For the longest time, law firms were able to attract and retain talent with generous monetary incentives, the prospect of partnership in the far future and the fame and glory that comes with being a corporate attorney in a reputable firm. Law students pursued a well-trodden path towards becoming a lawyer, assuming the same style of thinking, working and leading as their predecessors.
Recent shifts in the market, however, are starting to erode the legal profession’s unique status. In turn, this is stemming the supply of talent, making it harder to attract the right amount of the right people.
So, what’s behind this shift? For one, “making partner” has become highly competitive, subject to the vagaries of a firm’s policy and the prevailing market situation. Equity partnership, once the holy grail of big law firms, has lost its pull and its mythical value.
In addition, generous compensation levels alone can’t sway generation Y, who place more emphasis on an engaging and inspiring work environment, work-life balance and higher job security. As a result, many young graduates are being tempted by competitive offers from start-ups, corporations, the legal teams of big four accounting firms, as well as public service.
Shortage of culture and purpose
Legal firms’ most prominent downfall, however, has been a lack of culture: in recent decades, many law firms have failed to offer either culture, or a true and authentic purpose proposition to lawyers. While technological advances, such as digitalization, propelled other sectors towards different ways of working and communicating, law firms didn’t feel compelled to change their business model or their culture.
For many legal leaders, culture still remains a mystery – a vague idea that is hard to grasp and even harder to put into practice. It’s only now that some are starting to half-heartedly grasp that a change of culture is necessary.
Winning the war for talent
So, just how should future law firms achieve cultural transformation? Firstly, they need to lure back top talent. Germany, in particular, one of the most sophisticated legal markets in Europe, has experienced an increasingly competitive “war for talent”.
Once law firms have secured top talent, they have to provide an environment that keeps them in a sector where poaching and lateral moves are becoming ever more prevalent. As well as training them in the legal craft, talented young lawyers want their superiors to teach them how to become business savvy client managers. They want to be inspired, and surrounded by high achievers who help them up their game. And they seek authentic role models, who they can aspire to become.
It still holds true that people leave bosses, not companies, so law firms should invest in leadership skills, and in building high performing teams that foster growth to thereby create the basis for a new culture. Any shift in culture starts with new kinds of behavior. Therefore, to truly change collective organizational behavior, law firms need to unearth and develop underlying mindsets, values and attitudes to create an environment that attracts and retains top talent.
Thankfully, law firms are slowly grasping that the days of the traditional value proposition are over. Concepts that law firms never took seriously, such as diversity, legal tech, and work-life balance, are now growing in prominence, although it remains doubtful whether law firms truly embody the mindset change that is required for a long-term reformation of the legal profession.
Ultimately, purpose, value and principles could be the solution to all of the legal sector’s shortfalls, minimizing the importance of a difficult career progression and long working hours. To win the war for talent, law firms have to advance in terms of attraction, retention, and most of all, in terms of culture.