Lessons in people management from a human-centred law firm

Modern lawyers are taking a more “holistic view of success” that is putting pressure on law firms to think beyond career progression and salary perks if they want to attract and retain the best talent, writes Demetrio Zema.

In short:

• This article outlines the key factors contributing to lawyers leaving private practice.
• Firms are advised to “unlearn” existing behaviours and practices to revitalise their businesses.
• Law Squared has prospered on the back of a recruitment strategy that aligns skills and values.

Back in 2015, I was a disillusioned litigation lawyer – and it seems I was not alone. The statistics show that 60% to 70% of lawyers will leave private practice within their first five to six years, burnt out and disenfranchised. These alarming and persistent numbers demand a rethink on how we structure work and manage people in the legal profession.

Based on my own experience and confirmed by conversations I have since had with hundreds of lawyers over the years, I believe lawyers leave private practice due to one (or several) of the following reasons:

• lack of work-life balance
• a toxic or poor workplace culture
• the pressure of billable hours
• the demand to build a book of clients for success or promotion and, as a result, taking on responsibilities they are often not trained to do, or do not play to their strengths
• the wrong behaviours are celebrated and promoted.

While transitioning to in-house or to a non-legal role does not guarantee a solution to all these issues, an employee value proposition (EVP) emphasising ‘no timesheets’, a collaborative atmosphere, better work-life balance, and alignment with purpose is understandably compelling.

When I founded Law Squared, it was with the vision of creating a true alternative to the traditional law firm model, for clients and lawyers. I believed there had to be a better way for lawyers to find happiness and purpose in their careers. By putting people at the centre of everything we do, we gradually built a human-centred law firm.

Fast forward eight years, and lawyers’ expectations have caught up with this basic human desire for fulfillment, purpose and wellbeing. Today, most lawyers take a more holistic view of success that goes beyond mere career progression and salary perks.

Stopping the talent exodus

So, what does this mean for the future of the legal profession? How can we better evaluate performance and accountability away from individual financial metrics to finally stymie the talent exodus and put an end to burnout?

In building Law Squared, my experience has shown that while there is no single ‘secret ingredient’ to creating alternative performance metrics and performance management away from time and individual budgets, taking a holistic and collaborative approach undoubtably leads to a better workplace culture and encourages better behaviours. This approach requires ongoing effort and an uncomfortable process of unlearning. As futurist Jack Uldrich says, “Learning is an external act. Unlearning is an internal one.”

It is no wonder that unlearning is especially (and understandably) discomforting for a profession like the law, which has been entirely dedicated to upholding consistency, certainty and tradition.

There are some threshold requirements for creating a positive firm culture, including investment and adoption of professional development, respect for diversity, clear communication, collaborative environments and reward and recognition, none of which are based on individual financial metrics.

Our experience at Law Squared has revealed four additional elements that are critical:

1. No billable hours

I am a firm believer that time-based metrics, both as a method of billing and performance management, are a significant issue within the legal profession. Law Squared remains the only firm of its size and scope globally to operate exclusively on a fixed-fee model, with no time as a metric of performance nor billing; a fact that highlights the magnitude this shift represents to the profession.

While the benefits of fixed-fee pricing are evident to clients (e.g. cost certainty, transparency, accountability, and risk mitigation), our commitment to removing time-based metrics of billing and performance goes beyond client relations and is integral to our EVP and people strategy.

It is hardly controversial to say that ‘management by timesheet’ is an outdated approach to performance management, but it is also undeniable that it is a well-understood, simple method for managers to administer – so long as you do not mind the negative longer-term effects such as burnout, turnover and lost productivity. And that is to say nothing of the issues around timesheet padding or incentivising inefficiencies!

The binary nature of management by timesheet – where individuals are either meeting their billable targets (green = good) or falling short (red = bad) – fails to capture the complexities of our work, the value of our experience to clients, and the realities of life. It also fails to account for different skills, experiences and interests, and assumes an individual’s value is set by the hours they enter into a timesheet. Effective people management, of course, demands a more nuanced approach that recognises myriad contributions each lawyer is capable of making to their workplace.

2. Personalisation

The traditional law firm model, with its rules, strict hierarchy and reliance on billable hours, endures because it offers standardisation, predictability and efficiency for those in charge. But in a post-pandemic world, even lawyers hold expectations of greater work-life balance and will move organisations and functions to find this.

Stability is still important to employees, but they also crave flexibility in terms of how, when, and with whom they work. Greater flexibility ultimately comes down to trust between employers and employees, and will eventually require a gradual re-evaluation of everything from physical office spaces to job descriptions, employee benefits and ways of working.

Achieving this balance is not without difficulty. Lawyers also want to feel connected and supported by their organisation. While they may want to work from home at least part of the time, they also yearn for a deeper sense of belonging – a need that the individualistic nature of traditional law firms and their billing practices are ill suited to support.

We have been making changes at Law Squared in this area, too. During the past year, we have revamped our onboarding program and our entire approach to professional development. We are acknowledging that there is no one-size-fits-all approach. So, we are focusing on understanding individuals’ motivations, interests and strengths to tailor personal and professional development opportunities that truly add value to their life and are aligned to the firm’s strategy. Rather than requiring them to meet a fixed development criteria that runs up the hierarchy, we celebrate diverse career pathways within the firm.

3. Connecting purpose and impact

Increasingly, I hear senior lawyers say they are prepared to take a reduction in their remuneration to accommodate a more holistic view of wealth and success.

Determining what really constitutes wealth or success for an individual can only be revealed by conversations that go beyond conventional salary inclusions. Some recurring themes I have noticed include:

• a stronger sense of purpose in the firm’s objectives and the clients for whom they act
• meaningful connections, whether in-person or virtual
• financial security
• feeling valued and trusted by their manager and business.

Workplace practices that contradict this more holistic version of wealth, or success, are no longer seen as attractive or equitable, and will usually only be tolerated on a short-term basis.

4. Radical adaptability and adoption of technology

Transitioning to fully remote working, adoption of cloud-based technologies and platforms to increase efficiencies and remove administrative tasks, or adoption of nominal office-based ‘anchor days’ are increasingly threshold employee demands – even within law firms. But they undoubtedly put pressure on conventional people-management strategies.

From the outset, Law Squared has embraced an entirely flexible working ethos. While we have physical offices in Melbourne, Sydney, Brisbane and London, we recruit our people based on skills and values alignment, rather than on location. We trust that our people will adhere to and work by the Law Squared values and agreed behaviours. While this meant seamless continuity and competitive advantage at the start of the pandemic, it has demanded that we be more intentional about how we counteract the loss of informal knowledge transfer and social connectivity that would otherwise occur by osmosis by having everyone in the same physical workplace.

The pace of technological advancements and adoption, both within and outside of the law, puts further pressure on the billable-hour model. The profession more broadly needs to embrace technology to increase efficiencies, minimise administrative burdens and enable all members of the firm to focus their time and energy on matters which lead to client impact and positive workplace culture and behaviour.

Whether we are fully prepared or not, the legal profession has reached a pivotal moment. With collaborative technologies having seen off old objections to flexible work, the fierce competition for top legal talent may finally push even the most resistant firms to rethink the billable-hours approach. Surely, it is time to shift our focus from one where success is solely about logging hours, and build a future where our lawyers thrive, and our clients benefit? The path ahead may feel daunting, but it is a far more exciting place to be, trust me.

Demetrio Zema is the founder and director of Law Squared, a specialised commercial law and litigation firm focused on working with high-growth businesses and ASX-listed companies.

www.lawsquared.com