It’s a people thing

A law firm provides a service that is dependent on its people, including their knowledge, client-relationship skills and practical experience. Five years ago, however, few would have known where to start with HR management. Caroline Poynton talks to HR directors at Clifford Chance, CMS Cameron McKenna and DLA, as well as Professor Philip Styles of the University of Cambridge, to see how far things have changed and why.

Many organisations now talk about human capital rather than HR, testifyng to a continuing fashion for incorporating the latest management lingo into day-to-day business speak. Thankfully, however, there is some sense to the linguistic nicety as companies recognise that they can profit from better linking intangible assets – that is, people – with business development by creating a supportive environment in which knowledge is created, shared and applied, not only on an individual level, but across the whole organisation. Making the most of human capital means extending HR as a support function to a core part of the business, central to creating a culture in which individuals are committed to, and motivated by, their own development, the team’s goals and, most important of all, the overall success of the business.

Law firms, however, are rarely noted for embracing the latest management concepts, and HR directors, John Barnard of Clifford Chance, John Renz of CMS Cameron McKenna and Robert Halton of DLA, agree that few firms, even four or five years ago, really understood what was meant by the term “HR management”.

Halton joined DLA in 1997, following a period with law firm Edge Ellison and, before that, ten years with the Royal Navy. He believes that he was one of the first non-lawyers to be recruited by a law firm. “Most of the people I met who did my role back in those days had a legal background. Lawyers liked to deal with lawyers, even if that meant the job didn’t get done,” he says. Similarly, Barnard says that HR was purely an administrative function, concerned with support staff and infrastructure rather than lawyers and partners. The suggestion is that things have since changed, but why and how far? Are law firms ready to start talking human capital?

There are several challenges to law firms adopting corporate-standard, HR-management strategies. For a start the partnership structure can be inhibitive, driven by individualism and a practice-group structure that allows partners to work in silos rather than as part of an integrated whole. “You can only bring about change by convincing individuals,” says Barnard. “They’re not command-and-control organisations where one can just say ‘we’re going to do things differently’.” Barnard also points to the difficulties of dealing with an elected management, where partners potentially serve only short periods in leadership posts.

“Even if you have made the case with one particular group, you then find you have to make the case with new individuals,” he says. Add to this the restrictive qualities of the billable hour, with its terminology of chargeable/non-chargeable, fee earner/non-fee earner, language that in itself discriminates against the management functions of the firm, and the scene is set for the HR job from hell.

According to John Renz, however, legal HR was a slow starter but, paradoxically for a profession renowned for its reluctance to change, he believes that it’s now developing rapidly. “Legal HR has been driven by a number of factors not least of which has been the legal market itself and increased competition, along with a degree of concentration around a number of firms either growing rapidly or entering into mergers,” he says. What comprises this change obviously varies among firms but Professor Philip Styles of the Judge Institute of Management, University of Cambridge, has witnessed various HR plans being put into action. He says that recruitment and staffing levels form an obvious first on the HR list, but that they remain a major competitive issue. In particular, difficult decisions regarding promotion, particularly to partnership level, have been addressed in firms such as McDermot Will & Emery by publishing criteria to explain the firm’s policy of progression to partnership. Lawyers then follow development programmes for three years before any further decision is made. Styles also believes the work/life balance is becoming an important theme, with firms such as Eversheds introducing a new flexible-working initiative. This seems particularly significant given the natural difficulties of offering flexible working in a transactional environment.

Halton, Renz and Barnard are all keen to demonstrate the steps that their firms have taken to adopt HR strategies. For example, DLA has focused on improving retention rates by developing a curriculum of training for employees. It has also jettisoned the demarcation between billable and non-billable time, and introduced a distinction between client and firm time to ensure that time spent on training is not seen as wasted. Clifford Chance has been working hard to improve its appraisal, feedback and coaching activities, while progressively introducing upward feedback from associates or from members of the support staff to partners or their managers. Similarly, CMS Cameron McKenna was one of the first firms to put together a staff consultative forum, established with elected representatives from each section of the business both in the UK and internationally. The firm also conducts regular attitude surveys through its intranet, where employees can either anonymously or on a named basis express their concerns to a partner.

All of this sounds admirable, particularly as practical means of answering some of the criticism recently levelled against law firms, for example, the poor working environment, impossible targets, non-existent internal communication and insufficient feedback systems. But Styles questions whether rhetoric really matches reality. “Products/services and budgets often come before people management,” he says. “This is due to a lack of training in carrying out people management and cynicism that undertaking people management as a manager will actually lead to anything, whether individually (in terms of rewards) or for the group (in terms of improvement and effectiveness).”

Renz and Barnard agree that they still have some way to go with their HR strategies. Renz, for instance, admits that his firm has, at times, had to learn the hard way. “Treat employees as they are – professional adults,” he says. “A failure to learn that lesson can result in some extremely untimely or insensitive messages being sent out.” This honesty perhaps provides the key message impacting law firms and their implementation of HR. There are obvious positive benefits of having an HR process in place, but what will really overcome any residual scepticism are the far more worrying risks of not implementing an effective HR strategy, and of letting poor people management impact a firm’s market reputation.

This message appears to have been taken to heart by Barnard, Renz and Halton and they are keen to convey their belief that HR is more than a process; it is, they argue, a core component of a firm’s cultural make-up. Renz talks about the importance of getting case partners and practice-support managers “to live and breath what it is we set out as being best practice”. Halton goes further: “The main challenge in people management is in winning hearts and minds, and getting partners to change their behaviour.” As part of this, Halton places particular emphasis on values, which the firm agreed in 1997. “Values are about how we want to behave with each other and our clients. They’re what gives our organisation dynamism. They’re what gives our people belief.”

From an employee point of view, Styles believes the greatest cause for concern is that their contribution and performance is not adequately evaluated, rewarded and differentiated from others. This again is a cultural challenge that cannot be fixed by addressing a few internal processes. As Renz puts it: “It is about having a good working environment where you have an open and honest dialogue with people, striving to always be fair and ethical in your treatment of people, and having a coherent strategy to ensure you can create the environment where you merit and reward continuous development and learning.”

Reinforcing this idea, Barnard emphasises the importance of leadership in translating the HR message to a day-to-day level. Law firms are not renowned for their leadership skills, partly because lawyers are, by their nature, motivated by practising law rather than managing, but also because their time is often split between client work and management duties. To remedy this, Clifford Chance has brought in professional management staff, some at quite senior levels, to work with the elected leadership. “I think that has been quite effective in giving a counterpoint to partners who, on the most part when they move into a leadership role, also retain client-service responsibilities.” The firm also runs training and development programmes for partners to help them think about their roles as leaders, managers, coaches and mentors.

Leadership is an equally important element for Halton, particularly as part of a process of handing over responsibility for HR to the firm’s people. “Everybody has a leadership role,” he says, “particularly partners, because they set the tone of the organisation. If they’re the wrong sort of role model they can undermine lots of good things that are done in organisations.” Beyond partners, however, he believes that everybody needs to be responsible for managing their own roles in the firm and for ensuring that they do the best job possible. Considering he would like to keep any implementation of quality standards to a minimum, it might seem like a tall order, particularly for an expanding firm such as DLA. Halton, however, believes it can be done by affording everybody an equal level of respect and opportunity, reinforced by a rigorous, open and honest performance-management process and plenty of day-to-day communication.

It is perhaps an idealistic outlook, but one that appears to be working, as the firm has won several awards in recent years, including best law firm in the Sunday Times “100 best companies to work for 2003”. Perhaps this success can be attributed to an HR process that begins even before recruitment. The firm appoints trainees two years before they’re qualified but Halton ensures that they’re actively involved in the firm straight away, before they’ve even joined. The intention is that, by the time they arrive, the trainees already have a deep loyalty to the organisation and will ascribe fully and practically to its values. Critics might say that there is something about this that suggests DLA’s success is about recruiting clones that all ascribe to exactly the same DLA formula. Halton thinks not: “We’re looking for people who want to get involved, who take responsibility and work hard. But we also want people to have a life and enjoy themselves.”

Barnard adds: “To be effective and deliver what our clients require, we need to work effectively as a team. That team includes everybody in the firm. One of the big issues is to introduce a team-based culture where everybody understands what the priorities are and what our clients require of us.” Such comments reflect a significant trend in law firms as they move away from the often restrictive individualism and hierarchy of the traditional partnership.

Law firms, like any other business, have had to learn from their mistakes as well as successes, but talking to Barnard, Renz and Halton, it seems that progress of late has been speedy, extending HR beyond the administrative process to a core, cultural facet of the business. The legal profession is typically seen to be risk averse, but in its recent push to keep up with clients, some of the oldest constructs of the profession are crumbling under the onset of corporate ideals led by a management team brought in from outside the profession. It will come to be seen whether law firms are risking too much, their individuality and independence for example, as employees strive to fit into the proscribed culture of the firm.

Clearly, however, this is not something worrying Halton, Barnard or Renz, and there is little doubt that their efforts are making law firms much nicer places to work, which can’t be a bad thing for those involved. Concerns aside, Halton probably has it right when he talks of making everybody proud enough so that in a pub on a Friday night, when an employee tells a friend where he or she works, the friend’s reaction isn’t a quizzical, “where?” but an interested and impressed response. “If you can achieve that,” he says, “then you’ve got a winning formula.”

Are law firms ready to start talking human capital? Contrary to popular belief, they already are and, for good or ill, it’s changing the face of the legal profession.