On the right side of the law

The prevailing image of law firms is often one of dimly-lit studies and elderly men in wigs debating the finer technical points of the latest Act or legal order.

Failing that, it is the flash suits and mechanical indifference of fictitious American lawyers made popular by the myriad of imported TV shows and courtroom dramas.

For a service that most businesses will deal with in some capacity, it comes across as a strangely closed world that few people understand or relate to. Despite this, the legal service industry is experiencing something of a boom, with HR professionals at the heart of successful organisations.

Far from being shrouded in mystery and tradition, HR functions in the legal arena face many of the challenges affecting companies in other sectors.

“The legal sector is really a microcosm of the rest of industry because most other sectors will use law firms at some stage,” explains Raymond Jeffers, chairman of the Employment Lawyers Association (ELA).

The picture varies across the sector because there are small legal partnerships and massive international firms, but the usual issues like recruitment, retention and competitiveness are foremost in HR minds.

“The legal profession goes in cycles. Over the last few years, supply has generally been ahead of demand, but that’s changing now and recruitment and retention are becoming an issue,” adds Jeffers.

There is one major difference with most other organisations in that law firms are usually set up using a partnership structure, so that ultimate responsibility can be shared between a number of high-ranking professionals.

“You have a group of owners and a chain of command that isn’t the same as most organisations so management can be a problem, and it is something that needs to be carefully worked on. The hierarchy is less clear than in the traditional business structure.

HR practitioners are, by the nature of the business, expected to have policies that are watertight, especially with regards to employment terms.
“In terms of reputation, it could be disastrous to make mistakes on employment law issues. However, it is rare because law firms are acutely aware of the legal obligations and quick to implement any new rules,” says Jeffers.

Alison Diamond, a specialist legal recruiter at search and selection consultancy Torres and Partners, agrees that recruitment is becoming more challenging across the sector. “We are seeing a shortage of good candidates at present, both across the support functions and on the fee-earning side.

“Firms now tend to have a more commercial focus and we have also noticed that key support positions are increasingly given as much seniority and authority as partners,” she says.

“In addition, roles are becoming more commercially-focused and client-facing.”

Traditionally, law firms have used their size and reputation as the major lure to new recruits. However, it seems candidates are now looking for more, and firms are having to take a more proactive interest in employees.

The last few years have seen a real shift in the legal sector, with much of the growth coming from the commercial side of the business. This has meant that firms have had to be much more commercially aware, competitive and customer-focused.

This in turn has created a major role for HR in managing change and developing policies which enable staff to perform in the modern market.

Andrew Leaitherland, a partner at law firm DWF, believes that recruitment and retention issues, coupled with a growing awareness of the power of effective people policies, has empowered HR, and driven up standards in the sector.

“Law firms generally have had to sharpen up their act. There have been huge improvements in HR because, as employers, they have realised that essentially it is a people business.

“There are major management issues, especially around dealing with talented individuals, and the profession has traditionally been slow in adopting modern HR practices. But people are starting to embrace that now. In the past five years, there has been a real boom in modern HR practices and things are moving forward positively,” he says.

Commercial awareness is the fundamental HR issue of the moment. With many law firms battling for the same business, firms need to offer a holistic service, which is more integrated than before.

Dealing with customers and building client relationships have become the key legal battlegrounds, and it is only through people, and ultimately HR, that firms can be victorious.

David Leech, head of HR at CMS Cameron McKenna, says the function needs to concentrate on enabling staff, so they can learn and perform in a market that is becoming increasingly competitive.

“One key challenge is becoming more integrated into the business side of the organisation. We should be obsessive about the client or the people who are paying the fees and how we can have an impact on that. That’s a journey the profession is on, but there’s still a long way to go.

“Clients are becoming more savvy and wanting more for their money. That has lots of HR implications for us because we need to look carefully at areas such as project and resource management as well as how our people perform under these conditions,” he says.

However, there are other HR challenges. For example, the sector has long been criticised for its slow progress on diversity. The law has been condemned as a closed club for certain sections of society, and according to figures from the Law Society, only a fraction of practising solicitors and partners are from ethnic minorities.

“I think there’s lots of work going on across the sector to improve diversity,” says Leech. “The perception of the profession as white, middle class and middle aged is probably correct, but it is changing. More work still needs to be done though.”

Globalisation is another feature of the changing market, with US firms increasingly coming to the UK for a slice of the world’s second largest legal market. Practitioners believe this is altering the way deals have traditionally been done and challenging the status quo.

“They [international law firms] are coming to the UK because it’s one of the world’s biggest markets. They tend to be hungrier and much more aggressive in the their outlook. It’s a big challenge because you don’t need much of an infrastructure to set up over here,” says Leech.

Last year, DLA became the world’s third largest law firm following a merger with a US practice, and Robert Halton, global chief people officer at the new firm – DLA Piper Rudnick Gray Cary – is facing similar challenges.

“Unlike other organisations, the clich of people as the best asset is completely true. We don’t have any machinery or stores, so it’s the people providing the competitive edge in the market. Getting the right people is crucial to the success of a law firm, and keeping that pipeline of talent flowing is crucial,” he says

Keeping a steady stream of recruits coming into the business is more difficult in the legal field because graduates are normally selected four years before they actually take up a post. Job offers are made in the second year of university, before students graduate and go on to law school.

There is also something of a management dichotomy within the sector, as many firms have struggled to integrate lawyers with the growing numbers of support staff. Traditionally, industry has been culturally split between the legal and non-legal staff.

“In the modern market, everybody contributes to the overall business performance, and we’ve done a lot to break the barriers down. Our clients deal with all types of staff because the industry is so customer-facing,” Halton says.

HR faces other challenges, including ongoing development, providing career paths and remuneration. But the scale of the task serves to highlight the pivotal role HR is now playing in the sector.

People Report: HCM in the legal sector

London-based law firm CMS Cameron McKenna underlined its commitment to human capital management (HCM) with the publication of the first People Report – a document that measures and outlines its HR policies.

The firm has set up a dedicated people and development department, which comprises HR, learning and development and knowledge management.

Keith Pearse, director of people and development at CMS Cameron McKenna, says: “This is the first attempt to measure how we are doing on HCM. As well as measuring the financial results, we wanted to measure the HR situation within the firm. This demonstrates to the market and our own staff that these sorts of issues are incredibly important to our business and highlights our belief in our own people.”

“It also helps us identify the key HR levers, and lets us look at how we can build on them in the future. We can now proactively look at any areas of concern, but also use the results to identify the HR measures that have the greatest impact on business performance,” he adds.

The document, which is closely linked to the business strategy, also includes a number of HR-related targets.

“In the report, we mention these targets, and I hope this sends an explicit message that the people side of the business has a big impact on the bottom line. Essentially, our product depends on the quality of our people, which in turn depends on the quality of our recruitment, training and development. I think in our sector you can see a clear link between the HR measures and the bottom line.”

The legal profession

– 121,165: The number of solicitors on the roll

– 9,211: The number of private practice firms

– 43: The average age of a man with a practising certificate

– 37:The average age of a woman with a practising certificate

– 27.1: The percentage of law firms based in London

Source: The Law Society – Key Facts 2004

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