In a new report, we see how much legal talent and ESG concerns are weighing on the minds of many law firm leaders
Leaders of today’s large law firms certainly have plenty to keep their minds occupied. Chief among these considerations with which they must grapple are, unsurprisingly, concerns related to law firm talent — how to recruit and retain top lawyers and staff, and how to build a culture in which those people will want to work.
In our latest report, the Thomson Reuters Institute compiled interview responses from open-ended questions posed to several dozen global law firm leaders and found that talent as well as environment, social and governance (ESG) concerns topped the list of leadership challenges as firms continue to strive to find new ways of working.
Talent appears as a hydra
Talent concerns consumed the lion’s share of these leaders’ thinking, and rightfully so. The competition for talent has been particularly fierce over the past six months, with many law firms constantly struggling to keep up with the latest industry pay scales. And those firms that are not keeping pace on salary are left wondering how to recruit and retain talent in the face of more lucrative compensation.
You can access a full digital copy of this report on talent and ESG concerns within law firms here.
The financial pressure the seemingly ever-increasing salaries have placed on firms has been felt globally and by nearly every size of law firm. At the same time salaries are increasing, many firms report a softening in the geographic restrictions that had previously guided their recruitment efforts. This development leaves large firms free to recruit from a broader pool of talent, while firms that had not traditionally had to worry about losing talent to larger firms are now discovering new competition for top recruits.
Beyond recruiting, retention has also taken up a large space in leaders’ minds, with concerns over attorney burnout and overall well-being increasing. Remote work has led to a breakdown of team cohesion and camaraderie; and in response, firms have begun offering on-site or virtual support services to lawyers, as well as new strategies to build better bonds. Firm leaders are paying particular attention to the impact that a lack of culture and cohesion has on women and other minority attorneys, as research indicates that they are at even higher risk for burnout and attrition.
Globally, return to office arrangements are greatly varied, with some regions, such as firms in Asia, returning to the office nearly full time, while law firms in the United States continue to view two or three days per week in the office as the likely new standard. As firms attempt to execute their return-to-office plans, many associates are voicing an increasing desire for continued flexibility in their working arrangements.
ESG as a structural pillar
Closely related to these talent considerations are law firms’ actions and plans regarding ESG initiatives. It is becoming increasingly important for law firms to not only be able to articulate their own values through their stated ESG priorities, but to also demonstrate to clients how the firm can help clients fulfill their own ESG goals. Particularly among associates, a firm’s purpose goes beyond whether associates feel like they belong at a given law firm, and instead may determine whether they want to work for that firm in the first place. And the same is increasingly true for clients as they consider whether they want to hire the firm. ESG is quickly becoming a closely interrelated structural component of most law firms, impacting the firm’s client relations, talent management, and broader culture.
The report also addresses other considerations of law firm culture, particularly the difficulty of creating and maintaining culture in a largely remote working environment. Many firm leaders have spoken about the loss of workplace culture during the pandemic as “missing the glue” that holds their firms together, with some describing it as a loss of a “sense of family.” While most leaders view a return to in-person working as a necessary component of reinvigorating culture, they do not believe that returning to the office will alone be sufficient to accomplish the goal. Leaders spoke of the need to be more proactive about fostering culture while being mindful of the communications they are putting forward, both in word and action.
New ways of working internally and with clients
Naturally, all of these considerations also impact how law firms work, both internally and with their clients. Firm leaders and struggling with questions related to the best use of physical space, how to respond to attorneys’ desire for less travel, and how to improve the efficacy and adoption of the firm’s technology. The pandemic helped catalyze certain levels of technological change, particularly related to the use of electronic signatures, virtual meeting programs, remote collaboration platforms, and client portals, all of which have become nearly universal. Further, clients have responded positively to these developments.
Yet there remains a nagging concern that law firms might lose focus on some aspects of client relationships for no reason other than the sheer volume of challenges that today’s law firm must face.
The law firm leaders interviewed for this report shared a great deal of insight that can help other firm leaders in their decision-making and workplace strategies going forward.