Design, governance, and style

No matter which structure you land on, it’s always the clarity of definition around roles and responsibilities—and communication, communication, communication— that will determine the success of your matrix model.”
—Phil Rohrbaugh, Vice Chair of the U.S. firm and Managing Partner of the Chicago office, KPMG

You need to have a governance system in which the authority and the responsibility to make certain decisions is assigned to a set group of people so the aircraft carrier of a law firm can navigate the seas.”
—Ralph Baxter, Chairman and CEO, Orrick

We really hate bureaucracy. That is why we are pretty flat and there is not a lot of politics happening here.”
—Donna Imperato, President and CEO, Cohn & Wolfe

Organizational Structure: The Scaffolding That Supports the Firm

In a professional service firm, a conventional linear diagram doesn’t really represent power or the reality of how organizations work. People-based organizations have a delicate balance of responsibility and commitment.”

We value being as flat as possible. The premise is we believe the best decisions can be made as close to the client as possible.”

While many variations emerged, the organization charts of the firms surveyed proved to be remarkably similar in their basic configuration, as shown in Exhibit 10.3.


Exhibit 10.3

At the upper layer of the chart is the firm’s top leadership team, often consisting of one or two oversight groups: a board of directors and/or a management committee, and a chairman and/or CEO. Directly below this level is a second layer that includes the leaders of various business units, typically heads of regions, practices or industries depending on how the firm is organized; the heads of key administrative support functions; and senior professionals who manage special functions and high-profile initiatives of importance to the firm. Underpinning the entire organization is a fluid network of cross-functional, often cross-border teams that are attached to clients, services, and geographies, and a host of specialized activities such as intellectual capital development, training, and growth initiatives.

Variations on structure are driven primarily by differences in size, geographic reach, practice diversity, and culture. We found an overwhelming preference among the best-run firms interviewed for lean organizational structures that keep both hierarchical reporting and bureaucracy to a minimum. The following sections describe each organizational layer in a typical PSF structure.