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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With thanks to Patrick Hoesly (c)

In small law firms it is not uncommon to hear partners or leaders say things like ‘damn, we need a dedicated marketing person so we can get some marketing done and can get on with our work’ . In large firms they may say ‘why doesn’t marketing sort that out and free us up to do some legal work’. It seems that for law firm leaders and partners things might be about to get tougher before they get better!

In the July 2011 McKinsey Quarterly piece titled ‘We’re all marketers now authors French, LaBerge and Magill reason persuasively that engaging clients today requires commitment from an entire firm (not just the marketing folk) — and a different sort of approach and structure for marketing. Every partner and ideally every staff member has a role to play. This would obviously have implications for people management as well.

In essence the authors say:

  • Firms feel that by simply adding extra marketing bodies to address things like websites, social media and strategic communications this will do the trick – not so . . . . . .
  • Clients no longer separate marketing from the practice group or industry sector specialty services we offer – marketing and the way we deliver service is the service.
  • As a result everyone in every firm now needs to take responsibility for marketing – in some respects this parallels what has happened with HR (where everyone has a responsibility to ensure a firm’s employment practices and employment brand are supported, not just ‘HR’).
  • The buying practices of clients are now collaborative – more than ever based on word of mouth, website affirmation and objective advice about law firms that want to form relationships with them – it’s now a dialogue not a monologue.

What does this mean for law firm leaders? I think there is a message here – for both small and large law firms.

  • While the article is focused on clients I think there are also implications for law firms in their interaction with potential recruits and lateral hires.
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Employees own shares in this dynamic 105 year old Australian law firm M+K Lawyers, headed up by National Managing Director Damian Paul. M+K has embarked on a remarkable growth strategy around a unique business model and culture. Damian agreed to answer some questions:

Sean: Your business model is unique and was the first of its kind in Australasia – how has the firm grown since this model was introduced?

Damian: Somewhat late in our over 100 year history, the new model took effect in July 2008! Since then, over the past 3 years, the firm has grown in revenue by 150% to A$50m, in staff by over 100% to just over 300 and from one office to locations in all key east coast centres; New South Wales, Queensland, Victoria and Tasmania.

Sean: How would you describe M+K Lawyers?

Damian: A national commercial law firm, operated in a corporate, businesslike structure.

Sean: How does it work?

Damian: An incorporated legal practice (ILP) in each of the 4 states in which we currently operate (News South Wales, Queensland, Tasmania and Victoria), each 100% owned by a parent company which, in turn, is owned by M+K directors and employees.

Sean: Why did you choose this model?

Damian: We saw it as the model most suited to helping us acheive our growth ambition to become the leading law firm in Australia for middle market clients.

Sean: What take up has there been – from other firms and from staff ?

Damian: In a relatively short time since July 2008, seven law firms have joined us (including the foundation firm, Macpherson+Kelley). Senior employees have the opportunity to invest in the firm by buying shares in our parent company, thereby acquiring a stake in the national firm.
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