Law firms don’t recognise that the balance of power in relation to their employment brand lies not in their hands, but in the hands of their employees. To make matters worse, some of this power also lies in the hands of former employees, potential employees and other “employment stakeholders” such as recruitment agencies and digital media channels dedicated to commenting on the foibles of law firms.

Law firms don’t appreciate that the balance of power in relation to their employment brand lies with their employees, and even their former and potential employees, as well as with other parties like recruitment agencies . These other parties determine the brand. Firms assume it is what they offer that matters, but that is but one small component in the mix. (© Sean Larkan 2012)

This is because a firm’s employment brand is based on how the firm is perceived and experienced as an employer by existing employees, past employees and potential employees, as well as by other parties such as recruitment agencies and the media. Its employment brand is not what the firm thinks it is, but what these ‘others’ think it is.

This is a harsh lesson for most firms to stomach. It can be mystifying. Firms assume their employment brand is based on what they say in their recruitment materials, on their website, what they do, what they decide to offer employees as part of their employment package, and so on.

Instead, the power lies in the hands of others, the firm’s employees, past employees, potential employees, and others in the recruitment and media industries. What employers offer to their employees is merely part of what we call their employment brand offering. Firms still have a great deal of work to do to build their employment brand. For a start:

  • you must clarify your employment brand offering – identify, clarify and agree all the things you do offer to existing and potential employees and what makes working for the firm special and sets it apart. Bear in mind that standard features and benefits don’t make much of a difference; they don’t differentiate a firm as all firms offer them anyway – if they don’t now they can easily and quickly replicate them;
  • you must achieve Brand Fusion™ which is essentially ensuring that what you offer is actually experienced or has been experienced in the case of past employees. This is no mean feat given that you are largely dependent on the exigencies of individualistic, independent-minded partners to act as your front-line troops in making this happen;
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Like finding the toilet roll  empty, or getting a puncture, some things never come at a good time. But, of course, these things do happen so most of us have learned to respond with equanimity and of course maybe even do a little forward planning!

The same applies to losing a really top calibre lawyer or support staff member (especially to the dreaded opposition); just when you thought he or she was well settled and was going to be part of your landscape forever (‘even though I hadn’t told her, I thought she had ‘future partner’ written all over her’). It is always unwelcome, sometimes seems a bit unfair (‘we always treated her so well and she seemed so happy’) and the timing is always bad (‘I have just introduced him to the the new oil and gas matter and client loved him‘).

When something unwelcome happens, like losing high calibre staff, the challenge is always to retain some equanimity and try to understand it for what it truly is, and not for what it is not. This doesn’t mean not acting, or simply doing a few operational things as a knee-jerk reaction on the surface of things. It requires in-depth strategic analysis, careful review and thoughtful implementation with a view to re-building trust in your employment brand. (Sean Larkan 2012)

Especially for firms that put a lot of time and effort into their people, events like this can cut to the bone.  It can be very demoralising and quickly impact confidence. Sometimes it seems incomprehensible as you feel you are doing things right.

Real concerns should arise when it starts happening with some regularity and becomes a pattern. It is not just an isolated incident based on exceptional circumstances. Word about things like this – key staff losses – can spread like wild-fire, and this can have a severe impact on a firm’s employment brand and on engagement levels. Social media, Linked In facilities for recruiters, plus recruitment agency networks ensure the market knows about these patterns long before most firms even realise its happening. This is when leaders and managers need to take remedial action and get to the bottom of it.

As much as these events require a decisive response from leadership, the danger is that it can often cause knee-jerk reactions and the implementation of solutions which may seem okay on the surface, and may even appease (including one’s conscience), but in reality don’t do much to change anything substantive for the long term.

In the work I have done with firms around people strategy and we consider these strategic issues, two things come up as common threads:

  • when times are good – staff recruitment is going well, staff calibre is good and turnover is down – firms assume it is because they are doing a heckuva lot of things right (and have earned this status because of all the good things they are doing around people). Interestingly, dig deeper and you may find this is not in fact the case.  They may have hit a lucky streak (it happens) or be regarded as the ‘flavour of the quarter‘ in the recruitment channels (it happens). Further investigation can reveal that  many of the people fundamentals have not in fact been properly addressed;
  • when times turn bad (sometimes, unaccountably, not long after they were good), firms are invariably surprised and anxiously cast around for causes. They tend to hone in on what appear to be the obvious reasons (e.g. a few partners with poor records of managing staff, benefits needing tweaking etc), try to address these and too quickly conclude ‘job done‘. Unfortunately, superficial, knee-jerk responses usually achieve very little, even though they may keep a board and some partners happy for awhile. Chances are that down the line the same problems will still exist, the reason being that they are founded in culture and well established cultural norms which and run deep to the heart and soul of what the firm is or isn’t about. They therefore need much more thorough, thoughtful treatment.

When this sort of pattern arises around losing key staff it is a sure signal that firms need to take very careful and serious stock of what they are or are not doing in relation to their people. It’s a big job, it is complex and touches on so much of what a firm is or is not; it  should quickly becomes priority numero uno.

I would start by asking some or all of the following questions:

  • are our partners and managers more focused on meeting their own targets and performance criteria than they are on delegating good quality work and providing good access to clients, good feedback and other support staff crave and need to grow;
  • what is the state of our employment brand? Do we have a brand strategy? Do we understand brand and what constitutes our employment brand? Do we achieve Brand Fusion™ i.e. ensuring what we promise and say we do in regard to people, we actually do and deliver?
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I know that a managing partner is appointed to lead and run a law firm and should do just that – get on with the job. However, there are many things that a firm must in turn do, ideally up-front, to assist their newly appointed managing partner and to give him or her a fair shot at making a go of a very challenging and sometimes trying role. Leaders, particularly new ones, are real people and need real help and support. Wise firms put this in place.

A new managing partner and no doubt his or her partners will be raring for him or her to take up the role and ‘make a difference’. It is worth spending some time however  thinking about how to make it easier for him or her and to provide proper support – upfront.

The problem is that due to the strange animal that is the law firm partnership or equivalent, most firms don’t really get involved to implement just a few basic steps that can serve to make or break a managing partner, or at least increase the chances of success and his or her maintaining some semblance of normal life. The right steps taken up-front, and a few carefully thought-through foundation-stones laid, can make his or her life so much easier and get a much better outcome for all concerned.

Partnerships have this strange view that because they have chosen someone from their ranks who they believe has the credentials to lead (and usually does) that this is the end of the matter – the new incumbent can and will sort out any teething snags or issues arising in relation to the role and will simply work out work and time pressures and so on. The problem is that most new incumbents believe this as well. They don’t want to undermine the partners’ confidence in them or give any indication that they are struggling and need help.

It is not a good combination and can quite unnecessarily lead to a bad outcome, and be tough on the managing partner. It is fair to say that the root causes of many managing partner roles not panning out can be traced back to what is or is not done in these early stages.

What are some of the challenges faced when a new managing partner is appointed?

  1. a fear by the managing partner he or she will, over time, lose a highly successful practice;
  2. a fear (by the incumbent and the firm) that the managing partner may never re-build a practice after the role and may be left high and dry. This can cause all manner of defensive behaviours which can work counter to making a success of a leadership role;
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The story goes that you never quite get the veld dust off your shoes when you have grown up in Africa – good stories about Africa always get my heart pumping! And so it happened when I read an inspiring article by lawyer Greg Nott on some wonderful achievements, on and off the field, by

In the fast and easy world of email communication (where over 80% of us consider email to be critical to our success and productivity and how most of us communicate) it is sometimes tempting to respond to an annoying partner or manager communication with a quick-fire email. Most of us have fallen into this trap.

Like horse’s hooves, partnerships have to deal with different conditions throughout a year. There is a well-known equestrian saying: ‘no foot, no horse‘ which means keep the hooves in order or you don’t have a fit, usable mount.

No foot, no horse – like horses’ hooves, partnerships need maintenance and the fundamental building blocks for success need to be carefully thought through and put in place. One of these is clear performance and contribution criteria.

Similarly, successful law firm partnerships need to get the basics in order and thereafter ensure that they are functioning well. It still surprises me how many firms adopt a fairly laissez faire approach to these things and don’t address some of the basics around key partnership functions. In some cases I suspect it is simply that leadership do not wish to ruffle partner feathers and so allow some of them to slip into the ‘too hard for now’ basket. In other cases the firm is doing well so some of these essentials fall off the radar.

One of these is setting partnership performance criteria. When asked to advise firms on performance and growth one of the first things I ask to see is the criteria or key performance indicators (‘KPIs’) that the partnership uses to guide, encourage and measure partner behaviour, thinking, contributions and performance.

Frequently there isn’t one or it is a hotch-potch of half finished lists which have never been fully debated, agreed and not implemented or communicated in any meaningful way. In other cases, there is a list, but that is all there is. Partners do not react to lists of things to do – it takes a lot more. Sometimes new partners come into a partnership blissfully unaware of their existence. As a result performance and contributions can be variable and overall, not delivering what the firm is after.

What then are some considerations to bear in mind when putting together performance criteria or KPIs?

  • ideally these criteria should not be determined in isolation, but in the context of the firm’s core purpose (vision, values, cultural attributes), strategy and guiding principles. This stands to reason as the criteria should be one of the key ways in which the vision and strategy is achieved;
  • you need to get all partners involved in the debate. Communicate and explain. Ask them for input. Encourage their involvement and thinking. Make a genuine effort to do this. Get to the bottom of what truly makes the partnership tick. Done well, you will find a number of the criteria and other strategic key objectives for the partnership drop out of this process. It will also be owned by the partners which will make implementation that much more effective;
  • you are going to come across some opposition, some of it very subtle, but if you don’t anticipate it and are not prepared it can undo all your good efforts;
  • you usually only get one good shot at this – make it count by getting it right first time – if necessary get experienced external counsel, especially to deal with any ‘curved ball’ queries you may encounter in meetings;
  • be patient. Introducing such processes means a lot of change for a lot of partners and thus can cause fear and demotivation;
  • don’t however be patient at the price of inaction or unnecessary vacillation and delay. It is important to commence the process and maintain momentum. Partners need to know leadership is determined to see this through to a successful conclusion for the long term benefit of the partnership. This is everything;
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As a law firm leader one of your best returns on investment can come from appointing the right support services manager. A good manager can easily make a partner-like contribution or more to a firm. They do need to be the right calibre, the right fit and possess good levels of emotional intelligence and initiative. They also need support from firm leadership – mentoring, an interest taken in them personally and professionally, responsibility, authority and accountability.

Most of us probably assume the managers we recruit are honest – however, a new report shows an alarmingly high percentage might embellish their attributes to get themselves recruited. The worry is, picking this, and will it stop there? (iPad graphic by Sharon Larkan 2012 ©)

One thing I always assumed was that people filling such roles would be honest, especially as they had often been through other law firms. I never doubted it. Maybe this view was a bit naive! The findings of a recent research report point to a startlingly high percentage of Australian managers who are apt to embellish their resumes and talk up past work experience.

SHL, a global talent assessment solutions consultancy, reported in a recent Australian Law Management Journal article, found that nearly 40% (24% in New Zealand) will lie on their resumes and are 3 times more likely to lie about their qualifications than other workers. The areas that are most often faked are work experience, referees, earnings and qualifications.  The key findings relevant to law firm leaders are:

  • 39 per cent of managers have lied on their resume
  • 18 per cent of managers made up or exaggerated their work experience
  • 13 per cent of managers changed information about how much they earned at their last job
  • 10 per cent of managers made up references
  • 18 per cent of managers lied about their age.

Obviously this is a wake-up call to everyone who employs senior managers. If they are prepared to be dishonest about something as obvious as their personal achievements and attributes, with a real risk this could be found out, what else are they going to fabricate during the course of their employment? Also, this is tricky from a practical perspective – how do you test for honesty?

What are some things we can do to protect ourselves?
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In a recent post I highlighted the importance of leader accessibility, responsiveness and reliability, effectively saying nothing beats these for importance. A reader suggested I follow up with a note on how a leader can achieve accessibility – here goes with my thoughts.

Accessibility is not simply a question of saying you adopt an open door policy – it is about your partners and staff feeling and believing you are accessible. It is what they think and not what you believe you are or are not doing that matters. If you are not sure, you should seek feedback. Chances are they will have a different perception on this to you. For a start don't just open the door, walk out the door to connect with others.

I remember when I was in a managing partner role I thought I did a pretty decent job of being accessible and getting around to see people – I am willing to bet though that plenty of the staff and partners didn’t think so. The reason is I have since realised its not what I thought about this that mattered, but what they experienced and felt. Too often we look at these things from our perspective and although we may feel we ‘get it’, we often don’t. It is all about the perception of others. Everyone amongst those others is different. Everyone thinks differently. So, I don’t think I gave it quite enough thought at the time and should have. I suspect many leaders don’t. They should. It is that important.

You will quite often hear law firm leaders say things like ‘I have an open door policy’ and so on. This is a good start, if it is true and if that results in people actually feeling they can come through that door, or approach the leader in the passage or canteen and discuss what it is they want to discuss or better still, offer up some innovative or strategic ideas for the firm. Too often that door can stay open all day but people will simply not cross the threshold as they don’t feel comfortable.

Rather than simply having an open door policy the key is to create an atmosphere where people feel comfortable communicating and sharing their thoughts.  It seems to me to be more about stepping outside the door and being accessible outside rather than sitting in your office with the door open and assuming others will regard you as accessible based on that assumption and gesture.
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Despite the attractive laid-back hippy, flower power and surfing cultures which were around when I was young, our fairly conservative coastal-rural upbringing meant we thought more or less everything there was to learn would come through our parents. As one ‘matured’ one was tempted to think the youth of today had it easier and was not as committed or hard working as we were and so on. Then there was all the grumbling about ‘Gen X’, ‘Y’ and more recently, ‘Z’ and how each group supposedly expected different kinds of special treatment. Fortunately this talk seems to have died down.

Nearing the final day of a gruelling 1300km charity cycle ride for the two young men, James Larkan and Steve Richards – in two rides in two years they raised A$80 000 for Youth Focus, a charity dedicated to helping young people struggling with depression and potential suicide in Western Australia

I found this thinking changing for me as my own three children grew into young adulthood and as I took on managing partner roles in law firms and witnessed the talented, hard-working, articulate, confident young kids coming through our interview processes. More and more I found myself thinking the opposite was true – we had as much if not more to learn and admire from ‘them’ as they ever did from ‘us’. In fact, since then, I have never stopped learning from observing them.

30km headwinds on the penultimate day, after 7 days in the saddle, proved tough-going!

A recent example, very close to home, brought this firmly back to me. My son James, busy with final year university in Perth, West Australia and a full-day part-time job running a warehouse, joined his best mate Steve Richards in tackling a 1300 km cycle ride from Exmouth to Perth over 8 days to raise funds for the Youth Focus charity which counsels and support kids struggling with depression and potential suicide. This backed up on their 600km mountain bike ride along the famous Munda Biddi mountain bike trail the year before from the south western corner of West Australia to Perth, also over about 8 days. They raised $80000 doing these two rides. Tragically Steve lost his brother Mark to suicide 3 years ago and the rides were dedicated to Mark.  A nice touch was that James’ two sisters, Kerry and Jess, also quietly weighed in and supported the boys, organising a very successful raffle and contributing and arranging some fantastic prizes for it.

Steve’s Mum, Anne, former Australian squash representative, who with her amazing Mum, Pat, and partner Dave, remarkable people all, spent every minute of every day with the boys, said it best when the boys arrived in Perth:

I’m not going to say too much today, most of you have read the couple of updates I sent so I think you can visualise a little of the picture of this amazing journey. There have been so many stories within stories during this trip, just too many to talk about today and nearly all these stories are touching or emotional in some way.
The boys passed through some amazing countryside – the Pinnacles desert-scapes near Cervantes

It is a huge relief for me to have Steve and James here safely today!

I think I need to keep it simple. This all began because Mark died. He was living in incredible pain and took his own life, exactly three years ago today at about 7.30 tonight. It is a day to celebrate but to me, to Steve, our family and everyone who knew Mark it is terribly sad, we lost someone special.
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It is always fascinating to hear partners talk about firm finances – usually it involves a focus on fee income, very selected expenses and 100% equity partner profit. The expense focus usually hones in on areas where they feel management is wasting money, maybe on marketing, the library, IT or support staff.

Not managing the utilisation of your fee earners, or having individual partners do this, is akin to burning a pile of dollars when you open the office each morning.(Sean Larkan graphic © 2012)

Mysteriously, there is seldom mention of the firm’s biggest opportunity cost, and one which individual partners directly control – the cost incurred by not fully utilising one of the largest recurring expenses in any law firm – the direct and indirect cost of fee earners. Remember when considering this expense item that you are not just looking at direct staff costs but also overhead costs associated with that expense.

A quick rough and ready calculation brings home the seriousness of the issue! For instance one partner with 3 lawyers (say earning $100k p.a.each and whose overhead allocation is say $110k p.a. each) utilised on average to a level of 75%, will be burning nearly $160k p.a. It is even more if one also takes into a account the opportunity cost of the fees they would otherwise have earned.

It is the one expense item which all partners should be responsible for managing, almost to the exclusion of all else on the financial side. Many decades ago David Maister highlighted the importance of this variable in his well-known profit formula (Profit per Equity Partner=margin x rate x utilisation x leverage) including utilisation as a key variable.

Again and again I come across firms who are bemoaning one or more rising expenses (including payments to external consultants!) or firms which have undertaken wide-spread analyses of expenses, sometimes with the help of their financial advisers, but seldom given proper attention to this crucial item. If there is, it is merely listed and no real steps are put in place to manage it and get results around it.
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