Grumpy old man

One of the joys of children is watching them grow up (even if they rarely avoid the mistakes we made). Sometimes they cut a little close to the bone. Last night was a case in point, as #5 (the only boy) offered the following observation,

You feel young until you realise that actually you’re old – a perpetual state of adolescence followed by a midlife crisis.

He added, although he omitted it from Twitter (probably ran up against the 140 character limit), “and then you’re fucked”. Charming, not least as I am a little more than a week short of my 60th birthday, and survived my mid-life crisis 20 years ago.

But it got me thinking, again, of generational change, of the excitement that it brings, and the opportunities it offers. And of a comment by Luke Johnson in his FT column some 5 years ago,

Owners and executives have a duty to ignore [behaviours where talent holds companies to ransom] and invest in young up-and-comers rather than greedy, established players.

Sadly not always the way in professional service firms.

Always an easy target?

Luke Johnson’s weekly The entrepreneur column in the FT’s Business Life section is always a good read: trenchant views and punches rarely pulled. His attack on the legal profession three weeks ago was no exception, and it made for somewhat uneasy reading. For a flavour of the tone of the piece, read on,

But somehow lawyers have risen to such exalted status that many of them appear to believe they are a breed apart, not subject to the same standards of decency and fair dealing to which the rest of us in commerce attempt to adhere.

It also attracted more attention than many of his pieces do, and not just in the way of on-line comments on Ft.com, but a post in Legal Week’s Editor’s Blog (“great knock-about stuff”), tweets on Twitter, and no doubt much more elsewhere. By and large the comments fell into two categories: those violently disagreeing (mainly lawyers) and those violently agreeing (everyone else). No surprises there then, although reading some of the comments I can only supposes that they were drafted in green ink.

I read the piece on my way to an all parties meeting in London, on a corporate transaction that was, and remains, slightly sticky. In one of those lulls that seem to characterise any corporate deal, usually an opportunity to discuss cricket, rugby, football, racing – in fact anything but the deal itself, the conversation turned to the column. It turned out that the lead corporate finance adviser on the seller’s side (a director of a Top 4 accountancy practice so glasshouses and stones came to mind) had read out choice extracts to his clients and their lawyers before we had arrived. Nothing like putting the lawyers in their place.

But although there is some truth in what Luke Johnson wrote, and no one likes a mirror held up to them, he misses a very important point. The profession is only too well aware of the issues, and by and large lawyers are taking steps to get things right. Luke Johnson had an unhappy experience, and these are still all too common, but law firms know that experiences like that lose clients, and if nothing else one consequence of the overlawyering he describes is competition.

And while the attitudes he so pungently describes were commonplace 20 years ago, and the experiences of clients reflected this, clients today expect something very different, as does our regulator. Within law firms there is a recognition that change is not something we can or should avoid. Similarly, although there are lawyers who still fit the stereotype he portrays (and not all of them are my generation), for every one of them, there will be many more who understand that the game has changed.

Not another meeting

I have never much enjoyed internal meetings, whether management, business development, risk management, department, start the week, or whatever. When I was more closely involved in the day-to-day management of my practice they were the bane of my life. It was very refreshing reading Luke Johnson’s take on them in his FT column yesterday,

I am constantly astonished by managers in large organisations who obsessively attend internal meetings. Often these grey affairs have a dozen or more participants, each feeling they must make a contribution to justify their existence. It is my idea of corporate hell. It astonishes me to meet middle-ranking figures who have such bookings stretching not just for months ahead, but perhaps even into next year. What is it that goes on in all these crucial gatherings?

Committees almost by definition are a black hole into which time is sucked. Usually, they are planned months in advance, looming on the horizon on a Monday morning, primed to bore you to death. They are dominated by minutes, agendas, protocol and other matters of ultimate tedium. I rather admire those outfits that hold sessions where everyone has to stand up. It gives the event a real sense of urgency, I suspect. In these straitened times, such a stripped-down attitude feels rather appropriate – along with a genuinely flexible attitude to how you spend your day.

Ready and willing to lend? Pull the other one.

Jim Pickard’s post yesterday in Westminster Blog anticipated a speech to the CBI Entrepreneurs Conference by John Hutton,

“The business secretary will tell a CBI audience that business people should not lose their nerve despite the well-publicised difficulties facing lenders and borrowers”, [and that although] he will concede that fears over liquidity have spread from the stock market to “workplaces and homes” around the world, . . . banks remain “ready and willing to lend to small and medium businesses”.

I sometimes wonder whether politicians live in the same world as the rest of us, and what it is they are being told. Banks will undoubtedly continue to lend to good businesses (whatever that they may mean) but the support they offer is, at least at the moment, qualified. In the last quarter I know of three high street clearing banks that have pulled loans to prospective borrowers, causing transactions to fail. For a corrective view see Luke Johnson in today’s FT,

“Many of the main clearing banks appear to be downsizing their loan books and shrinking their balance sheets, although they are pretending the opposite. I have heard of dozens of cases in recent months where lenders have used flimsy excuses to refuse facilities to corporate borrowers – for acquisitions, capital expenditure or fresh undertakings. Fees have risen, spreads have widened, covenants have tightened and demands for added security have risen substantially. Inevitably, Robert Frost’s definition is once again proving correct: “A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.”