Issue 20, Fall 2007

www.idaabbott.com
 

This issue of Management Solutions looks at the importance of keeping associates engaged. Successful retention efforts depend on associates being engaged and enthusiastic about the work they do, the people they work with and the firm that employs them. We explore factors that drive engagement and measures that increase it.

I recently participated in a national conference in Melbourne, Australia, sponsored by the Australian Legal Practice Managers Association (ALPMA). Some of the similarities and differences in management issues faced by law firms in both Australia and the United States are discussed below.

Be sure to save the dates of the
2008 Hastings Leadership Academy for Women:
May 29-31 and July 17-19, 2008
  

CONTENTS OF THIS ISSUE

The Rules of Engagement

Law Practice Management in Australia

Save the Dates:
The 2008 Hastings Leadership
Academy for Women

Publications

Speaking Engagements

 

 The Rules of Engagement

Retaining associates remains a major challenge for law firms. Firms spend a fortune to recruit talented lawyers and they hope that those who perform well will stay. They do not expect to achieve 100% retention, which is unrealistic. Some associates will be asked to leave because of sub-par performance or a decline in available work, as in structured finance practice today. But firms will also lose associates they would like to keep. Lawyers' changing attitudes toward employment and careers, the diverse aspirations of young lawyers, and the leveraged law firm model limiting slots for new partners means that many talented associates will leave despite the firm's best efforts.

Does this mean that firms should give up trying to keep associates? Not at all. But their focus should shift to keeping associates engaged in their work instead of thinking just about keeping them in the firm. Engagement is a state of emotional and intellectual commitment. That commitment determines how hard lawyers work and how long they stay. In a workplace where lawyers are fully engaged, they are likely to remain longer than they would otherwise, and to perform at the highest levels while they are at work. If and when they leave the firm, they do so on good terms, speak well of the firm, and refer it business. Sometimes they even return.

What is Engagement? Engagement can be demonstrated by three primary behaviors 1:

  • Say: The associate speaks positively about the firm to people inside and outside the firm, and refers potential clients and employees to the firm.
  • Stay: The associate intensely desires to be a member of the firm even when there are opportunities to work elsewhere.
  • Strive: The associate exerts great effort and "goes the extra mile" to contribute to firm success.

Engagement should not be confused with satisfaction. Satisfied associates may feel good about their job, the people and the firm, and do what is expected of them. Engaged associates feel committed to the firm and want to be a factor in the firm's success. They exert discretionary effort, i.e., the voluntary effort above and beyond what the firm requires. They work harder, stay longer, and add more value to the firm.

Why is engagement important? Numerous studies have shown a definitive connection between employee engagement and high performance, financial results and retention. In a study of 50,000 employees worldwide, the Corporate Leadership Council, an organization of human resources executives, found that the most highly engaged employees perform 20% better and are 87% less likely to leave the organization. 2 The 2007 Global Workforce Study by human resource company Towers Perrin found that 40 global companies with the most engaged employees collectively increased operating income 19% and earnings per share 28% year to year. In contrast, those companies with the least engaged employees showed year-to-year declines of -33% in operating income and -11% in earnings per share. 3

The Towers Perrin study also found a direct connection between engagement and retention. 85% of those who were disengaged planned to leave the firm and more than 25% of them were actively looking for another job. In contrast, less than 5% of the engaged employees were looking for other jobs.

Are law firm associates engaged? Clearly some are. A recent study of associate motivation by Hildebrandt International found that about one-quarter of associates have "traditional aspirations" toward partnership and are willing to sacrifice their personal life to get there. 4  They appear to be highly engaged.

But two other recent studies show that many associates are so disengaged that they plan to leave their current employers – even though they are generally satisfied. NALP's  2007 monograph, Women in the Profession: Findings from the First Wave of the After the JD Study, found that associates are generally content in their jobs. 5 However, they also found that 34% of women and 29% of men expected to leave their current employer within 2 years. Moreover, 16% of women and 11% of men were actively looking for other jobs. (The report notes that more men than women had already changed jobs at least once at the time of the survey.) Similarly, a British survey by Legal Business of lawyers in large US and UK firms found that some firms are losing up to 30% of their lawyers each year, and that fewer than 20% of junior lawyers expect to be in their current jobs in five years. 6

Engaging Associates. Associates are smart, hard working, and highly motivated, with the potential to be excellent lawyers. What they want most is to achieve that potential. They expect this will happen through the work they do and the teaching, mentoring and opportunities they receive from those around them. Even if their perspective of the future is relatively short, they are eager to be engaged.

Unfortunately, law firms do not do enough to nurture and sustain their engagement. In fact, many law firms de-motivate associates. They take individuals with great talent, energy and a desire to succeed, and crush their ambition by focusing on billable hours, ignoring the quality of their work experience, and failing to address the various factors that engender loyalty and peak performance.

What can firms do to increase associate engagement? Here are ten areas where firms can direct their efforts:

  • Personal attention from partners. In virtually every study of law firm life, associates complain about the lack of training, mentoring and on-the-job learning. 7 In order to feel engaged in the firm, associates must feel that the firm is committed to helping them become the best lawyers they can be. This requires personal investment of time and effort by individual partners who are aware of and responsive to particular associate needs.
  • Interesting legal work. The quality of lawyers' work is integral to their professional and personal development, and is a fundamental driver of associate engagement. Lawyers learn to practice law experientially, i.e., through the work they do. High-quality work that is interesting and challenging keeps a lawyer's intellectual juices flowing.

Allowing associates to do work that interests them is essential. It is very hard for any individual to feel engaged in work that they do not enjoy. Associates should have a chance to try various practice areas, or to change practice areas if necessary, so that their interests and talents best match the work they do.

  • Meaningful work experience. To keep associates engaged, firms need to monitor carefully the kind and amount of work associate receive. Work allocation systems and appropriate staffing can produce good work experiences. Associates need stretch assignments and steadily increasing responsibility. Mundane, repetitive and boring work will deaden a lawyer's interest. Firms cannot promise associates that all work will be exciting, but they can ensure that some of their work is, and that the overall work experience is meaningful, stimulating and furthers their professional growth. 

Within assignments, associates need good supervision that includes: well-organized and executed case management; collaborative approaches to work; participation in client meetings, team discussions and strategy sessions; explanations of work assignments; feedback on their performance; and effective use of technology.

  • Opportunities for one-on-one learning. Engaged associates feel they are acquiring the knowledge and developing the skills that will make them outstanding practitioners. Law firms conduct many fine training programs for associates, often with extensive and sophisticated curricula. These programs demonstrate the firm's commitment to learning, bolster development, and increase associate satisfaction. But classroom programs cannot substitute for the one-on-one attention, teaching and guidance associates want from more experienced lawyers. 

Associates want mentors. Mentors inspire competence, commitment and loyalty because they become personally invested in an associate's success. Mentoring relationships frequently arise informally in the course of work. Many firms also have well-designed formal mentoring programs that foster real-time learning and provide personal attention from senior associate- and/or partner-mentors. Lawyers who take these programs seriously can have fulfilling learning relationships. This requires personal commitments from partners, backed up by institutional expectations, training and rewards.

  • Opportunities for advancement. In order to be fully engaged, associates need to feel they have a future with the firm and visualize what that future will look like for them. What they see of partnership today is not very appealing, and few associates are offered partnership in any case. The question of partnership is even more troubling for women and minority lawyers, who find few role models in leadership positions.

Firms can promote engagement in spite of these obstacles by presenting an exciting vision for the future; offering meaningful long-term alternatives to partnership; elucidating criteria for becoming partner; providing support and resources to associates who desire partnership; and advancing women and minority lawyers into partnership and leadership positions. They should also ensure that associates interact with partners who love being lawyers and can explain to associates why a career in private practice - and at this firm in particular - is fulfilling and worthwhile.

  • Personal pride in the firm: Associates want to work in a firm that is well-regarded. To be engaged, they need to feel proud about the firm's reputation in the legal community, its support for the communities in which the firm practices, its social responsibility and its commitment to pro bono work. 
  • A culture of fairness and inclusion. To engage associates, firms must have policies and practices that support a culture of fairness and inclusion. This requires more than an inspirational mission statement or diversity initiative. The firm's policies and practices must be consistent with each other and with the firm's stated values. What matters is whether the firm treats people with respect and dignity every day and demonstrates by its actions that it is committed to being a workplace where people of all kinds are welcome and encouraged to succeed.
  • Effective firm leadership. When associates believe that the firm's leaders are devoted to the success of the firm, doing an effective job in leading the firm, and sincerely interested in associates' well-being, the impact on engagement is powerful. 8 Good leaders encourage engagement by clearly communicating to associates where the firm is headed and how well it is doing, as well as the opportunities and challenges that it faces. This enables associates to decide whether to tie their future to the firm.
  • Competitive compensation and rewards. Lawyers have choices about where they can work, and most choose work environments where the investment of their personal time, talent and effort returns a meaningful reward. Lawyers who do not feel fairly rewarded are less likely to be committed to the firm.

Lawyers expect compensation that is fair, reasonable and competitive in their particular market. Some associates are primarily interested in earning the most they can. For others, money alone is insufficient. They want to feel valued, recognized, and included. Increasing compensation without these important rewards will not keep these lawyers fully engaged and productive. Moreover, when law firms determine economic rewards in terms of hours billed, the impact - even on associates primarily driven by money - may be dehumanizing and counter-productive. (See Management Solutions Issue 19)

  • Enhanced quality of life. Younger lawyers are determined not to let their careers dominate their lives. They work hard but seek ways to "work smarter, not longer" through creative uses of technology, improved work design and better management systems. Law firms are permitting more flexible work arrangements, focusing primarily on reduced hours. But they still treat these policies as accommodations to a few (primarily women) lawyers rather than considering them as part of an overall shift in the nature of lawyers' work and careers. Instead of disparaging young associates' work ethic, firms can engage them by encouraging and embracing innovative thinking, and by involving associates in the development of new approaches to the way work is allocated and conducted, the way lawyers are deployed, and the ways legal careers are defined.  

While all of these areas are important, increasing associate engagement requires an individualized approach. People are motivated by many complex factors that change over the course of their lives. We may generalize about younger lawyers, women, minorities, and other groups in order to create policies and programs, but efforts to increase engagement must take into account each associate's individual motivators, development needs, personal circumstances, and career goals. This is a major undertaking that requires substantial resources. One consulting firm, Deloitte, has initiated a highly innovative pilot project that attempts to do it.

Deloitte's "mass career customization" (MCC) model lets employees control their career trajectories by selecting options in each of four core career dimensions. 9 (See Box) Within each dimension, the employee chooses along a scale. Each choice comes with specified tradeoffs, and employees may change their choices over time. Managers work with each employee to customize careers while taking into account the firm's business needs.

This is a bold innovation in collaborative career management. Deloitte is confident that its MCC model "has the power to inspire greater employee productivity, reduce the costs of turnover and generate greater loyalty."

Dimension

Description

Scale Range

Pace

Rate of career progression

From accelerated to decelerated

Workload

Quantity of work output

From full to reduced

Location/schedule

Where and when the employee works

From unrestricted to restricted

Role

Position and responsibilities

From leadership to individual contributor

 


 

2 Driving performance and retention through employee engagement. Corporate Leadership Council, Washington DC: Corporate Executive Board (2004)

4 Hildebrandt International, Understanding Associates: New perspectives on associate satisfaction and morale (2007)

5 Gita Z. Wilder, Women in the Profession: Findings from the First Wave of the After the JD Study (The NALP Foundation and NALP, Washington DC) 2007.

6 Frances Gibb, "Lawyer loyalty hits rock bottom," 10/22/07
http://business.timesonline.co.uk/tol/business/law/article2812724.ece

7 See, e.g., the NALP and Hildebrandt studies noted above.

8 Towers Perrin Study, fn. 3

9 Cathleen Benko and Anne Weisberg, "Implementing a Corporate Career Lattice: The Mass Career Customization Model," Strategy & Leadership, Vol. 35, No. 5, 2007, pp. 29-36.

 

 Law Practice Management in Australia

I was fortunate to be invited to speak at the Australian Legal Practice Management Association Conference in Melbourne last month. (www.alpma.com.au) The conference explored many of the same management issues facing law firms in the United States: how to retain talented lawyers, especially women; the resistance to – and growing importance of - professional management for law firms; and different generational attitudes toward life and work. Here are a few highlights:

Retention: Australian firms are struggling to retain their associates. The attrition rate in large firms is high: about 70% of associates leave within five years. They leave for many of the same reasons that American associates leave, but Australian firms must contend with an additional factor: experienced associates are being lured to American and UK law firms where the deals are bigger and the money is better. American and UK firms are actively recruiting associates from law firms and starting recruitment campaigns on law school campuses.

Retention of women lawyers is a particularly serious concern for law firms. Women are 70% of law school graduates and constitute more than half the lawyers in private practice, but they are leaving law firms for more conducive work environments and better career opportunities in corporate and government positions. 10

Professional management of law firms: Australian law firms are grappling with the challenges of law firm management in an increasingly complex, competitive, and changing marketplace. Lawyers' resistance to professional management and the lack of time and training for lawyers to manage a practice is a common dilemma. Australia has instituted a few measures to address this problem, both to prepare lawyers better for practice management and to generate respect for and acceptance of professional management. For example, aspiring lawyers must demonstrate evidence of competence in work management and business skills before they can be admitted to practice; experienced lawyers must take three days of training in law practice management as a prerequisite for becoming law firm partners or opening their own practices; and current and aspiring law firm managers may obtain a Diploma of Practice Management customized for Law Firms. (http://www.alpma.com.au/objectlibrary/288&filename=practice_made_perfect_brochure.pdf)   

One especially noteworthy development is that Australian law permits outside non-lawyer investors to acquire ownership interests in law firms. Earlier this year, Slater and Gordon became the world's first publicly traded law firm. When firms are accountable to public investors, firm management must focus on ensuring long-term value and profitability. Partners lose much of their control over the operation and management of the firm, including decisions about compensation.

Outside investment in law firms will soon be permitted in England and a conference on the implications of public ownership of global law firms is scheduled at Georgetown University Law School next April. (http://www.law.georgetown.edu/legalprofession/sympGlobalFirm.html) While not yet on the horizon in the US, once law firms elsewhere become publicly held, the impact on US firms will be significant. Among other things, the focus on creating and capturing shareholder value will undoubtedly lead to greater emphasis on more business-like and professional management of other Australian and British firms – and their American competitors.

Generational differences about work: Australian firms are dealing with exactly the same issues as US firms in trying to cope with generational diversity. Senior lawyers in Australia complain that the younger ones do not want to work as hard as they should, and young lawyers complain that they receive insufficient training and mentoring from partners and see few partners who are positive role models. The pressure to bill hours is strong, and while the expected number of hours is significantly less than in the US, I did hear of one firm that has a celebration to welcome into the "3000 Club" each associate who reaches 3000 billable hours a year. While many Australian firms are embracing flexible work schedules and other strategies to appeal to younger lawyers, they appear to be no more innovative than American firms - and no more successful.


10 Women In-House, Lawyers Weekly Online, May 1, 2006 http://www.lawyersweekly.com.au/articles/Women-in-house_z67987.htm  

 

 Save the Dates: The 2008 Hastings Leadership Academy for Women

In the Winter 2007 edition of Management Solutions, I described the Hastings Leadership Academy for Women, a leadership development course for women law firm partners. The 2007 Leadership Academy was a huge success, and participants found it to be extremely valuable. We will be conducting the Leadership Academy again this year on May 29-31 and July 17-19, 2008, at University of California Hastings College of the Law in San Francisco. Registration will be limited to keep class size small. Preliminary information about the course is available at  http://www.pardc.org/LAW. Further details will be posted in January.

 

 Publications

The lead articles in Issue 19 of Management Solutions, "True or False: You Are What You Bill" and "New Approaches to Time and Performance" were reprinted in the August 2007 edition of Law Practice Today. http://www.abanet.org/lpm/lpt/articles/mba08071.shtml

 

 Speaking Engagements

November 29-30
NALP and ALI-ABA Professional Development Institute, Washington, DC

December 4-5
American Conference Institute Recruiting, Retaining and Developing Female Attorneys, San Francisco

January 15, 2008
LexisNexis Women in the Legal Profession Summit: Rainmaking, Negotiating and Collaborative Development, San Francisco

 


©2007 Ida Abbott Consulting
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