistic that other firms might follow Reed Smith’s lead and that the firm will ultimately look to integrate the outside observers more firmly in its decision-making structure.
“The next step would be to transition it, after the board becomes comfortable, making them a natural part of their monthly meetings,” he said. “Then we’re talking about a significant achievement.”