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, making it more and more difficult for law firms to merely snap their fingers to attract and retain the right number of candidates.
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Legal firms’ most prominent downfall, however, has been an outdated corporate culture that has successfully resisted all attempts at modernization and doesn’t do justice to the modern understanding of “culture”. For many legal firms, “corporate culture” remains a mystery: a vague idea that is hard to grasp and even harder to put into practice, in other words a pipe dream, often equated with “fewer billable hours”. It’s only now that some are starting to half-heartedly grasp that a change of culture is necessary but even these often still watch from the sidelines. Despite increased attempts in the recent past, most law firms haven’t managed to sustainably anchor a culture in their DNA that appeals to today’s top talents and then live it. In addition, many have failed to modernize their business model, communication and working methods. Old-school lawyers have even greeted digitization with disinterest, even as this propels other sectors into a new era.
Winning the war for talent
So, just how should future law firms achieve cultural transformation, and which cultural elements should come to the fore? The answer lies in the hands of legal leaders. An appealing and positive corporate culture that is well known in the marketplace is an essential competitive factor in the battle to secure and retain top talents. Providing an appealing, contemporary working environment can help fend off poaching moves. But 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 pass on their knowledge. And they seek authentic role models, who they can emulate and who turn collaborative tasks into inspiring teamwork.
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. Equity partners need to share these values and attitudes and not just pay lip service to them if they want to convince top talents. As in any organization, the value system cascades down from the top into the rest of the firm.
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, defining purpose, values and principles could be the solution to all of the legal sector’s shortfalls. In this way, the path to partnership, which is still rocky and involves many sacrifices, could be made easier. To win the war for talent, law firms have to make convincing offers, cultivate connections, and above all, develop their culture.