Law Firm Leadership Series 2022

Working practises and culture

Law firms, Working practices and culture

The pandemic and social distancing forced law firms to fully embrace remote and agile working. Long hours in the office and face-to-face meetings with colleagues and clients were suddenly no longer possible. The change in working practices enabled firms to keep operating and bringing in revenue, and even delivered a financial dividend by bringing down overheads.

Remote working has benefited some firms in terms of widening the geographical area firms can recruit talent from, but is has also backfired for other firms. No longer needing to live in a certain location to work for the top firms precipitates a talent drain from smaller, regional firms whose employees can now ‘level up’ without moving. Remote working has also shifted attitudes towards work. People are less willing to accept long or anti-social hours. They have realised that it is possible to deliver work effectively without commuting into city centre offices every day. There has also been a growing appreciation of the importance and prioritisation of physical and mental wellbeing.

The enforced change in working practices and attitudes happened against the backdrop of changing attitudes to work among new, younger entrants into the labour market. Gen Y (more commonly known as Millennials) and Gen Z (the youngest crop of associates currently entering the workplace) all have different attitudes to hierarchy, work/life balance, reward, ethics and to career development from previous generations. These factors have been brought to a head by the shortage of available talent which has put associates and junior staff in an unprecedented position of power versus law firm employers. They are, for the time being, in a position to demand, and get, what they want from their employers.

However, have those same changes in working practices weakened the internal cultures of law firms and affected the hierarchy and power balance within firms? Is the traditional operating model of associates and partners changing permanently? Regardless of your opinion of the operating model, the firms that are able to manage or mitigate the changes effectively are more likely to be successful.

“I just had to schedule a meeting with a first-year associate who wanted to meet me in my office. She set the time when she would be available. Does that explain how tough it is in terms of recruitment and retention!”

Law firms, predominantly, are trying to recruit using the old rules of engagement, where employers held all the cards and associates “should be grateful”. This dynamic is forcibly being changed. Whether they are applying for roles or reviewing their current situation, these associates understand that they are in a position to make demands not just around salary but also on issues of wellbeing, work/life balance and increasingly upon the ethics and morals of the firm. A firm’s attitude towards Environmental, Social and Governance (ESG) issues are becoming more important as are the types of clients they work with.

There is research that shows that these younger employees want remote or hybrid working, attach a high value to work/life balance and to both formal and informal learning and development opportunities. They are happy to challenge established processes and hierarchies. They are also more likely to expect to change jobs and even industry than ever before. This creates problems for firms who only use monetary motivation to retain staff. Time can be bought, but not loyalty. If they feel no bond with an employer, applicants have no issue going to the next bidder.

In our conversations with law firm leaders, we found anecdotal evidence that these new types of demands from a younger generation are making law firms think again about the value exchange between employers and staff. They are having to take account of the demands of associates in a way that they have not ever done in the past. Law firms are having to address the high demand/high stress culture of the industry. They are frequently providing wellbeing related services to staff and supporting different ways of working in pursuit of a new, people centric ways of working.

“We talk a good game about work/life balance and being mental health aware – but when the client demands something, very few partners are confident enough to push back and explain why. But the change needs to come”.

The prize for those who succeed is potentially huge. They will benefit from greater staff loyalty, stronger team working and a reduction in expensive staff churn. They will also reduce the incidence, and costs, of burn out across all levels of staff.

What law firms have to work out is to what extent the changes around service delivery models and workplace culture are going to become permanent.

It is clear from some of our interviews that the pandemic and the subsequent shortage of talent have been the root causes of this change. However, it is also clear that many law firm leaders do not believe that the subsequent increase in salaries is sustainable in the long term. Some expect it to reverse as part of a natural cycle, while others expect a recession which will reset the balance of power, putting law firms back in control. Is betting on a recession to strengthen your hand against your own associates so that you can “correct” the power balance back in your favour, a reputational and ethical risk many will be willing to take? Or is there a collaborative, less adversarial stance, leaders can take to build loyalty and a mutually beneficial future?

If the current shortage of talent is the main driver of changes and challenges to the traditional service delivery model and workplace culture, it is reasonable to expect this to be a temporary situation. Firms should be able to rein back any changes that are expensive or that run counter to their particular culture. It is unlikely therefore, that hierarchies and paths to progression will  fundamentally change any time soon; but how long firms are willing or able to resist long term change remains to be seen.

On the other hand, if the pandemic and changing attitudes to working have undermined old cultures and service delivery models to the extent that they have become obsolete, law firms will have to rethink how they attract and retain younger employees. They will have to reconsider the many non-financial aspects of their employer proposition from working hours, remote and hybrid working models, wellbeing initiatives and how they frame and provide ongoing training and professional development. They can no longer assume that every associate will make personal sacrifices in order to make partner. Some associates no longer see becoming a partner as desirable as it was once considered to be because they see partners still making those sacrifices and suffering substantial work stress, and think "is the reward for putting up with the stress and pressure, more stress and pressure?".

Law firms will have to understand and meet the expectations of younger staff and associates. This will not necessarily be easy. The younger people are more digitally-minded than previous generations and more likely to want remote or hybrid working but they also value face-to-face meetings with managers and colleagues. They value training and professional development, but question established methods and processes. They resent being expected to attend the office unless there is good reason to be there.

Many of the decisions law firms have to make on how they attract and retain associates will reflect and reinforce the trends that we have uncovered in service delivery and operating models. You can find out more about those trends here.

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