Why are so may top airline posts filled by lawyers? Michael Bell, co-leader of the global aviation practice at executive search firm Spencer Stuart, suggests that it is often a natural fit.
For some reason, lawyers have a knack of surfacing at the top of airline organisations and they are at it again. Last month's appointment of Jeff Smisek as president and chief operating officer at Continental Airlines is further evidence of the relevance of a legal background to the top executive positions.
Smisek is far from alone. When Northwest Airlines reshaped the management team in 2001, lawyers took the lead -both chief executive Richard Anderson and president Doug Steenland hail from a legal background. Until Jim Parker's recent departure from the chief executive post at Southwest Airlines, both that and the role of chairman (Herb Kelleher) were occupied by lawyers.
Neither is this phenomenon restricted to the USA. Many foreign carriers have had senior lawyers at their helm, including Robert Ayling (formerly at British Airways) and Jean-Cyril Spinetta (Air France). Nor is this a recent trend. Bill Franke, chief executive of America West Airlines during the 1990s, was a lawyer as was Phil Bakes, chief executive of Eastern at the outset of the 1990s, among many others.
But why? The answer probably lies in the fact that the law lies at the heart of virtually every aspect of airline business - regulation, labour, mergers and acquisitions, aircraft transactions, commercial agreements, alliances and international relations, anti-trust, bankruptcies and accidents.
Virtually every airline transaction or decision is replete with legal considerations and most airline chief executives are wary of acting without sound counsel at their side. As a result, airline lawyers get involved in everything, from the strategic to the operational. The lawyers not only learn the business, but also work closely with the chief executive and the board, and through this, they develop the chief executive mindset.
Cynics might argue that the lawyers can be blamed for the state of the industry around the globe. The facts are, though, that lawyers have been among the most effective leaders and change agents the industry has seen - Kelleher being a fine example. They provide strong and focussed leadership and they are also invaluable counsellors "behind the scenes", in the corporate office and the boardroom.
Many successful airline heads have relied heavily on the advice of their general counsels - Stephen Wolf with Larry Nagin, Bill Franke with Steve Johnson, the late Michael Chowdry with Clark Onstadt.
Of late, airline chief executives have been demanding that their general counsels bring as much business savvy as legal expertise. Spencer Stuart's recent placement of Jim Walsh as senior vice-president and general counsel at America West Airlines was based on what he brought to the group's top management team table, not just as a lawyer but as an equal contributor to the direction of the business.
So, like it or not, airline leadership and lawyers are a going concern. And unless the industry loses all form of regulation, becomes significantly less litigious, or ceases its expansion and consolidation cycles, this will be the case for some time yet to come.
Source: Airline Business
