Innovating Talent Management in Law Firms

With the changes taking place in the legal industry right now, talent management has never been more important. The reference to “talent management” here is to the function within a law firm that links the changed landscape of work and the new, emerging legal workforce with the firms’ strategy and business models. In summary, it is about employing the right people, to do the right work, at the right time, at the right place and at the right price. Today, doing talent management well is a game changer and an integral part of successfully transitioning to the brave new legal services/products marketplace. So let me begin here with how I will also end. If talent management is not at the top or close to it on your priority list of things to watch carefully, constantly, and proactively, that needs to change—now.

Why is talent management so important?

Lawyers and law firms are no longer doing the same things they used to do. Increased access to legal knowledge, changing client demands, the impact of LegalTech, and the proliferation of alternative service providers has led to a dichotomy that Jordon Furlong has referred to as legal work (not requiring a lawyer or where the lawyer is peripheral) versus lawyer work (only a lawyer can do it). The impact of this on law firm business and staffing models has been seismic. It has also spawned new specialisms in law firms that focus exclusively on improving processes and systems, data analytics, and predictive risk management, as well as the development of new tech-enhanced services and products that move routine tasks away from lawyers and into the hands (and control) of their clients and other providers. Law firms today need to plan for, deploy, develop, and engage a workforce with the capabilities to deliver what they do today and will do tomorrow, not what they did yesterday.

All of these changes would have been more than enough for law firm leaders and managers to deal with, but, at the same time, the world of work and the global workforce has also been undergoing significant change. Fewer people are working full-time, in an office or for one employer. Global talent pools are increasingly defined by less permanent full-time workers and more part-time and casual workers—we are in the throes, it would seem, of the “gig economy.” People also want to engage equally in work and life. That may mean taking time out to care for their families (children or parents), undertaking a pro bono project for a year overseas, travelling, trying out a different career, or not taking that partnership role when it is on offer—well, not just now, anyway. Careers are increasingly more like a collection of experiences (a portfolio) and a lot less linear. The characteristics of this new workforce, often referred to as the Millennial workforce, is a lot more mobile, flexible, diverse, collaborative, and in control… and remember, we are discussing a global workforce here, so this describes your employees and your clients too.

Careers are increasingly more like a collection of experiences and a lot less linear. | Click to Tweet

What’s In, What’s Out, and What’s Gone

So how does this impact law firms? How do we make sense of all of this and make it work? Many frameworks would serve as a point of reference here.  The most familiar one is the competency-based development model, which has been widely adopted in law firms. In broad terms, this model starts with the premise that a person has the entry-level knowledge to do their job, and then supports the person’s development over time through the acquisition of skills, experience (benchmarks or tasks) and the reinforcement of relevant behaviors (competencies). The components of this model are discussed in the context of contemporary legal practice below:

Competencies and benchmarks: Who does what in law firms has changed. Work that has been retained by law firms is not being done by the same people or, in some cases, not by people at all. This has required a comprehensive review, reinvention or development of new competencies and benchmarks in law firms. For example, in those firms where work once done by junior lawyers is now undertaken by legal process outsourcers (LPOs), legal service providers (LSPs) or artificial intelligence (AI) (soft AI like research and document review and hard AI that involves machine learning), competencies and benchmarks focused on these areas for junior lawyers are no longer relevant, and the capabilities required of an entry-level lawyer have changed. The changes have not been limited to junior lawyers. The emergence of new professionals like project managers, cybersecurity specialists, fee analysts, data analysts, and so on have provide support and bridged capability gaps for lawyers. However, they have also, for now, removed these capabilities from lawyer jobs. So, if your firm’s competencies and benchmarks have not been reviewed for a few years, they should be and very likely will need to change.

Recruitment: This is one of the big areas of change—not surprising when you consider how important it is for people to “hit the ground running,” and the significant, adverse cost associated with unanticipated/unmanaged turnover.

Recruiting great talent is no longer tied to seasons. It can’t be—with more part-time and casual employees than permanent, recruitment has to take place year-round. Likewise, as the war for talent increases (and it is), exceptional employees need to be approached as soon as a business case is made for them to join the firm. Recruitment also needs to start earlier. It’s important to have relationships with law schools, business schools, etc. to know about the student who has just developed that new legal app or is has launched their first LegalTech start up—you firm will want to employ these people, partner with their organizations, invest in them or even buy them to augment your own practices and capabilities.

Recruiting needs to be diverse and different. Different doesn’t happen by doing the same things. Recruiting the same people in the same way with the same background and from the same law schools is a recipe for cloning, not innovation. The value proposition for law schools has changed—understanding law in context, being able to use LegalTech tools in practice, being flexible, adaptable, resilient and creative, as well as knowing how to build relationships, are essential skills for law graduates today. In fact, they are so critical that some firms have added a range of psychometric tests to help identify candidates who demonstrate them. If these skills are not emphasized in your go-to law schools, change schools. Recruiting people with different backgrounds and experiences will bring new approaches and points of view to the firm. If your firm is transitioning from traditional to “new law” (and that is just about every firm now), you need these people.

Recruit differently for different people. If you want people to demonstrate different skills or the same skills differently, you may need to change where the firm looks for its employees and how candidates apply. Recruitment practices have to incorporate the use of digital media. Written CVs are now one of many ways to apply for a position – video is on the rise. It’s important that the firm’s recruitment processes, tools and systems support it in doing things differently.

Recruit with the firm’s current and future business in mind. The people your firm employs today will grow with your firm or outside it. Knowing the firm’s growth strategy will assist in identifying people who can build the capabilities the firm needs now and in the future. This means when you look at your next lawyer candidates, you should focus on their undergraduate degree perhaps even more than their JD—capabilities in engineering (design thinking), IT, commerce, digital media, entrepreneurship and languages, to name just a few, have increased in importance and relevance for new law. Firms need to consider, carefully, if thinking “just like a lawyer” is enough.  

Use data. The great thing about social media is that is encourages us to share more and build deeper relationships faster, and it builds a searchable cache of data. Where data is publicly available, recruiters are and will continue to gather, analyze and consider it when recruiting. While this may seem ominous, it may also be helpful. Social media may reveal qualities and contributions that are not part of a standard, formal CV or event an in-person interview. One thing is for sure, that depth and breadth of data as a recruitment tool has extended way beyond a basic internet search.

Learning: The day of the in-person monologue lecture is over. No one has the time or inclination to sit through these presentations. This is not to suggest that face-to-face learning has no place in the new law firm—it does, but it now just one component of many in the world of experiential learning. Learning is a participatory activity. Great learning comes when people can ask questions of experts, observe, try things out and receive constructive feedback, so they can get better when they try again. If it’s just information that people need, then the increasingly sophisticated array of online offerings can fill that demand. Given the increase in part-time and casual employment, and that these people would usually arrive with a high level of work-based knowledge, eLearning can provide institutional information that will assist them in “hitting the ground running.” At the other end of the career continuum, it can also capture the knowledge, legal skills and expertise that the large and soon to be retiring Baby Boomers will otherwise take with them when they go.

Career development: As discussed earlier, in a workforce that is predominantly part-time and casual, and where careers are increasingly less linear, the “up or out” partnership track for lawyers will become increasingly less relevant. As the other legal professions (other than lawyers) continue to emerge, evolve and become integral to the firm’s business and/or the leaders/managers of new income streams, law firms will not be able to maintain their exclusive focus on lawyer careers and career support.

Engagement and retention: As discussed earlier, since the legal workforce is likely to be more mobile, law firms will need to adopt a different definition of “retention.” Where this used to refer to a long period of uninterrupted service in one firm, it now refers to the door being left open for people to return after a time away from the firm, and assuming a business case supports it. It also brings into focus the need for comprehensive and well-managed “returnship” programs like those developed by the OnRamp Fellowship Program for women returning to law, finance and tech. This level of flexibility, fast becoming a cornerstone of new law, will need to be supported by well-structured, thoughtful and transparent flexible work arrangements (including parental and other family leave) that support and do not hinder career advancement.

Feedback and evaluations: The media is full of talk about the “death” of the annual performance review. Why has this struck such a chord, particularly in professional services firms? And what will talent management do with all the time they no longer need to spend on these reviews? The answer to these questions is intricately linked to the all-consuming billable hour. For many if not most firms, feedback, annual performance reviews and more generally performance management, has been viewed almost exclusively through meeting billable hour targets. High-performing lawyers met and exceeded them. Lower-performing lawyers did not. The problem is that fee structures for professional services and the way these services are delivered have changed. Given the bristling pace of practice today, no one can afford to be giving feedback annually—is just too far away and does not support critical mid-course corrections. In a legal services world increasingly dominated by fixed fees, value billing, and performed by a mostly part-time and casual workforce (who may or may not be with the firm for a year), performance managed by units of time annually has no relevance. While the annual review may hang around for a while yet, partly due to habit and partly as a useful point of reference, it is likely to be relegated to second place in favor of ongoing feedback delivered via all manner of social media. This will also undoubtedly spawn or entrench the importance of mentoring, coaching and sponsorship programs in firms. It is hard to imagine how the more transparent and candid conversations that tend to be the product of these programs could do anything but enhance employee engagement and productivity. These conversations will also provide the roadmap for and model the competencies used in building productive working relationships outside the firm.

Compensation, rewards, and promotion: Capable people should be compensated for doing exceptional work for a client, rewarded as that work progresses, and promoted when they are able to do the job. The definition of “success” and “excellence” on the job is changing in law firms. In new law, it is defined less by how much you billed and more on the outstanding outcomes you delivered to the client. It is less about time served, and more about what capabilities and particularly what experience you bring to the firm, share with colleagues and, as a team deliver for the benefit of the client. In a client-driven business, compensation, rewards, and promotion cannot be about what any one individual achieved for themselves—it just doesn’t work.


New Role for Talent Management in Law Firms

If it is not already apparent, talent management in 21st century law firms is complex. It requires knowledge, skills and competencies that support and have been defined by the Professional Development Consortium (the leading professional association for talent management professionals in the US) in a way that identifies these specialists as one of the new professions within the legal profession. Other specialists in law firms include those in finance, IT, data and privacy, human resources, knowledge management, diversity and inclusion, marketing and business development, and pro bono. As firms continue to navigate the choppy waters from traditional law to new law, they will increasingly require the expert advice of their people, and need them to occupy the role of business partner and not CLE administrator. In particular, they will need to rely on these talent management professionals to support initiatives in the following key areas:

  1. Leadership development: Leaders of new law firms are different. They break down barriers to inclusion, which can often mean restructuring a firm from governance to succession planning. These leaders tend to dispense with hierarchy in favor of diversity and inclusion; don’t look for ways to defend the status quo but revel in anticipating and actively pursuing new income streams in partnership with others; and inspire by articulating and modelling the behaviors they wish to see in others. They also realize that leaders of new law need to think differently, act collaboratively and learn more about their role every day. As law firms continue to bring in specialist professionals from other industries to take on leadership and management roles in firms, or expand the service/products and capabilities they offer through the acquisition of a LegalTech service/product providers, the profile of law firm leaders will continue to change. The criteria used to identify these leaders will change too, as will the means by which their success will be measured. Talent management professionals are key to identifying, supporting the development of, and acting as trusted advisor to these new leaders.
  2. Organizational development: The role of the talent management professional has, for some time, extended well beyond leading and managing the capability development of lawyers in a firm. While that remains an essential part of the role, as lawyers increasingly become one of many recognized specialists in a firm, the remit for talent management will continue to expand. But, talent management professionals also need to understand the context in which they work—what work the firm does, for whom, how and why—if they are to advise leadership and ensure the firm has the right people to deliver its services/products. This integral link between strategy (the legal market), business (systems, processes, culture) and people places talent management squarely in the space of organizational development. Given this, it is not surprising that “people” functions in law firms are now being combined with innovation, culture and strategy.
  3. People Data: Law firms are rich in “people data.” This data can assist in making better-informed decisions in many different areas, particularly in recruitment and performance management. It can help identify “best fit” candidates for different positions; anticipate when difficult tasks will arise and allow for proactive additional support if needed; it can even identify when the performance gaps are the consequence of the actions of an unskilled manager. This sort of data analysis and predictive analytics not only anticipates and addresses capability gaps quickly, but also allows for individual improvement to be linked to overall business performance. For new law firms, people data is as much a key business and management tool as it is a key component of the firm’s risk minimization strategy.

Where to from here?

If we have heard it once, we have heard it many times: “People are our greatest asset.” The difference between then and now is that we need to mean it. People innovate, law firms don’t. Great people always have somewhere else to go, and now, they definitely will. Talent management for 21st century law firms is not a luxury, it’s a necessity, and it’s not a role for amateurs. Managing talent well has always been the key to success, placing talent at the top of the priority list is the only way that can be achieved—in this time of unrelenting change in our industry, and where people are the only way we can truly differentiate, making sure your talent management professional has a seat at the strategic table is not only good business but also makes good sense.

About the Author

Terri Mottershead is the principal of  Mottershead Consulting, a talent management consulting firm focused on the legal industry. She formerly was a practicing lawyer and led the in-house talent management departments for  global law firms and legal associations, and has taught in law schools in Asia, Australia, and the US.

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