In Conversation with…

Neil Pearson and Julie Mortimer

ESG represents a significant shift in the way businesses do business and a shift in the way in which stakeholders think about business – and it’s here to stay. Our guest editor, Client Talk’s Claire Rason, sat down with Neil Pearson and Julie Mortimer of Mills & Reeves to discuss – amongst other things – why it all boils down to listening.

In Conversation with…

Neil Pearson and Julie Mortimer

ESG represents a significant shift in the way businesses do business and a shift in the way in which stakeholders think about business – and it’s here to stay. Our guest editor, Client Talk’s Claire Rason, sat down with Neil Pearson and Julie Mortimer of Mills & Reeves to discuss – amongst other things – why it all boils down to listening.

Neil Pearson, Partner, Head of ESG & Social Value, Mills & Reeves

neil.pearson@mills-reeve.com

Julie Mortimer, Director of Marketing, Mills & Reeves

julie.mortimer@mills-reeve.com

We’ve clearly come out of and, in many respects, are still in the middle of uncertain times. Given that, what is it you think clients now care about? Have the conversations you’re having shifted?

Neil Pearson (NP): There’s very much a difference in how I talk to clients in this role as opposed to when I’ve been speaking to them as a corporate tax lawyer. With that hat on, I’d be advising on developments in the business world that affected them. ESG, on the other hand, is a much wider and bigger issue. As a result, it’s a very different approach. I talk about what we're doing as a business and listen (and I mean really listen) to what they’re doing. Of course, this very much depends on the client, their size and sector. And, of course, it’s looking at best practice elsewhere to help inform those conversations.

For mid-sized organisations and smaller businesses, they often lack the dedicated resources to make the progress they’d like so they’ll often say to us “we’re particularly concerned about the S and G in ESG”. But as a mid-size business ourselves, there’s a lot of what we can say about our business that they can relate to as well as bringing in the experience of what others are doing.

We work with a lot of venture capital funds who invest in in small and medium sized businesses and they are also trying to get to grips with what it means for the businesses they invest in, and what they can do to help. We’re seeing a lot more interest from that source and their internal people asking us to talk to their own portfolio companies about issues in developing a strategy. Crucially, they recognise it helps businesses become more sustainable from a financial perspective and ultimately helps deliver value.

Information exercises, webinars, social media and running workshops are all great ways of getting clients talking to us. We don’t treat this as some ‘kind of chalk and talk’ exercise, where we present slides and talk and then shut up and that's it. We present some ideas and issues and then engage in the debate. We hear a lot from our clients this way and, once you start you do get a conversation back, it’s not just us talking to them and lecturing.

As we’ve mentioned, the reality is that the bigger organizations are very engaged in ESG. They have resources, they have budget, they have advisors and plenty of support. But there's a big gap with SMEs and they are struggling to develop their own strategy. On the other hand, they're much more open to this conversation and developing and evolving ideas and strategy, particularly one that is proportionate and relevant to the scale and size of their business.

The whole proposition of ESG isn't about us just offering a legal service to help solve a specific problem, this is around understanding their business better and helping them develop a strategy and then getting things done.

So, for instance, in our EDI team we're looking at recruiting someone whose role will be just to talk to clients and listen. And that person is not a lawyer and will simply be explaining how we've approached the issue and exploring what issues they face in a particular area. One of the concerns for medium and smaller scale businesses is that they look at what very large organisations are doing – and they are very good at marketing what they do - and it almost becomes too daunting.

The conversations I have are about getting these organisations to understand that they can set their own bar – they don’t have to be driven by the ambitions of global businesses with more resources. SMEs must try not to be paralysed by what the big boys are doing because they can take their own path and make a difference.

Julie Mortimer (JM): There are some real challenges from the governance perspective for medium sized businesses. So as a very small business, you won’t have to complete reports such as the Gender Pay gap but beyond the size threshold you do. Which means you need the systems in place to collect, analyse and report on the data and that needs people power and system to get it done.

And businesses worry about whether they’re not putting enough energy into creating the programmes and implementing the changes to improve because the resource is being used to generate the data.

As an SME, we’re not immune to these challenges so talking about what we’ve done is a great basis for engaging with our clients. And we’re very honest and will say if we haven’t quite got it nailed yet, why not and how we’re attempting to make progress.

NP: And this is what makes it such a different conversation to have when we’re talking about legal issues.

“It’s often only when you start talking to clients about wider issues and ask them to open-up that you start getting to the “what's keeping you awake at night” conversation. And from that, you can sometimes find out that they're asking you the wrong question. The more we listen, the better our ability to spot this.”

So, how does this reinforce why it’s important to speak with clients?

JM: You just get a much rounder perspective on what’s going on within a business. I know from my time client-side legal issues would be just one of the things on my worry list. I’d also have an enormous number of operational matters to deal with, of which the legal points were part of but not the entire picture. And to deliver great added value advice to clients, you have to see the broader context the advice is being delivered in and have the ability to nuance it for the that context. Talking to clients helps build the context.

NP: It’s often only when you start talking to clients about wider issues and ask them to open-up that you start getting to the “what's keeping you awake at night” conversation. And from that, you can sometimes find out that they're asking you the wrong question. The more we listen, the better our ability to spot this. And as result, clients get much better value for money as the advice is more relevant. And from a selling perspective, my speciality was tax, which is tiny area relatively for many organisations. But by having open conversations and listening, you often heard about other areas where colleagues could help the organisation.

Being frank, if we’re not talking to clients, you can bet that someone else is! And from a purely personal perspective, I learn something from every conversation with a client. To that extent that if someone invited me to a coffee or a zoom call or run a webinar I just always say yes. Because I always learn something that I didn't know before that conversation started and we should all be open to that.

There's an interesting analogy here with businesses that want their people to come back into the office. One of the reasons we want people to come back is because we know that there are those random conversations that take place when you bump into someone by the water cooler or over coffee. And sometimes something sparks that wouldn't happen in the absence of being physically together, and I think the same thing applies to client relationships.

If all we do as advisors is pick up the phone when clients have a problem or when we want to sell them a service that's a pretty poor state of affairs. Q. ESG is a topic where we don't know the answers all the time. How do you have conversations when you know that?

JM: Some humility goes a long way! The legislation may not even exist in some areas, but you can still have a conversation with the client about approaches and options.

NP: I guess the fact I come from the same background and training helps me understand the challenges lawyers sometimes have talking about ESG. Finding a solution is a bit of a unicorn for lawyers, particularly because we are programmed from birth, well, certainly law school. But ESG is not just one or a simple problem to solve. It's a shift in the way businesses do business and a shift in the way in which stakeholders think about business so it's just something completely different So when I talk to our lawyers about having ESG conversations, the big point I make is that you’re going to have a conversation in which you listen and explore.

Nobody has all the answers, there is no magic bullet for turning ESG into management projects with a start, middle and end. What I encourage people to do is share ideas, explore responses to issues and the strategies will evolve. But if we’re honest, some people are more into ESG than others. So not everyone is going to be comfortable in that environment.

JM: It's very helpful that we do have partners such as you who are happy to take that approach and talk to other partners about it as well. Whilst I can repeat that and the client care team can repeat that, coming from someone with the same background and training, it just lands better.

NP: Everything about ESG is evolving and of course, it's a very quickly changing issue. The E has been a focus for businesses for recent generations – it’s the S and G that are now getting more focus. What I love is when I see other people within the business opening up and having these conversations. I love it when somebody just comes back to me says “Hey I just run a webinar for X or Y or I’ve just had this conversation.” I want everyone in the business to be going away and having those conversations if they can - and they feel comfortable - and that's happening more.

JM: I think that is happening. We're just getting much more relaxed about going along and having an open conversation with a client, or someone we know in the business community, where we haven't got a set agenda of delivering an answer or advice. It's about “let's just hear from you about what you're struggling with” rather than us trying to push. Equally, there are times when we do go and have a conversation when we say “right we have got something we think will be useful to you” because we know other clients have been using this and have benefitted from a particular approach.

Q. So where should client listening sit within the business? With marketing, with the partners, with externals?

NP: My personal experience is that it really depends. You need to have a little think before you start the conversation. In some cases, it really helps if it’s a discussion – about let's say about environmental issues in the food and beverage space - if you understand the sector. There's some very, very specific issues, so you need to understand that industry a bit and how it works and the pressures it faces. It’s here I think it's very helpful to have let's say a partner for the food and agribusiness sector who lives and breathes the market to be part of the conversation.

And I think there is a danger if it’s solely about external perception. We can’t just treat ESG conversations as a marketing exercise.

My personal experience is that it works best when we double or triple team so you have input from different perspectives and different skills. A real benefit of marketing involvement is the wide perspective it has of all aspects of our business internally and also all aspects of what clients are doing, thinking and saying. So, being driven by one area to the exclusion of the others is quite dangerous.

JM: I’d take an even broader perspective than this. The board needs to be bought into client listening and it needs to be part of the client growth strategy. If it isn’t, then there isn’t any organisational pressure to drive a programme and there's no pressure on the partners to go and have those conversations.

A key part of my role has been making sure client listening has been on the board’s agenda, whether it’s about ESG, how we deliver legal services in the future or just feedback on how we’re doing. This then just creates the environment and expectation that this is just how we operate. And once we've got that in place, then that just enables the conversations we’ve talked about today to happen. Having that strategic framework means we’re running a range of listening programmes and bringing the perspective back into the business.

It was from one of these programmes back in spring 2019 that it became clear to us just how much of a concern ESG was for our clients. And it reflected some pressures we were seeing internally. All of which meant that we had to ask what does that mean for us as an organisation servicing those clients? What does it mean for us as a business that's got ambitions to grow? As a result, we’ve invested in people such as Neil and others to improve our own performance but also to ensure we’re able to confidently talk to our clients about ESG.

And over the last seven years, our business has been much more focused and prepared to bring the voice of the client right into the heart of the business.

NP: It’s just curious how professional services seems to have existed for so long without actually seeing that listening and feedback was important.

JM: My background was retail and FMCG where listening is baseline. Nothing moves unless you've got some sort of perspective from what clients want or some sort of feedback on how’re meeting those requirements. It’s fundamental.

I always think within professional services that there is this illusion of talking and listening to the client. And it’s because we’re having conversations with the client all the time. But the key to it is what is the conversation about? That's the difference. The areas we’ve been talking to around ESG are things that might not pop-up if you're talking about a transaction or litigation, which are very focused, tight discussions. For us client listening is about understanding about the breadth of an organisation and the breadth of our clients and what they want to talk about. The legal services we provide is a part of the picture but not the entire picture.

I think that's taken the legal services profession a while to get our heads around just because we talked to people all the time. It's not the same as having a broad conversation and listening carefully to it.

NP: But I think all the work that you've done over the years to drive that has become a central plank of the strategy of Mills and Reeve and has put us in a great position when we're faced with ESG and how to talk to our clients about it.

JM: It definitely meant - back in the spring of 2019 when we started hearing about ESG becoming so prominent especially in areas such as investment - we were well placed to start talking in much greater depth to our clients and, especially, now when the focus is really on action.

“If we’re not talking to clients, you can bet that someone else is! And from a purely personal perspective, I learn something from every conversation with a client. To that extent that if someone invited me to a coffee or a zoom call or run a webinar I just always say yes. Because I always learn something that I didn't know before that conversation started and we should all be open to that.”

Q. What conversations are you having?

JM: There is more attention on the S and G. There’s never really been a time when we’re seen leaders of businesses and originations being asked for their stance on BLM and MeToo and Ukraine, but this is now the reality. And it’s creating a real drive for the governance to be in place. And this is then starting to create more work covering the legal aspects.

NP: It was very evident from this April’s PSMG annual conference that this is right up there.

Q. Do have any top tips in terms of how we get partners to buy into client listening?

NP: Well, I know it's an old cliche about having two ears and one mouth but it's absolutely right. It’s a cliche because it's true. The temptation lawyers have is to dive in with a solution is something we just have to completely put aside when talking to clients. More generally, whether it's by accepting that nobody has the absolute right answers and there’s no magic solution, is a great starting point to have a much more open conversation.

And think about what you're going to do once you've had the conversation. Whether it’s making sure we're spreading the word of what we hear whether it's to internal stakeholders, partners or whether it's other members of the BD or HR teams. We need to think about how we use the information carefully.

JM: I absolutely agree with you on that point. Before you go into any kind of client listening programme you need to be clear as to what you think you might do at the end of it. Ultimately, you're likely to be looking at some sort of change generally. How we respond to our clients, the ways in which we listen, and how we organize ourselves equates to better service and increased value.

We need to share information and learn its full extent so sharing that around the organisation in terms of not just everyone who needs to know, but people who might just be interested. And it might just spark off something for them - back to your tangential serendipitous water cooler conversations.

NP: Yes, and I think that also comes back to what we were discussing earlier about where client listening should involve lots of people with different perspectives, not just partners. There are loads of people within the business for whom this is huge hugely relevant. And the more people that we get involved, the better we will be delivering a better service.

JM: And I think diversity of thinking is massively important in ESG where all the answers don't exist. And feeding back what we’re hearing helps spark new ideas to talk to clients about and improve our own business.

NP: Don’t be scared about doing it. Just do something. And then carry on doing something.

JM: I agree with that. I don’t think I’ve ever done any piece of client listening or feedback and come away wishing we’d never done it. We've always learned something. And even if sometimes its messages you don't want to hear, I’d rather know them and be able to respond to them.

NP: For strong and confident business, those are the most important messages to hear.

mills-reeve.com

“One of the reasons we want people to come back is because we know that there are those random conversations that take place when you bump into someone by the water cooler or over coffee. And sometimes something sparks that wouldn't happen in the absence of being physically together, and I think the same thing applies to client relationships.”

Snap Shot - Neil Pearson

2016 – now

Partner, Mills & Reeve 2014 – 2016

Consultant – Social Investment

2000 – 2014 Wragge & Co LLP (now Gowling LLP)

1985 – 2000

Edge Ellison (now Squire Paton Boggs)

Getting to Know You

Best bit of advice you’ve been given?

Listen before you speak (or email) – listening is the most underrated skill.

Best bit of advice you’d give someone at the start of their career?

Choose something you really care about – the years will fly by, and you’re most likely to succeed at the things you love doing. And choose to work for organisations whose culture fits with you.

What led you to this career?

An inspirational teacher (thank you Mr Bibby!) who suggested the law might be a good career fit. So off I trotted to study law at University and since then have been lucky enough to work with many amazing, lovely clever people.

Best holiday destination?

Samoens in the French Alps. A beautiful place where I can have a great holiday at any time of year, and keep going back to. The Scottish Highlands are a close second…

Favourite pastime?

Walking with Sarah (my wife) and Arthur (my dog), over the hills in Worcestershire where I live – and watching Aston Villa (not always enjoyable, but after 50 years of hurt I still keep going back for more….)

Snap Shot - Julie Mortimer

2016 – now

Director of Marketing, Mills & Reeve

Getting to Know You

Best advice given…

If you want something, then ask. Don’t expect people to mind read what it is you’re interested in doing or what help you might need to get you there.

Advice I’d give…

Don’t be wary of change – be flexible, open-minded, keep your skill set polished and just see what happens

What led you to this career?

A geography degree and a year teaching led me into a research job with Tesco – essentially planning where to open stores. Many out of town and metro stores later, I moved into corporate marketing and then product marketing. This then opened up a role with Whitbread which turned into a strategic planning job (essentially buying and selling businesses), which involved a lot of close working with professional services advisors from legal, accountancy and surveying. From here, I moved into corporate finance at EY and got a brilliant insight into partnerships, BD and client relationships. Then one evening walking through the not very lovely backstreets of Waterloo for my commute home, I decided that I didn’t want to do this job anymore. That weekend I saw a role advertised in the Sunday Times for a head of marketing at a law firm in Cambridge (a 10 minute cycle ride from home…) and thought “I could do that”.

Best holiday destination…

I’ve been fortunate enough to have several breaks in Japan and would happily go back time and time again. It’s just a fascinating country for so many, many reasons. It doesn’t quite feel like a holiday though as everything is so different, my head is always frantically trying to work something out whether it’s how to get from a to b or what in the world is on the plate in front of me. For relaxation, a very small town - Céret – in the far south of France, in the foothills of the Pyrenees. 27 minutes to the beach, 2 hours to the snow, an outstanding modern art museum and crazy Catalan festivals!

Favourite pastime

I love rowing, just being out on the water with a group of friends is brilliant for relaxing and getting some perspective. And studying for the practical part of the Master of Wine qualification takes up a very large chunk of my non-working time right now…exams at the end of July!