Case study: A new legal framework

Bircham Dyson Bell explains the rationale for replacing PQE with a more meritocratic career structure for its lawyers – the career development framework. At the same time, a raft of new communication initiatives helps keep them informed of other changes afoot.

By Guy Vincent, managing partner, Bircham Dyson Bell

Considering it is one of the oldest professions in the UK, the legal sector has undergone many radical changes over the past 20 years, from mid-80s deregulation allowing firms to publicly market and advertise themselves, to the 2004 Clementi report and the Legal Services Bill. More recently, it was claimed in some areas of the press that 21 May 2007 was the day the legal world changed forever, when an Australian law firm floated on the stock market.

Post-Clementi, many commentators are stating that the legal market as it stands is imbalanced, with too many law firms specialising in generally the same areas, creating an unsustainable business model for many. Consequently, in order to survive the market will have to consolidate, with many firms either forced into merging or being taken over by non-legal businesses.

In such an environment, how can any law firm stand out and implement a cohesive business strategy that enables continued growth? This was the question faced by Bircham Dyson Bell (BDB) over the past few years. We have been one of the fastest-growing firms in the country since 2001, doubling in size and turnover during that time. We now have 52 partners and over 300 staff in total. From a reputation stand point, we have also experienced great change. Where we were once seen as a traditional private-client firm in Westminster, we are now recognised for the strength of our commercial departments. In 2006 we were shortlisted Law Firm of the Year at The Lawyer Awards, and this year we have been shortlisted for a further two – Employment Team of the Year and Real Estate Team of the Year.

Following a governance review in 2005, the firm also changed its management structure, replacing its traditional executive committee framework with a new two-tier board system. For the first time in its 170-year history the firm had non-lawyers at board level – Richard Walden (HR director) and John Le Huquet (IT director) from CBRE Richard Ellis; Rod Meade (finance director) from Allen & Overy; and Nigel Higgins (marketing director) from Atisreal. The rationale behind the change was to put in place a more professional management structure - not only responsible for developing the future strategic direction of the firm, but via the professional managers, also managing the day-to-day operations.

Clear and effective communication

To help cope with the communications issues brought about by the firm’s rapid growth, including twice as many people in under five years – and in order to attract and retain high-quality staff – the management board initiated work on a new internal-communications structure appropriate for the size of the firm, as well as a wholesale review of the firm’s career structure.

The rapid increase in staff numbers to 300 created the challenge and opportunity to implement a new firm-wide internal-communications plan. Its objective was to create policies and practices that were:

Effective and practical for a growing firm – up, down and across the organisation;
Completely aligned to and supportive of the firm’s culture;
Innovative in ways that enabled staff to hear, comment and contribute to the development of the firm’s policies and practices.

Firm-wide involvement

In the spirit of BDB’s inclusive culture, the first step was to organise discussion groups across the firm.

Five group meetings were held in January 2005 and a subsequent summary report was circulated to the whole firm. In February 2005 this was closely followed by formal proposals put to all members of the firm. Unusually, perhaps even uniquely, all staff and partners were invited to endorse (or otherwise) the proposals via a ballot. Put simply, this was groundbreaking for a law firm. Giving everyone in the firm an equal vote on this issue was unheard of, but we felt it was a vital element in maintaining the open and inclusive policy that had brought success.

The ballot was 100 per cent in favour of the proposals. As well as providing genuine consultation and a ‘one person-one vote’ basis for approval, the ballot meant the firm’s internal-communication policy qualified as a ‘pre existing arrangement’ under the Information and Consultation Regulations 2005 (ICR).

Surveying opinion

The next step in the new communication policy was the inaugural staff-opinion survey in April 2005. All members of the firm, including partners, were invited to participate. The survey allowed staff to express their views on the firm in complete confidence. It contained 30 questions covering five areas:

Clients;
Communication;
Management;
Reward;
Values.

A high (72 per cent) response rate was achieved and the results were sent to all members of the firm. A second survey was then run in May 2006. This allowed the firm’s management to view measurable data upon which it could make informed decisions on how to move forward (Figure 1).

Another initiative was to hold the firm’s first annual general meeting (AGM), which took place on 26 July 2005. While this initiative wasn’t necessarily innovative in its own right, the fact the office closed early to allow all to attend represented an inclusivity that was (and is) rare in the legal sector. The firm’s financial results; plans for the coming year; staff achievements; and survey results were all presented, offering a high level of transparency to all members. The 45-minute presentation was followed by drinks and informal discussion. Staff were also invited to ask questions and give feedback (in confidence) using a special Q&A section of the intranet. Feedback was extremely positive, however, so a second AGM took place in July 2006. This focused on presenting the firm’s five-year strategy business plan to all staff.

The firm also began to produce a quarterly newsletter entitled Broadway Times. It was decided this should be edited independently from the outset – without the editorial control of management board or partners. Instead edited by the marketing department, it highlighted issues, events and initiatives across the firm, covering stories that included employees at all levels, whether fee-earner or support.

Reassessment

Some ten months after the introduction of new internal-communication methods a second opinion survey was circulated in May 2006. The average score for the communication section had improved by 11.5 per cent.

In particular three key questions in the communication section improved as shown in Table 1. Over the same period the firm’s revenue increased from £25m to £30m – a 20 per cent increase.

This quantifiably demonstrated the success of the internal communication changes since April 2005.

In addition, despite the increase in the size of the firm, annual staff turnover (as at September 2006) is
still below 10 per cent at 9.1 per cent. During the last year turnover grew by 20 per cent from £25m to £30m (2005-06), while staff numbers only increased by six per cent. This demonstrates a significant increase in staff productivity.

On the back of the internal-communication initiatives, the firm als won the award for Most Effective Internal Communications at The Lawyer HR Awards 2007.

Career change

As innovative as our new internal-communications strategy was, however, it was our new career framework that re-wrote the rulebook. The legal sector has traditionally used post-qualified experience (PQE) as a measure of career progression. Its use is outdated in the current corporate climate, however. The notion that lawyers are promoted based on how much experience they have – rather than how good they are at achieving set competency targets – is flawed. In terms of motivating staff, it is also counter-productive to say to a lawyer that he or she can’t be promoted to a certain level because they are haven’t got a certain number of years’ experience, even though they are more than good enough.

In May 2007, therefore, after gaining approval from the management board, the firm discarded the traditional use of PQE as the key component in grading solicitors, replacing it with a new competency-based structure, the career development framework (CDF). The new framework ensures people’s careers progress in line with achievements and performance, and also gives a more transparent and defined career path.

I feel strongly that its introduction not only enhances the overall employment package offered by the firm, but also provides a genuine opportunity for those of exceptional talent to rise quickly through the ranks. Such a meritocratic approach in the legal sector is innovative and groundbreaking. The CDF establishes four levels of seniority based on the achievement of specified criteria, comprising solicitor, associate, senior associate and partner. At the time we introduced it, we were able to promote nine lawyers to senior associate level and 23 to associate.

The move created headline news in the legal sector, as we led the way in terms of how law firms managed and developed the careers of their staff. More pleasing was the fact that much larger firms subsequently decided to follow suit:

Showing support

As the introduction of the CDF was a fairly bold move by the firm, it was also essential for its implementation to be communicated effectively to all staff. It consequently achieved buy-in at all levels of the firm:

All partners gave their approval and backing, including offering additional information to members of their teams;
Specifically, partners responsible for training, professional-support lawyers and a cross section of staff affected were brought in at an early stage to discuss issues raised by the proposed changes and the new career structure;
The marketing department devised and played a key role in the roll-out of an effective internal-communications strategy;
The firm’s publishing department designed and produced all supporting literature.

There are many challenges to overcome when organisations introduce major changes to their practice – from gaining buy-in from staff through effective communication, to the more practical day-to-day changes. As the core reason for implementing the two initiatives mentioned in this article was to ensure we kept our successful culture while also creating a more rewarding form of career progression for staff, we were able to introduce the measures with few problems or issues.

When managing a business there is a fine line between pushing for growth and maintaining the culture, ethos and framework that achieved success in the first place. By devising and implementing a new career framework that values excellence while also being able to effectively communicate with all staff, we have two key foundations that will help the firm to achieve the objectives to achieve over the coming years.

Guy Vincent is managing partner of Bircham Dyson Bell. He can be contacted at guyvincent@bdb-law.co.uk