Mark Rigotti : Leading change in global markets

WATCH > Mark Rigotti in conversation with Maria MacNamara

Mark Rigotti the immediate past Global CEO of Herbert Smith Freehills spoke with CEO Maria MacNamara. Mark served from 2014 to 2020 and was also the chair of the first global executive, the chair of the global diversity and inclusion group and a member of the Herbert Smith Freehills Global Partnership Council. He was based in London from 2013 till 2020.

Change drives growth

Mark led the firm during a time of upheaval that included the rise of extremism, Brexit, an economic crisis and an unprecedented number of Royal Commissions in Australia. He was spared the COVID-19 pandemic, having completed his term by the time this was unfolding. In the professional services sector, particularly in the law, change drives growth.

Change is the new normal

As Mark reflects on almost eight years as Global CEO of the firm based in London he recalls arriving to “tumbleweeds going down the corridors.” Mark notes “we had at least one, maybe two capital market firms. As you say, everything from global tensions to Brexit. How do you make sense of all of that? We’d also gone through a transformational merger, we were trying to integrate two firms across 24 countries, 5,000 people. I would say 450 partners with 900 opinions. There was lots of change on the outside, lots of change inside. I think that’s actually a really good jumping off point because lawyers are trained to follow precedent. To squeeze risk out, and that is the enemy of innovation. That means change is bad. Then along came the last decade or so and all of a sudden change is normal. You don’t have an option, you have to work at how you feel, organisationally, and you respond to it. How do you make sense of it, how do you steer an organisation towards growth? It kind of became a bit of a cat cry, change is here to stay, lets get change ready. That was the first thing.”

Control what you can control

Mark recalls: “We had a mantra : Event + Response = Outcome.” He explains the rationale behind this as “stuff happens, that’s the event, you can’t change it. What you can control is how you respond to it. If you respond in the right way, in a positive way that will achieve a better outcome. That means adopting a growth mindset, being positive about actually doing things and not hunkering down but actually find opportunities instead of whining about challenges. That actually landed quite well inside our organisation. It gave people a sense of control. A sense of ‘I can do something about the situation.’ l It didn’t work every time, people still wanted to whinge about the event, or complain, but that is human nature.”

Leadership matters

In reflecting on his role as a leader, Mark observes: “I guess my role as leader was to try and create hope in the outcome by focusing on the response. Not ignoring the event but really trying to say, ok what are we going to do, so what? That’s happened, so what, what will we do? Trying to move the conversation to one of hope and the future rather than to try and lament the passing of the past.”

On foreign soil

It’s one thing to step into a new leadership role in a challenging economy. It’s another things to step into a leadership role in a challenging economy and in a foreign country where you have no network or support structure. Mark says: “I actually found that I needed support networks outside the business. I had an American mentor who had been a CEO of a listed company in London…he was able to teach me how to make sense of being an outsider living somewhere else, when to push, when not to.” Mark said: “I also found the other support network for me was a bunch of Aussies who happened to be working in the same place. You have to go and find them, but I found that actually also a great source of inspiration.”

Making an impact

There are important lessons to learn about making an impact as a leader, including looking for inspiration outside the business. Inside the business, integrity is important. Mark says for him that means having no favourites and “being a little harder on the Australians” because it was needed to build credibility.”

He says: “If i had to look back on those years, the first year felt year like no progress, the second year, a little bit of progress and the third year, was completely different…there was a hockey stick effect, you get the uplift. My advice would be, if you’re in year one or two, don’t despair…it was around year three, when it felt like people actually understood some of the language I used…I kept a piece of paper on the left hand side of my desk. At the right hand was all the stuff to get done, the left hand side was thinking stuff. It was a bit of paper with a column down the middle. At the top I wrote, what they say and what they mean.” Mark found it a useful way to bridge the cultural divide so when someone would say, ‘that’s an interesting idea Mark’, he would know what they were thinking!

Finding the common thread

The cultural question is important, when you’re leading a firm that spans the world, because you are leading a group of people with different cultures, languages and mindsets. The common elements is that in this firm, they were problem solvers. So how does a leader draw all the threads together?

Mark acknowledges that it remains a work in progress. He says: “I remember getting some training on this and it hit me like a sledgehammer, one thing I took out of working overseas was this great opportunity to work with people from different places. I remember going to Moscow, it must have been the English’s little joke on me, they said you need to go to all the offices. I’m there in Moscow, it’s February the 4th, it’s freezing, minus 20, anyway we’re in a partners meeting. It is like being in the ring with Mike Tyson. It’s just, blood and guts…I wasn’t quite ready for that, people having an attack on me, then we went to dinner, drinking and it was all happy days. The Managing Partner pulled me over and said, that’s just how we do things in Russia, it’s very full frontal!…I don’t think you can have one size to fit all, but you have to have a degree of cultural diversity to be adaptive to the environment.”

Mark also found that Zoom call etiquette is very different around the world. His Asian partners for example needed permission to speak and would wait until the most senior person spoke first. He also identifies the need to be empathetic to who each person is and where they come from, learning techniques to engage with them to make them feel more comfortable. Mark says “if they’re comfortable and safe they are more likely to say what they mean, if they’re engaged they are more likely to be productive, that was my approach.” He added “it’s probably something that you’d never get right. I think as a leader, by being authentic, you’ll get cut through and find the golden thread, and people would engage with me as a leader and a person, rather than as a CEO.”

Building a shared history

Mark observed that in the early years the firm made the effort to get people together, to forge relationships. They encouraged partners from across the world to write joint business plans and go to conferences together, as an opportunity to connect. He says “If I had my time again I’d focus less on content and more on impact.” Mark found that as people got to know each other, trust was built and they could engage more freely. He says: “I guess we did a lot of physical meetings, which seems odd in this pandemic, and the world we live in at the moment. These are the things that have probably had the most difference, and we probably had to do them in a particular order because it was a meger, then it was an integration, then it was an acceleration. But what really was good was putting people together with a common purpose and doing some leadership work on themselves.” And what would he do differently? Mark says: “less on business plans, more on people and skills.”

Client first

When you’re merging firms, it’s very easy to lose site of clients and to be distracted by the process. So how did Mark ensure this problem was avoided? He says “It’s really hard, I think we had an advantage in that we were 100% integrated profit sharing from day one. One management team, one set of corporate divisions, that was a tick. Another tick on the report card is we actually took about 10 people out of our Business Services Team, including some very senior people – that was the Integration Office for three years…We kind of carved out a certain set of activity, gave it to the professionals and let client service focus on clients. The third thing was really cheesy, and I’m almost embarrassed to mention it, but we said, you know what, we’re going to aim for a certain pound amount of extra work we get because we merged – that we wouldn’t have got if we stayed separate. And we actually had a thermometer, you know the old school thermometer for fundraising? It was 40 million pounds a year so it was chunky, and of course we had all the debates about what goes in and what doesn’t, but it was a friendly competition. I got lots of good natured stick out, but people looked at the thermometer, thank goodness we actually hit the number. That was visible. We celebrated the people that actually went and collaborated and won that extra piece of work in the Philippines that we wouldn’t have got if we hadn’t  been part of this new organisation. So, I think, they were a few of the things that we did. The thermometer in one way is measurement and celebration. I couldn’t think of a better way to do it at the time.” 

Becoming global

As the firm became global the client base changed and the focus shifted. This comes with its challenges, so what did it take? Mark says: “We actually found, back to the point of celebration, some people love the chase. That’s what they love, the pursuit orientation. So we didn’t have one rule, some people just want to look after the clients and serve them really well, and you know, make sure you’re competing in that domestic market. We tried to not say everyone needed to do the same. With some success…so I think there was a mixture of identifying people who were more global or pursuit oriented and empowering them to go after different things in different places with the benefit of a global footprint. Also still valuing those home bodies that wanted to keep the home fires burning, and then I guess, just trying to find ways to celebrate the global stuff. I have to say it is still a challenge, the biggest shift in our client base was financial services…it is such a big part of the global client base, particularly in London, where 65% of the client base is financial services now. Paris is probably not too far behind. That’s probably where we’re going down that track, then energy which was always a strength for us but is much bigger strength for the global firm.”

Embracing the new economy

Our relationship with the new economy is schizophrenic in Australia Mark observes “In financial services our banks are the envy of the world and I don’t get why the public and press give them a hard time.” Yet, when we look at fintech, Mark’s finds we’re not quite as developed as the UK ecosystem. He says: “When you come to London I’ll take you down to a Silicon Roundabout north of the city…there’s more beads and bicycles than you can poke a stick at I mean it is it’s it is amazing…we have one young partner in London – she only acts for fintechs and would not not dream of acting for a bank and to her, that is a badge of honour.” Mark observes that is a little different in the Australian market, where people feel you need to act for one of the big four banks. He recognises that while some are doing great things in the fintech sector, it can be stronger and more vibrant.

Managing a downturn

Surviving an economic downturn the scale of the GFC has had a different impact on practices in different parts of the world. Mark observes: “we’re all individually and collectively the sum of our experiences and you know it is interesting watching this pandemic and watching the leaders after me come through. There are those that were forged in Australia and they’re very driven by protecting the talent and you have those forged in France or Germany or England, where it was really tough, with four redundancy rounds in our London office in 2009, really awful.” Mark sees the difference in how those partners who are now leaders respond to the threat. The Australians are focused on protecting the talent, while those in London are focused on protecting the balance sheet. Both are, as he observed – the sum of their experiences.

Live local work global

As many global Australians return to Australia, it becomes clear that there is an opportunity, particularly in a digitally connected world, to be doing work here that has no connection to Australia. Mark explains “I’ve always wondered why there can’t be more Australians doing things from Australia which have no connection to Australia and I really learned this when I arrived in London. I sat on the M&A/ capital markets floor and 40% of the work at least – we measured this one year – was in work that had no connection to the UK.”

Stay focused

Mark is a fan of New Yorker David Rock’s Neuroleadership Institute that champions the notion of remaining focused on three priorities. He thinks that in the current environment that’s about survival and to get through this period with as little damage as possible, it’s important to “get the three buckets sorted”.

Looking around corners

Challenged to identify what he thinks would be the growth opportunities, Mark says: “…I think you mentioned the word augmentation and you know from another context I think it’s just such a powerful concept and it’s going to be the bridge to the future – because who doesn’t want to do their job faster, better and cheaper? What customer doesn’t want the same outcome?…I do like augmentation technology I think that will be really interesting. It does strike me there’s something around food… people want to be healthier, sustainability is the new normal, ESG is the number one thing…clever food solutions I think and that’s probably more in the developed world rather than developing world, but who knows? The third thing is energy…I am surprised Australia has the second highest energy prices in the world. I spent some time in Denmark on a business mission and …the debate’s over.” He says they have worked out that they have cheap energy and are looking at ways of leveraging it. There is no carbon debate, because it’s regarded as inevitable. Mark says that if he was investing, it would be in “carbon proof businesses”.

Future for graduates

Mark recommends law to young people and wants them to recognise that they will be doing law differently. The technical content and problem solving, empathy and the ability to interact with the people will be just as important as the need to adapt to constant change.

Further information

Prior to becoming Global CEO, Mark was a member of the Herbert Smith Freehills management team. He led several practice groups including Head of the Banking group, Head of the Corporate Practice and managed the global client portfolio as Managing Partner, Clients and Industries. He has led and participated in complex and challenging business turnarounds, M&A and integration projects. Before his senior leadership roles, Mark practiced in the Finance Group, advising banks, owners and financial sponsors with a focus on infrastructure, real estate and financial services. He is a member of the Business Council of Australia and the Financial Services Institute of Australia.  Mark is a Board Member of the European Australian Business Council, the Australia Korea Business Council; Redkite Children’s Charity and Marymount International School for Girls in London. Mark joined the firm in 1988 and became a partner in 1996. He was based in London from 2013 until 2020 and now operates from Sydney.

Read the wrap up > The Evolution of Work in the New Economy