Thought leader

Lord Clementi’s report is of immense significance to the legal profession as it impacts on regulation of the profession and business structures, together with the divisive issue of ‘Tesco law’. Nevertheless, while we all await imminent changes to the profession, the Clementi report should be seen within a context where all businesses are facing intense competition and the need to deliver ever improving client service while containing costs. Rather than waiting for Lord Clementi’s report to be published, law firms should be seeking to aggressively position themselves to deal with this demanding marketplace. In particular, firm leaders should be actively considering how they can enhance their business structure to maximise the talent of staff (including themselves) and serve the client.

Andrew Mayo writes in The Human Value of the Enterprise: “Practically every organisation in the developed world has seen a growth in the importance of services, and in the competitive advantage of knowledge in all its forms. Managing ‘talent’ and managing ‘knowledge’ have become the imperatives of the new millennium for all organisations.” Law firms are no exception and should prioritise managing talent. No law firm that I have worked with has ever claimed that it does not value people, but too often there is a lack of action to match those noble words. Managing talent does not necessarily involve the creation of a human-resource department or the implementation of a procedure (though these steps can be useful), but rather demands a deep-seated belief at the top of the organisation that all employees are the primary source of wealth creation. It is only from this belief that an effective recruitment and retention strategy can be devised.

In building on this HR agenda, managing partners can do worse than follow the example of DLA, which was able to identify in 2002 that it had saved £2m by improving its staff-retention rates. While few organisations can enjoy savings of this sum, this illustrates the potential of upholding people-friendly values. Furthermore, in a competitive market, it is not just desirable to benchmark the best law firms but also to learn from the best organisations in other fields. Having spoken to the group HR director of DLA, Robert Halton, I know that DLA has been inspired by many non-legal businesses.

Another positive step to take is to heed the words of the former head of General Electric Company, Jack Welch, when he accounted for his success in his “self confidence, candour, and an unflinching willingness to face reality, even when it’s painful”. To my knowledge, one medium-sized law firm lost all its assistant solicitors within a six-month period, together with a significant number of support staff. While it was clear that this was due to poor people management, the partners could not accept this as it would be a criticism of their ability to manage. While such an approach is understandable, the successful firms of the future will be those that possess not just the professional will to achieve but also have the humility to recognise their limitations.

Justin Patten is a solicitor and specialist in employment relations. He can be contacted at: justin@human-law.co.uk