In the second of a two-part series on recruitment and talent retention, Nick Humphrey outlines the formula for senior law firm managers to create an environment in which lawyers and other employees embrace hard work and fun, enhance their skills and contribute to the long-term success of the business.
The key strategies for increasing talent retention can be summarised by the acronym CARE:
There is no doubt that every firm needs to build a strong culture, and here are some ways to do it.
Celebrate and have fun: You need to build bonds between team members. Find ways to make work fun. Celebrate your wins. Be inclusive and invite everyone in the team (juniors and support staff included). Organise regular team breakfasts, dinners or drinks. Make sure you do something which suits your personal style and tone, but at the same time experiment with different events. Some ideas from a recent training session of top chief executives included: quarterly fancy dress parties, annual retreats or off-site events with external speakers, while one bought the ingredients for breakfast and the team did a ‘fry-up’ once a week.
Show gratitude: It is important that you acknowledge the hard work of your team and give credit where it is due. You need to be genuine and authentic when you do this because false praise is transparent. Consider regular random acts of kindness. Why don’t you email someone in your team or support services (such as business development or HR) and thank them for their service? Or perhaps you could forward an email from a client that is complimentary about your associate’s service to the rest of the team. Give a bunch of flowers, a bottle of wine or a shopping voucher to thank someone for working on a weekend. Success often entails doing the small things well.
Deal with conflict: Many of us hate conflict. We ignore it and hope it goes away or that someone else will sort it out. We turn a blind eye to poor behaviours by other colleagues (e.g. unrealistic deadlines, bullying etc). The problem is that the conflict will usually spiral out of control and get worse until it results in a full-blown argument, perhaps causing one of our stars to resign. Worse still, if our staff see that we don’t shield them from this conduct, it is a breach of an implicit contract that we as leaders will protect them.
Create a journey: It is important to try to make the careers of our staff interesting and exciting. Help them to go on a journey of growth. Suggest courses for them to do, send them on the next overseas conference rather than yet again sending the same senior person. Invite external speakers to chat to your team about something new and unusual. Rather than organising another CLE event on a boring technical matter, invite an expert to speak, for example, on social media, a sports psychologist to talk about ultra-performance, an advertising guru to explain the art of pitching etc. Give your team access to cross-disciplinary expertise.
McKinsey & Co has developed a useful 7-S methodology to help align strategy within organisations. This is equally powerful when used as a tool for improving employee retention given that ‘staff’ is one of the crucial elements that must be aligned with all the others.
Management needs to work with stakeholders to refine strategy and build a meaningful vision. What will success look like? How are we going to get there? What are the resources we need? What are the obstacles we will face? How are we unique?
Value-based leadership is a powerful tool and requires an agreed set of values that all stakeholders have bought into and abide by. Ensure you look to the heritage of your firm and honour the values that helped make it great – perhaps your firm has always prided itself on a particular attribute (such as being humble or open). However, you also need to unpack the challenges you are facing culturally and focus on values that drive the right behaviours.
So if your firm is bureaucratic and introspective, how about adopting Facebook’s mantra: “Move fast and break things.” The idea is that if you never break anything, you’re probably not moving fast enough.
A common complaint is that firms espouse diversity as a value but that there is very little in practice (whether it is related to gender, education or ethnicity) at the partner level, particularly in management. This is not about having a token female representative on the board; it is about authentically embracing new perspectives.
Work-life balance is another gripe. Many firms have flexible work policies, maternity leave and so on, but they then allow cultural anti-values to undermine them practically. Many associates would probably accept a lower salary to get a better quality of life (getting home earlier, not working weekends, having flexi-days). The reality of the hyper-competitive market is that clients expect 24/7 service, but leaders need to watch for burn-out and adapt (give days off in lieu, hire more lawyers to spread the load, hire contractors to provide short-term support).
A key retention factor is offering your talent a mix of high-quality work so their skills can grow. Partners need to ensure they can attract interesting and varied work for their team. As they grow, your stars will need increasingly complex work, as well as on-the-job learning and skills development.
Your talent needs to be continually but manageably stretched (in other words, slightly out of their comfort zone but not so they are stressed and out of their depth).
They will be uninspired and demotivated if they are doing dull, repetitive or menial tasks. You need to ensure you are pushing down work to the most junior person in the team so each associate is getting access to interesting, complex work.
Regular, formal training of your associates across a broad spectrum of technical and soft skills is also crucial. Firms should offer them a broad mix of technical perspectives on law (all associates should be trained in drafting, advice writing, dispute resolution, conveyancing, basics of corporate and financial law; as well as negotiation, stress management, dealing with conflict, networking etc).
This element of strategy relates to talent management. It is the integration of all the retention strategies discussed in this section. One challenge is providing alternative career paths (for example, developing a contracting model where people can work part-time or for short contracts). Some other complex issues to consider are policies for facilitating work-life balance; and embracing diversity and inclusion.
This relates to the style of management and leadership that drives the firm. As noted above, common complaints in firms are that management never consults with partners, there is little transparency and a command-control style is used. Many enormous businesses, government bodies and even the military have moved away from command and control and use flatter structures with consultative and collaborative styles. Regular and open communication is the accepted norm to ensure all stakeholders can have input and feel valued. Professional service firms need to catch up.
This relates to how your firm is structured and needs to be in alignment with your vision. For example, traditional partnership models have several flaws such as:
joint and several liability;
no balance sheet, making it hard to invest for the long-term;
no goodwill, so partners don’t feel like true owners;
archaic governance, with decisions being made by meetings of all partners (which is paralysing when you grow beyond, say, 20 partners).
Firms which can tackle these structural issues will flourish.
These are the systems used to drive alignment in the business:
A key system is remuneration (discussed further below). The issue of retention and churn must be on the agenda of management.
If you ‘get what you measure’, then firms should start tracking their churn rates and holding supervisors and management to account (in other words, remuneration is tied to contributions to retention, culture and vision, not just billings). If your firm is like the proverbial ‘Wynyard Bus’, with people getting on and off at regular intervals, then you have a serious failure of management to drive a strong cohesive culture.
Implement 360-degree feedback. That way the staff can tell you how your partners are doing on culture, training and mentoring.
Pathway-to-promotion systems are also important. Your associates need to understand how promotion works and what is expected of them. It is a problem when the process is a ‘black box’ and there is little or no transparency about prerequisites (financial or otherwise).
Another important system to implement is detailed exit reviews. You can learn a lot in these discussions. There is the risk that the leaver will either ‘hold their tongue’ and not make a fuss on the way out, or at the other extreme ‘throw a few hand-grenades’ out of frustration. Often, however, if you get the same feedback from multiple leavers you can discover the root cause. If the feedback, for example, alludes to a fear of cronyism or favouritism, then management can tackle that issue head on.
To help reduce burnout firms need to innovate around ways for associates to feel more like ‘owners’ before they are promoted to partners (e.g. special bonus points).
Firms need to remove remuneration from the equation as a push factor. It starts with good WIP/debtor management, strong margin control, managing poor performers (down or out) and ultimately comes down to ensuring you pay lawyers near the top of the range.
There are plenty of surveys which report the different bands of salaries at accounting and law firms (top tier, mid-tier, small firms) for different levels of experience. Management should assume that their practitioners have access to these reports. Nothing will aggravate your stars more than not paying them at the top of the relevant band.
It is important to note that firms are competing on an intra-industry basis. Our associates can switch to not only other firms but can go in-house (potentially being offered equity and large bonuses), start their own business, join an investment bank or advisory firm. Accounting firms are aggressively competing with law firms now, creating another avenue through which lawyers can be poached.
Salary is only one dimension of remuneration. Innovative firms are offering: performance-based bonuses, nine-day fortnights, salary sacrifice for more leave, overseas exchanges, and work-from-home opportunities.
Associates are also interested in working overseas. Firms should embrace short- and long-term secondments to overseas offices (whether their own or an affiliate). By giving your team interesting career paths within the firm, they are less likely to search outside the firm.
Training: We need to train our supervising partners and managers about retention strategies. Management also need the skills to drive cultural change – often they are high-performing partners who have moved out of specialist legal roles to a management role. Perhaps they were a great litigator or well-known workplace adviser who now requires a completely new set of skills around leadership, strategy and finance.
Coaching: Partners need to coach and mentor their staff on a real-time basis. Partners must invest enthusiastically in the career development of their team. An annual review is simply not enough. As consultant Joel A. Rose says: “More often than not, the evaluation process becomes a ‘necessary evil’, so its use as a motivational device is greatly diminished”.
Try weekly mini-sessions with positive, constructive feedback. This should be a two-way communication, where you can get insights from your staff on how things are tracking, what you as their leader can do better. Ask what resources they need, training they are interested in or where there are potential sources of conflict.
Firms need to manage high rates of churn among associates and partners. The direct costs of attrition are significant, let alone the hidden costs of lost productivity and tainted branding.
For its part, management needs to embrace the CARE model – building a strong culture and values; implementing disciplined alignment of strategy (using the 7-S model); tackling poor margins head-on to ensure remuneration can match the market; and, finally, ensuring partners are educated in retention strategies and know how to be better mentors and coaches.
Nick Humphrey is Managing Partner of Hamilton Locke. He is the chairman of the Australian Growth Company Awards and author of several books on business and leadership, including Maverick Executive: Strategies for Driving Clarity, Effectiveness and Focus.
 Joel A. Rose, “Motivating lawyers to stay with your firm”, Australian Law Management Journal – March 2012