The times are a changin', especially for HR

With profound changes occurring in the legal services landscape, a corresponding shift in the role of human resources teams will be required if law firms are to stay competitive, writes Joel Barolsky.

Your firm’s HR team is at the epicentre of change. There are six major shifts in the practice and business of law that will have profound implications for HR. It’s time to reimagine the role of your HR professionals and what they can and should contribute to your firm’s ongoing success.

1. Shift to the rocket model

The next five years will see a migration away from the pyramid towards the rocket-shaped organisation. A typical pyramid structure has a partner at the top supported by one or two senior associates and four or five juniors. In the rocket model, most juniors are substituted by a combination of technology and para-professionals.

For HR, this means:

• partners need a new set of skills and knowledge to manage their rockets and to win and deliver projects profitably;
• improvement in digital literacy across the board;
• the end of the apprenticeship model that involves training juniors on the job, and low-level process work;
• new recruitment markets, processes and criteria to include non-core areas;
• measurement and reward systems that reflect non-time-based pricing, innovation and collaboration; and
• managing a much more diverse culture of professionals, para-professionals, technologists and project managers.

2. Shift to workforce accordions

Most firms currently operate with a defined cohort of fulltime professional staff. With growing variations in client demand, there is a trend towards the accordion model. This model means having a blend of fulltime staff and a pool of pre-selected, trained variable-cost contractors. Corrs’ Orbit, Minters’ Flex, Pinsent Masons’ Vario and Allen & Overy’s Peerpoint are firm-based accordions. LOD (Lawyers on Demand), LexVoco, Crowd & Co and Bespoke are examples of specialist providers in this space.

Other variants of the accordion include flexible work arrangements, hot-desking, secondments, reverse secondments and sabbaticals. Maddocks recently reported that more than 20 per cent of its partners were working outside the ‘normal’ 8am to 6pm, five-days-a-week model.

HR complexity increases exponentially as a firm increases the variability and flexibility of its workforce.

3. Shift to smart collaboration

With the increased competition from in-house and boutique firms and individual freelancers, most multi-service firms are recognising that their main competitive advantage lies in the ‘collective’. If firms continue to be just a collegiate group of individual practitioners, then they will lose share to other competitors with lower costs and/or better-perceived quality.

While economic geographers have identified the positive relationship between physical co-location of knowledge workers and firm performance, HR plays a critical part of bringing capable people together. It is through true cross-practice collaboration that the firm can offer something that others cannot. Bringing a diverse set of expertise and experiences to solve clients’ toughest problems is more profitable, more fun and more valuable to the client. It is also a lot harder to do.

4. Shift to supportive intolerance

There is ample evidence that better leadership leads to better performance. Firms with a depth of leadership capacity across all its partners are in a much better position to handle market uncertainties than those with just one or two stars.

Developing leaders does not just happen through a wish and a prayer. It requires a particular style of operating, first coined by David Maister, called ‘supportive intolerance’. The support bit is offering partners personal insight and reflection, coaching and training to help them develop their full leadership potential.

The intolerance bit is making them accountable for their actions and inaction. This means calling out behaviours inconsistent with firm values, providing constructive, prompt and honest feedback, having full transparency around agreed actions and, if all else fails, reducing reward as a sanction.

HR should be the lead change agent in introducing this style of leadership and operations. Again, it is really hard without formal authority, but it is critical to the firm’s long-term sustainability.

5. Shift to loving the problem (not the solution)

While we try to do more with less and stay up with game-changing ideas, many HR professionals are still expected to solve day-to-day problems, so it is easy – and tempting – to go into problem-solving mode.  Boudreau and Rice’s caution for HR professionals states: “Embrace too many ideas (from popular talks and articles) or apply them too superficially and you’ll develop a reputation for fad surfing. Dig beneath the surface to the fundamental scientific research and insights and you can set the stage for true impact.” 

So one thing HR can do to add more value is ‘fall in love with the problem’ – that way you will look forward to spending more time on understanding the problems more deeply.

6. Shift to ambidexterity

One can think about firm strategy as two parallel streams: one being ‘exploit’ and the other ‘explore’ (based on the work of O’Reilly and Tushman). ‘Exploit’ refers to efforts to leverage current strengths and capabilities to make the current core business as good as it can be. ‘Explore’ refers to new exploratory and experimentation efforts that will hopefully bear fruit in the future.

Firms need to become more ambidextrous; that is, change the firm’s culture so that everyone embraces explore and exploit in his or her everyday work and client interactions.

In an environment of rapid change and hyper-competition, every firm needs a healthy portfolio of both exploit and explore initiatives. A genuine commitment to exploring will most likely mean substantial changes to the firm’s dividend policy and capital structure. Firm governance and structural arrangements are also likely to be impacted, as will marketing, pricing, IT, operations and, especially, HR.

Joel Barolsky is managing director of Barolsky Advisors, Senior Fellow of the University of Melbourne and creator of the Price High or Low smartphone app designed to help with pricing projects. Visit  www.barolskyadvisors.com for more details.