Practice of law proving good springboard for CEO role

Businesspeople should think twice before cracking their next lawyer joke. An attorney might just be their boss one day.

Despite the sometimes less-than-stellar reputation lawyers have in the business world — for reasons including the billable hour, speaking in legalese jargon rather than practical business terms, and their tendency toward extreme risk aversion and “analysis paralysis” in a world in which opportunities need to be seized quickly — attorneys disproportionately find themselves in the role of chief executive officer, according to a recent study.

Massachusetts lawyers who have made the journey from law firm to C suite say it’s not necessarily the most direct or logical career path, but that practicing law does both provide valuable access to the business community and develops skills useful to an executive.

“I just look at problems very differently, and I just think it is those analytical skills that have really helped me,” says former corporate attorney Mary-Alice Brady of Boston, founder and CEO of MosaicHub, an online community, resource center and expert directory for early-stage businesses. “Plus, my network is very valuable.”

About 10 percent of CEOs of large American companies have law degrees, whereas only approximately 1 percent of the workforce has a JD, according to “The Million-Dollar Law Degree,” a study published in April by professors Michael Simkovic of Seton Hall University Law School and Frank McIntyre of Rutgers Business School.

“Although few law degree holders become CEOs of leading companies, the disproportionate representation of law degree holders among top CEOs suggest that there are a large number of law degree holders at high-level positions in the business world, a few of which eventually rise to become CEOs,” the authors write.

The study found that “the economic value of a law degree turns not on whether law graduates practice law, but rather on how much more readily they find work with the law degree than they would have without, and how much more they earn with the law degree than they would have without.”

The authors conclude that, despite struggles in the legal industry leading some to argue that law school is irrational and not worth the cost, “a law degree is associated with a 60 percent increase in monthly earnings and 50 percent increase in median hourly wages” and has a mean pre-tax lifetime value of about $1 million.

The question of whether a law degree is a logical path to the CEO position was the subject of a project conducted by three Boston College JD/MBA joint-degree students this past spring. The students spent three months interviewing 18 CEOs — from the Fortune 500 to early-stage emerging businesses — who, at one point in their careers, had been practicing attorneys, and made a number of interesting observations (see sidebar).

“It is not easy to make the leap from advisor and counselor to leader and executor,” says Scott F. McDermott, the Boston College business lecturer, and a former lawyer himself, who oversaw the project.

For the passion, not the money

Brady was one of the lawyer-turned-CEOs interviewed for the project, as was Jonathan W. Painter, CEO of Westford, Mass.-based Kadant, a publicly traded supplier to the global pulp and paper industry with more than 1,600 employees and $332 million in 2012 revenue. Both Brady and Painter started as corporate attorneys at big Boston firms, found themselves increasingly drawn to the business community they were advising, and eventually took in-house counsel positions at large companies.

Brady was admitted to the bar in 1999 and started her career at Ropes & Gray. She worked extensively with early-stage businesses, helping them with venture capital and general representation. But as Ropes grew and the dot-com bubble burst, Brady found herself doing more leveraged buyout deals than anything else.

“I really missed working with businesses on an ongoing basis as opposed to just doing transactions,” Brady recalls. “There was something I really liked about working with businesses and advising them through struggles.”

Her feelings grew into a desire to actually join a business, which she did by taking an in-house job at Fidelity. That’s also when she started thinking about her attraction to the early-stage startup world and considered launching her own business.

Her next step was to become the general counsel for Cambridge, Mass., venture capital firm General Catalyst. While she was there, Brady found herself answering the same questions over and over for General Catalyst’s portfolio companies, and the idea for her own business was formed.

Brady started MosaicHub about a year and a half ago while still working at General Catalyst, and then left the company to focus on her business full time about six months later.

“Connecting businesses with the right experts and resources is very time-consuming,” Brady says. “My goal is to make it easier for businesses to find the right business help — marketing, social media, accountants. We’re working on creating a Yelp for business experts. Being able to find, evaluate and compare business experts in one place is what I find is the real value, and so we’re really working on building that part of the business and making it a core feature.”

Painter also enjoyed counseling business clients as a young lawyer at Nutter, McClennen & Fish and started making a name for himself in the business community.

“One of the benefits of being a young lawyer is you’re put on deals that are a big deal to your client,” he says. “You’re given the opportunity to show that you’re a bright young person with good sense. I think it helped my career tremendously.”

After three years with Nutter, Painter went in-house at Thermo Fisher (formerly known as Thermo Electron) in 1988. Again he was in a position to impress high-level executives given the nature of his position, and he was recruited to the business development side of one of Thermo’s subsidiaries in 1992. The subsidiary was later spun off and became Kadant; Painter became its CEO in 2010.

Painter compares his experience to that of a colleague who started as an engineer and became chief operating officer. While Painter’s colleague was working deep within the organization and climbing through the ranks in a more traditional way, Painter was advising senior executives from the outset, gaining invaluable experience and access.

“After a while, you look around and think, I could do that, too,” Painter says. “Every CEO comes up a different path, but they all have to surround themselves with people who are strong where they’re weak.”

For Painter, that means leaning heavily on colleagues such as the COO when it comes to the technical engineering aspects of the business, but he feels very at home when it comes to transactions and assessing opportunities and risks.

“CEOs also have to be able to convince people of their vision for the company,” Painter says. “And lawyers are trained to be persuasive.”

Painter is quick to point out that he didn’t quit the practice because he didn’t like it.

“I enjoyed the law,” Painter says. “It wasn’t something I was trying to get out of.”

While she didn’t care for the unpredictability of the schedule, Brady says a part of her misses practicing law and that leaving a steady job with “awesome” compensation two years before making partner was a scary proposition.

“A lot of people think I just quit my job and started my own business,” she says. “It took years. I hired a business coach.”

Brady advises other lawyers leaving the law to be similarly cautious, especially if they plan to start their own business like she did. Brady has funded MosaicHub with, and lives off, the money she saved as an attorney. Any profits the business generates are reinvested in it.

“Starting a business is one of the most difficult things I’ve ever done,” she says. “It’s very rewarding, but it’s not something you should just quit your job and start. … You have to do it not for the money, but for the passion.”

While both Painter and Brady value their law degrees and legal practice backgrounds, for those who already know they want to be business leaders, going to business school probably makes more sense, they say, given that an MBA is usually less expensive and can be earned in two years rather than three.

“I am passionate about our judicial system,” Brady says. “I went into law school knowing I had that strong interest, and if you don’t have that strong interest, law school is painful. I don’t think you really want to spend three years miserable if you don’t need to be.”