Are law firms fighting a war for talent, or a war for trust?

[Australasian Law Management Journal,General Management,Marketing & Business Development,People Management(HR),Strategy & Leadership,Uncategorized] June 25, 2019

As law firms seek to recruit the best millennial talent to thrive in the future, they should ensure that they build trusted relationships with their employees, clients and the community, writes Trish Carroll.

According to the CommBank 2018 Legal Market Pulse Report, released in December last year, the war for talent continues.

Going by the findings, the most common challenge among Australian firms is finding high-quality staff as they “vie for top talent to service heightened demand”. The report’s net reading of -63 per cent in 2018 versus -25 per cent in 2017 suggests that the hunt for good people is getting harder.

It is mainly a war for millennial talent – that is, people aged 22 to 36 – who, if they have lived in Australia all their life, have never experienced a recession in their adult life. Millennials will watch and evaluate their employers closely to see what strategies and behaviours emerge in a recessionary economy.

Many have heard of, and some have experienced, the type of cultures on display in some of Australia’s most respected firms. These were highlighted by Safe Work authorities’ investigations into cultures of bullying and overwork that cause fatigue, exhaustion, emotional distress and other mental health issues. Blogs are alive with lawyers exchanging alarming stories on this subject.

As Gilbert + Tobin managing partner Danny Gilbert, said after the November 2018 SafeWork NSW complaint about his firm had been resolved: “The incident inspired a level of introspection” and “he and other Gilbert + Tobin executives are taking the situation seriously”.  As they should.

King Wood Mallesons also had a wake-up call last August when the Victorian regulator, WorkSafe, conducted an investigation into employee fatigue and, as reported in The Australian Financial Review on 7 June, 2019, the firm has since instigated a number of initiatives to address the regulator’s concerns.

Fallout from failings

Introspection and action occurred at Russell McVeagh, once a venerated New Zealand law firm with an impressive list of public and private sector clients, before sexual assault allegations made by summer clerks in the summer of 2015-16 became public knowledge. These were ultimately fully investigated by Dame Margaret Bazley, whose report into the claims, released in July 2018, found failings in governance, structure, management, policies, standards and systems.

The report should be mandatory reading for law firm leaders and is available on Russell McVeagh’s website here. Among the findings, Bazley found that, despite most staff saying the firm was “a great place to work”, it had “a ‘work hard, play hard’ culture that involved excessive drinking and in some instances crude, drunken, and sexually inappropriate behaviour”. She pointed also to a failure of governance and the absence of a code of conduct, along with a culture in which there was “fear among lawyers and partners about the potential consequences of speaking out”.

Russell McVeagh has worked hard to address its failings, but there is no denying its brand took a battering. The market was shocked and, as for recruiting law graduates, the ire was so intense that the firm’s partners were banned from going on New Zealand law school campuses for the usual recruitment activities.

Put trust on the agenda

There is no shortage of law graduates and that makes the war for talent difficult to fully comprehend when Australian law schools have been producing graduates at a rate of 15,000 per annum for a few years now; far more lawyers than demand requires.

Could it be that the profession’s culture, as experienced by many millennials, along with the prevalence of mental health issues in the legal profession, make working outside law preferable? There is also often a gap between the cultures and values espoused in the recruiting process and the actual employment experience. Trust is tested. Remember that trust plays a strong role in determining where people choose to work and where they choose to stay working.

When you look at the swathe of recent royal commissions, whether they are about the financial services sector, the aged care sector, institutional abuse or the building and construction industry, the catalyst has been the failure of institutions to do the right thing by everyone – not just their shareholders or partners in the case of law firms, but everyone; their clients, their employees, their suppliers, their community. Everyone.

Nothing matters more than the quality of your relationships with your clients, employees, suppliers and the community. Strong, trusted relationships are the bedrock of sustainable businesses and that is a big element of what helps them flourish in boom or gloom times.

Trish Carroll is the principal of Galt Advisory, a firm focused on helping law firms devise and implement successful marketing and business development strategies. She can be contacted at trish@galtadvisory.com.au.