Full text of op-ed first published in the Australian Financial Review on 2 August 2019.
Almost all large and mid-sized law firms have an in-house human resources (HR) team to handle recruitment, development, reward and other people issues. A high-performing trusted HR team is essential in winning the war for top talent.
Unfortunately, many firms are shooting themselves in the foot by having poor relationships in and around HR.
At its extreme, it goes something like this…
HR team members perceive their firm’s partners to be disrespectful, disempowering and ignorant of the value that HR professionals can really bring. They feel excluded from critical conversations concerning performance management, remuneration and workforce strategy, especially for partners and senior practitioners. They are frustrated by people that don’t show up to important HR-initiated meetings, and if they do, they’re there in body but not in mind or spirit.
One the other side of the fence, the firm’s partners have an ambivalent or even hostile attitude toward their HR team. They perceive them to be process-driven, uncommercial, reactive and superficial fad surfers. Partners discount their advice because HR team members appear to lack deep knowledge of firm economics, firm strategy and broader legal market trends.
The consequences
In practice, this chicken or egg standoff results in things like:
- Being too slow to respond to new talent opportunities and missing out
- Being unaware of flight risks and reacting too late
- More ‘ow’ than ‘wow’ in employee experience
- Low impact and clunky performance management
- Incomplete HR data and unreliable analytics
- Wasted training and development resources
- Expensive HR practitioners doing low-level process work
- Partners second-guessing decisions in areas they have little or no expertise.
Accumulatively these problems add cost and become a strategy handbrake. Over time, firms simply become less competitive.
Addressing the problem
There are five things firms should consider doing to address this problem:
1. Call it out. The standoff scenario described above is extreme. This problem may only exist in pockets or not at all, but it’s good to know the truth. An honest and comprehensive review of what’s working and what’s not can isolate what’s really needed. This review should not be seen as a HR witch-hunt, but rather how the firm’s partners and the HR team can truly collaborate to give the firm a competitive edge.
2. Improve the science. Many HR initiatives are (a little unfairly) perceived as soft and fluffy and requiring a big leap of faith when it comes to return on investment. Applying the principles and practices of data science to HR can set the stage for true impact. New HR initiatives supported by compelling evidence will get much greater interest and uptake. There are myriad of fresh valuable insights waiting to be discovered from mining HR data and especially in the linkages with financial, operational and client data.
3. Calibrate risk profile. Many HR decisions come with big risks. For example, a bad new recruit can become a cultural terrorist, or a poor reward decision can lead to a regrettable departure. These risks push many HR teams towards being very conservative and opting for the path of least resistance. This approach can be sub-optimal especially if the firm is trying to innovate and create a growth culture. A joint effort by the firm’s leaders and HR to calibrate HR decision risks and policy will go a long way to avoid blame-shifting and getting strategic alignment.
4. Create lateral leaders. As with all business service functions, HR has lots of responsibility but with little or no formal authority. This means HR practitioners have to develop lateral leadership skills to work across the organisation as influencers and catalysts for change. They need to learn to lean-in and develop the personal gravitas to have their voice heard.
5. Learn from IT. Many law firm IT departments have moved to a co-sourcing approach with the outsourcing and automation of low-level process, support and compliance activity, and insourcing of high-level advisory work and R&D. The managed service model is maturing at a rapid rate and HR should embrace this trend to focus their energies in becoming true trusted advisors.
‘True trusted advisors’! Surely that’s a better vision than process-driven, uncommercial fad-surfers?
business, change management, culture, governance, growth, innovation, planning, professional service firms, strategy management
Law firm partnerships could give BHP a productivity lesson
In Articles, Commentary on 7 September 2019 at 10:03 amFull text of my opinion piece first published in the Australian Financial Review on 6 September 2019.
CEO Andrew Mackenzie and the top 200 global executives at BHP Billiton do not dig for iron ore, or cart coal, or drill for oil. They are 100 per cent dedicated to the task of leading and managing their company.
In contrast, almost all of the top 200 global partners in Herbert Smith Freehills (HSF) are involved in legal service production in some way. This includes advising clients, supervising the legal work done by juniors and pursuing new opportunities.
A BHP vs HSF comparison points to one of the key differences between law firm partnerships and corporations; almost all senior people in law firms have a producer-manager-leader (PML) role.
As producers they win and deliver legal work; as managers they organise and control people, processes, resources and facilities; and as leaders they help set direction, align constituencies, innovate and inspire others to perform at a higher level.
There is strong evidence that most law firm partners bias production over their management and leadership roles. The reasons for this are both structural and personal.
Proof of legal excellence and client followership are the most common ways people get promoted. Production-related outcomes are the things that are celebrated and rewarded – acquiring new clients, winning high profile cases, beating budgets, winning awards and ranking higher in directories.
Entitled Millenials
Ask partners what they enjoy the most in the job, the most common response is helping clients solve really important complex problems. The thing they enjoy least is dealing with entitled millennials.
As the business of legal becomes more complex and competitive, so does the importance of effective leadership and management.
As firms grow there are more cats to herd.
As legal technology evolves there are bigger strategic bets to place.
As client expectations and sophistication rises, so firms have to deliver more for less and still make a buck.
As younger lawyers leave the profession in droves, firms have to do much better at engaging top talent.
One obvious solution to deal with this production-bias is to employ full-time specialised managers and leaders and let the lawyers just do law.
This thinking is seriously flawed.
Rather than blindly follow what corporations do, law firms should wholeheartedly embrace the PML model and just work harder at addressing the problems listed above.
Empowered self-managed teams
PML results in law firms being run as a network of highly empowered self-managed teams. There’s no middle management pushing papers and inventing new reports. There’s no CBD head office tower filled with bureaucrats. There’s no intricate incentive system to extract more discretionary effort from senior executives.
In the main, premium law firms are highly profitable perpetual engines of productivity. As an organisational form, traditional partnerships create wealth, share wealth and reduce risk very effectively.
Boris Groysberg of the Harvard Business School mentioned during his recent Australian tour that many large corporations are in fact trying to move towards the PML model. They see the obvious benefits of reducing overheads, fostering empowerment and having executives much closer to customers.
The key lesson is for law firms to reframe their whole talent system around the PML model. This means hiring more rounded legal graduates. It means providing non-legal training, especially in people skills, at all career stages. It means fast-tracking those with obvious leadership potential to senior roles more quickly. It means adding new elements to the symbols and measures of success.
It also means support for incumbent partners to better manage the trade-offs and tensions across their current portfolio of responsibilities.
The frequently cited claim that the partnership model is an anachronism is misguided. Having an empowered organisation with almost everyone on the tools in some way would make BHP’s Andrew Mackenzie think he’s discovered another Pilbara.
Share this:
Like this: