I joined the John Lewis Partnership as its principal lawyer, employment, almost two years ago. Before that I had worked for five years in the employment legal team at Marks & Spencer plc, and so I was very familiar with the retail environment when I started my role with the partnership. I was, of course, aware that I was joining a ‘partnership’ and a co-owned business, and that therefore the ‘feel’ of my new employer was going to be different to a plc, which was answerable to the City and its shareholders. However, retail is retail, I thought. How different can it be?

But it is different. It is very different, and even now I am still learning about the business that I have joined. To this day, the entire purpose of the partnership, and the first of its seven principles as laid out in its constitution, is ‘the happiness of all its members, through their worthwhile and satisfying employment in a successful business’. Partners regularly refer to ‘P Bop’, which means ‘Powered by our Principles’ – and principle 1 is so regularly quoted that partners know it off by heart. That is because it is central to everything we do and every decision that we make.

Unlike the vast majority of large retailers which are answerable to City opinion, stock value and shareholder interests, the partnership is primarily accountable to itself and its partners who are, essentially, the primary stakeholders. It is not, of course, immune from the outside world. It cares what the City thinks and, indeed, this matters. However, the partnership is driven by a very different set of criteria and its entire reputation is founded on the uniqueness of its business, in addition to its commercial success.

The partnership is also a democracy. The chairman of the partnership is held to account by the Partnership Council, which is a democratically elected body of partners. The council meets once a quarter in an open forum to discuss matters central to the partnership. Business decisions and policies are scrutinised and debated, and any changes to core matters that relate directly to the constitution are subject to vote by the council. Five elected councillors also sit on the Partnership Board, alongside the chairman of the partnership, the managing directors of John Lewis and Waitrose and other key board members. Partners are therefore represented at the highest possible level within the business.

Seeing the democracy in action is impressive, and I have watched with interest as matters that I have advised upon are debated and justified between the Partnership Council and business management. Partnership Council is the partnership in action in its purest form and a regular reminder of what is so special about the business. For me, all of this has meant a subtle shift in the way that I think and advise. The law is, of course, the same, but how it is applied can be quite different. Partner interest comes first and foremost, but always with an eye to the commercial success of the business. This is something of a balancing act and it is not always easy. It is, however, crucial.

Bearing in mind how central the wellbeing of partners is to everything that the partnership does, you may think that application of employment law within its bounds is easy. Surely the partnership must do everything that the law requires and beyond? Well, yes it does, and the partnership’s constitution is clear that it must aim to not only obey the letter of the law, but the spirit of the law as well. However, what can make this complicated is that the partnership likes (and indeed needs) to do this in its own way to protect its uniqueness.

This can be tough because, unlike many businesses, the partnership has been doing the right thing by its partners for almost a century. It has done it unprompted, in its own way, and without external intervention, and this has worked extremely well.

But now the law has caught up in a big way and the partnership can find itself needing to change things which it has always done and done well, to comply with external regulation. It does not question that this is necessary, but the compromise is that it needs to think creatively and to ensure that while it complies with the law, it does so in a way that never strays from its principles. This is a regular challenge.

As co-owners, partners are encouraged to think for themselves and, while policies exist, line management judgement and discretion are encouraged in the implementation of policies. In an employee-controlled model this is important, but from an employment law perspective it can present risk. What if one manager’s judgement is different from another’s? Is this fair? To issue stringent rules and procedures would have a detrimental impact on the nature of the partnership and limit the flexibility of discretion.

Barriers to a successful move in-house

Recent research conducted by consultants at the Professional Career Partnership (PCP) analysed the experiences of lawyers from private practice who had made the move in-house.

Among the key skills identified was the ability to manage company politics. Working out who are the key decision-makers and gatekeepers to success in the organisation is often a very difficult process.

The transition from the status of ‘golden child’ bringing in significant fees for the law firm employer to being part of the support function to a business also involves a significant change in approach and understanding.

To ensure that the adaptation to a new environment was a success, three ‘interventions’ were considered especially valuable:

  • A properly structured (not ad hoc) mentoring scheme.

  • Tailored inductions specific to the legal function to develop business, managerial, risk management and communication/stakeholder management skills.

  • One-to-one coaching for individual lawyers to develop management and political awareness, plus essential skills to become an effective partner in supporting and even leading the business.

    The people involved needed to:

    • Form key alliances at an early stage in the business, upwards (management), sideways (colleagues) and downwards (support staff);

    • Raise their own profile in a supportive, ‘non-threatening’ way, for example by joining groups with ‘vertical impact’; and

    • Build ‘strategic’ networks outside their own operational networks and often outside the organisation itself, to place themselves in the strongest position to succeed.

      Research was based on data and detailed interviews from 25 businesses and their in-house lawyers

Therefore much of my job is to help strike the right balance. The partnership trusts that partners will do the right thing and, for the most part, they do. A large part of my role therefore is to facilitate this and educate partners to understand what the right thing is so that their judgement and discretion are informed.

For an organisation of this size, employment litigation is surprisingly low and I think that this is for a number of reasons. The first of these is registry, an unusual, but necessary, part of the partnership structure that acts as the independent custodian of the partnership ethos. A check and balance, if you like. As the new girl on the block, I was used to providing my legal advice to HR which would then act accordingly. I was therefore slightly flummoxed by the mysterious, yet regular, appearance of a registrar at meetings to discuss partner issues.

However, it did not take me long to work out their worth. For example, situations I was fully expecting to explode into an unpleasant stand-off between management and non-management partners somehow did not. Registry was acting as the check and balance, and the benefit was simple. The business was able to act as it needed to from a commercial perspective, but equally the partner felt supported and listened to. That is not to say that there is always a happy ending. Difficult decisions have to be made as they are in any business and unpleasant litigation can result. However, registry plays an important part in upholding the all-important Principle 1.

Partners also have a constitutional right to challenge and question managers on any matter by writing to the partnership’s weekly publication, the Gazette. The letters are published, anonymously or by name (the author’s choice), and must be responded to within three weeks by the senior manager or director responsible for the matter referenced in the letter. Topics range from the chairman’s pay to matters of investment, growth of the business and general policy matters. No topic is off limits unless it is malicious or offensive, and partners are entitled to raise any concern and receive an answer. The result is that partners have their say, feel more in control of their work environment and are therefore more satisfied and happy with their employment.

That is not to say that working within the partnership comes without frustrations. For example, decision-making can be slow, because everybody’s opinion counts and must be considered. It is therefore not always easy to get things done, as a consensus might take time to achieve. However, on the plus side, this is, at the very least, evidence that the partnership truly is a democracy in which every voice, including mine, has a right to be heard. At the end of the day, it does get things done – and extremely successfully. So, patience is a virtue – something else I have learned.

Since I arrived at John Lewis, I have met many partners with long service and there are regular jokes about blood running green. While mine is not yet entirely green, there is perhaps a slight tinge if you look closely. I am very aware that I am involved in something special and unique, and feel quite keenly that I am one of about 80,000 custodians of a legacy that needs protecting for future generations. It works and I am proud to be a part of it.

  • The Law Society is to launch a new service for in-house lawyers this autumn. The In-house Division is free to join and will provide access to tailored support, updates and guidance for in-house lawyers working in both the private and public sectors. To register your interest, email marketing@lawsociety.org.uk, quoting ‘In-house Division’ in the subject line.