A Survival Guide for Legal Practice Managers

A Survival Guide for Legal Practice Managers

Should I stay or should I go?

Tuesday, May 16, 2017

By Michelle McColl and Maura McConnell, Co-Proprietors, In2view Recruitment


There are promising signs that the employment market is picking up in the legal sector.

According to the results of the latest ALPMA Australian Legal Industry Salary & HR Issues Survey, an increasing number of Australian and New Zealand law firms plan to hire new staff in the next twelve months.  In Australia, this number has jumped by 20% - with 51% of firms indicating they plan to recruit new staff in the next 12 months, compared to 31% last year.


For the first time since the survey commenced, the number one HR issue identified by Australian firms was employee retention and talent management, closely followed by 'finding good staff'.


A more buoyant employment market obviously presents both an opportunity for those who are considering changing jobs and a threat to employers.

Counter Offers


As recruiters, we are seeing an increase in the number of counter offers offered to employees who have been offered a job elsewhere to encourage the staff member to stay.  Counter offers can be presented in a number of ways, such as a salary increase, promotion, opportunity to earn a bonus or other incentives/benefits.

 

Managing Counter Offers

 
If you find yourself in this position, there a number of things to consider:


Counter offers add a layer of complication to the recruitment process, and leave you wondering whether maybe you owe something to your current employer, and that maybe things will improve if you stay.


Consider why?


The first thing you should do is consider why the offer has been made by your employee.


Typically, counter offers are made because:


  • replacing you will be an expensive and time consuming exercise;

  • your employer will lose all your knowledge, experience and expertise;

  • your employer requires you to complete the project on which you are currently working;

  • your employer does not have the time and resources to re-train a replacement;

  • losing staff may reflect badly on your manager/employer.

Consider what next?


You need to consider that now your employee knows you have been considering leaving, relationships may be strained moving forward.  Following your resignation, your loyalty and commitment to the business will be in question, and you may be treated differently. 


Your employer may begin seeking a replacement, regardless of whether you stay or leave.


Also consider why you are being offered this new package now, rather than prior to your resignation?


It is also important to reflect on why you felt motivated to move in the first place.  In what ways is your new employer an improvement on your current employer?  Why do you want to work for them?  What opportunities does the new position offer that cannot be matched by your current employer?


Finally, research reveals that most people who accept a counter offer are likely to leave their job within six to 12 months in any case. 


Are you just deferring the inevitable if you accept the counter offer?


In the end, the decision will come down to what is best for you and your career moving forward.  Good luck!


Editor's Note

ALPMA 2017 Salary & HR Issues surveyIf you would like to learn more about the 2017 legal employment market, salaries offered for legal, management and administrative roles at Australian and NZ law firms, bonuses and benefits paid and the biggest HR challenges facing law firms, then purchase the 2017 ALPMA Legal Industry Salary & HR Issues Survey Report.  This survey is available for $550 (incl GST) for ALPMA members or $2,200 (incl GST) for non-members.  If your firm participated in this research, you have received a complimentary copy of the report.





About our Guest Bloggers


In2view
Michelle McColl and Maura McConnell are the co-proprietors of In2view Recruitment, which opened its doors in 2008.  Between them, they have in excess of 40 years’ experience in the recruitment industry, gained across many industry sectors.  In2view are ALPMA SA Corporate Partners and the SA State Partner for the 2017 ALPMA Australian Legal Industry Salary & HR Issues Survey.







ALPMA Member Q&A with Mark Beale, General Manager at Malley & Co

Tuesday, January 17, 2017

By Mark Beale, General Manager, Malley & Co.


In this ALPMA member Q&A, we interview Mark Beale, General Manager at Malley & Co, who shares his experience in the New Zealand legal industry and discusses what's in store for 2017.

What are you planning on doing more of this year? 

Having just completed eight days in Australia’s delightful Central Coast, it’s hard to personally go past more recreation time, but sadly I can hear the office calling me back. My insightful and pinpoint forecast for 2016 was of there being “change”, I’m going again with that this year. Change as they say is as good as a rest and more of that seems pretty compelling. There is plenty ahead of me on that front. 

On the professional front, I’m looking forward to the ALPMA Summit in Brisbane, which keeps getting better and bigger every year. The opportunity to network for those of us walking similar paths (sometimes as the lone manager in a firm) is incredibly useful and the quality presentations, always return you back to your firm with fresh ideas and inspired and reinvigorated. Professionally too, I have a big year ahead having only just moved into my new role with my firm in October last year. There are some exciting productivity and knowledge management projects, that I’m looking forward to leading for the firm as well as driving our own learning and development program for our up and coming lawyers.

What are you planning on doing less of?


The plan would be to work less but achieve more, I’ll get back to you on that.

How did you get started in the legal industry?

I’ve been involved with legal management in several firms over half my life. I was told several years ago that once you are immersed in law firm management it’s hard to extract yourself. The clairvoyant accountant, has been proven correct. I began my working life as a journalist in NZ but after two years working in London across a range of administration positions, I turned my focus towards management and more particularly systems administration in a legal practice. Things progressed and over the years I have worked in a range of management roles within legal firms involving technology, business development, human resources and finance functions. Oh, how I wished ALPMA existed back then!

After over six years in a smaller commercial and property law practice, last October I moved to a much larger full-service practice in Malley and Co. Having seen off the themes of reconstruction and business change which all Christchurch legal practices experienced after the 2010 and 2011 earthquakes in the city, it was simply time to change and look for fresh challenges that the new firm now offers.

What do you think is in store for the NZ legal industry this year?


I was at the NZLaw Association conference a couple of months ago and John Chisholm, the guest speaker, noted that in his opinion there had been more change in the legal industry over the last five years than in the preceding 30 that he had experienced. I have to agree (although John is older than me). The New Zealand legal industry is not exempt from these changes. Younger practitioners are confident, motivated, looking for development and challenge and expecting that their firms deliver the opportunities and the support systems to make them better lawyers. Pragmatically, the current owners of law firms have to ensure as part of their succession planning that their practice is modern, capable and an attractive proposition for their potential new business owners. Equally, firms have to deliver that same capability and attractiveness to a more savvy, researched and price sensitive new generation of clients. 

There is a lot of work ahead for legal practices in the coming five years on both sides of the Tasman. We are beginning to see the emergence of new providers of specialist support services in New Zealand, perhaps not to the same extent as in Australia yet, but their business propositions offer exciting opportunities for law firms to stay focused on their core deliverables to clients, while contracting out knowledge and practice support services with these new legal service providers. It’s very interesting.

How does ALPMA deliver on its promise to you?

I can’t believe how fortunate we are to have such an organisation providing a wealth of constant professional development opportunities for law firm managers. When I first started in law firm management, the most you could hope for was the ALA management periodicals and the occasional offshore conference. Times have changed. I’m incredibly proud to see how ALPMA has developed over the last few years. The development opportunities, the content we provide and the way it is delivered to managers in the city and countryside of Australia and New Zealand is world class. Finally, and on a more parochial note, I’m also particularly heartened by the New Zealand branch’s growth and how its membership has turned out at each Summit in increasing numbers. That tells me that ALPMA is meaningful, relevant and delivers to its member.


Editor's Note

Now is a great time to become an ALPMA member. Membership is a highly cost-effective investment in developing your leadership and management skills and extending your professional network. It will also give you valuable insights to help you improve your firm's performance in a complex and rapidly changing legal environment. ALPMA membership until 30 June, 2017 is just $A250 (ex GST) and less if you work outside the CBD or in New Zealand. ALPMA also offers generous discounts for firms that support multiple memberships.

Your membership includes free attendance at our regular practice management and Leading Your Firm events, free access to content in the ALPMA On-Demand Learning Centre - and much more. Join now.



About our Guest Blogger

Mark BealeMark is the General Manager at Malley & Co. He brings considerable legal management experience having worked for national and regional legal practices over the past 25 years. As General Manager at Malley & Co, Mark is responsible for ensuring the performance of the business across a range of management functions including finance, technology, business development and team resourcing.

Mark has a particular interest in developing and implementing business initiatives that focus on improving performance and delivering accessible and user friendly service to his firm's customers. 

Mark is a member of the Australasian Legal Practice Management Association and serves on the ALPMA New Zealand Executive Committee and the ALPMA Board.

Personal Reflections on 2016 by ALPMA President, Andrew Barnes

Tuesday, December 20, 2016

By Andrew Barnes, CFO, Lantern Legal Group and ALPMA President


When I think back on our year with ALPMA it is difficult not to dwell on the success of our Summit, held in September at Etihad Stadium Melbourne. The event is growing from year to year and this year to have record levels of attendees and trade exhibitors being added to an exceptional program was something we are very proud of as an Association.

On day one there was something for everyone, but many people still think back to the power of the speech given by Catherine McGregor about her life, her challenges, her opportunities. How she interwove so many relatable snippets into one incredibly moving story was a highlight. We were also fortunate to have:


  • The inimitable Ron Baker as MC
  • Dr George Beaton again reminding us that to stand still will probably mean we go backwards
  • Matthew Burgess taking us down the ‘Lean Startup’ path and challenging us to change and ‘fail fast'
  • Dr Bob Murray reminding us that ‘praise is the biggest weapon in a leader’s arsenal for change’
  • Steve Wingert and Andrew Price talking about change management in law firms in real, relatable language


In 2016 we have maintained our commitment to undertaking research projects aligned with our six pillars of Learning and Development and also the Thought Leadership Award presented annually at Summit. There is often so much that falls from these projects that it can all be quite overwhelming, but our position at ALPMA is that these are not one-size-fits-all and that there is something for every firm to take away and work with. Firms have different cultures and different life cycles and therefore do not fit neatly into the outcome synopsis in research projects. I suggest you have another read and choose something to work with … small steps are better than no steps!

Our research for 2016 is summarised here:


  • Finding quality staff remains the top HR challenge for law firms, more work to be done on diversity and inclusion at firms etc 


Any thoughts at this time of year always extend to thanking our fantastic team of volunteers on our Board and various committees across Australia and New Zealand. Thanks also to our support staff across the Association who do so much behind the scenes to bring our programs to life. We remain absolutely committed to ALPMA’s core promise to members. We are continually pleased with the way our membership engages with the association and enables us to remain aligned with their expectations. As our Board tries to navigate a way through an ever-increasing competitive landscape for professional development providers, we strive to balance immediate member needs with those of an Association who is more frequently competing to hold its’ profile and standing on a national and regional (international) basis. Thanks to everyone who have contributed in some way to us having a great 2016!

As we look forward to 2017 we can expect more than just business as usual. We have provided branches with extra budget funds to develop local initiatives and enhance the offering. This should ensure the core promise to members remains a focus and that there is a greater value proposition through the branch networks. Our National Learning & Development group is planning new workshops to complement existing programs. Our Summit committee has already commenced planning for Summit 2017 in September in Brisbane. We continue to work on collaborative relationships with groups such as the Australian Law Management Group (particularly after the success of our joint foray into Singapore in November), College of Law, CPD for Me and others in this space. It is a challenging time for Associations such as ALPMA but with those challenges come opportunities and we look forward to exploring these opportunities with our members.

Thanks for being part of ALPMA in 2016 and I wish you and your friends and families the very best for the festive season.


Editor's Note

This is the last ALPMA blog post for 2016. We look forward to the weekly posts resuming on January 3, 2017.

About our Guest Blogger

Andrew BarnesAndrew Barnes is the President of ALPMA. He is the financial controller for The Lantern Legal Group Pty Ltd, which practices under the firm names of Sladen Legal and Harwood Andrews.  He works closely with the principals to deliver strategic planning, reporting and budgeting initiatives and applies his robust commercial skills to drive continued business improvement.  Andrew worked in public practice, as well as financial services and broad industry roles prior to joining the firm in 2003




7 strategies for building a high performance culture

Tuesday, December 06, 2016

By Fiona Crawford, GM Human Resources, InfoTrack



‘High performance’ gets thrown around a lot these days as a new buzz word, but few businesses know what it is or how to define it. Everyone seems to be striving for it but many find it hard to articulate what exactly it means for their business. It is not as complicated as it seems – here are some simple steps to cultivate a high performance culture in your firm.

Define what high performance means for your business


High performance is something that should have a unique definition for every firm. What are your firm’s values and how do you expect your employees to fulfil them? What do you want to drive and motivate your employees? How will you define their success? Take the time to map this out – what are the characteristics you would expect from a high performance employee at your firm?

At InfoTrack, we have developed an employee value proposition defined by ‘effort over obligation’ – we expect our employees to come into work with a motivation and effort that overshadows any feeling of obligation. If employees are thinking about obligation, they’re missing out on opportunity - we are always thinking about opportunity and where it can next come from. We don’t dwell on what we are obliged to do and that’s why our workforce is brimming with ideas and innovation, and opportunities never pass us by.

Recruit the right people

Once you’ve defined what high performance means to you, you need to recruit the right people. A robust recruitment process should include clearly defined roles and expectations and be run by someone who understands your firm and its values. It should include multiple interviews with different people within your firm, and interviews should be designed to screen for high performance indicators that you are looking for. At InfoTrack, myself and our CEO take time to interview as many potential candidates as we can because we understand how important it is to our business to hire the right people.

Be transparent about your strategy

Being transparent about your firm’s strategy and goals helps foster a sense of trust and mutual understanding. The more employees understand what you’re working towards, the more enthusiastic and involved they will be. When employees can clearly see how their work is adding to the end goals of the firm as a whole they have a greater sense of purpose. At InfoTrack we have companywide update each 4 months to detail our new strategy to our employees across Australia so everyone knows what part they’re playing to reach our goals.

Don’t underestimate the importance of succession planning

Succession planning is key - be open and honest about opportunities for growth and ensure that you speak to employees about their careers and where they see themselves in the future. The clearer vision an employee has about the future of your firm and their place in it, the more dedicated and motivated they will be. It’s important to ensure there are no single points of failure to keep a business running at top performance.

Track employee engagement

Engagement occurs when employees feel an emotional connection to your firm and its goals. Employees essentially want three things; a meaningful vision of the future, a sense of purpose and great relationships. The more engaged employees feel, the more productive they are, the better service they provide and the longer they stay in their jobs. Engagement fosters a collaborative, empowered, innovative, productive and overall positive environment.

There are a number of ways to track engagement – ensuring open communication with employees along with regular reviews and opportunities for feedback is key. Having a formal system in place such as employee engagement surveys helps to hold you accountable and creates a measuring stick. Employees will appreciate the opportunity to give feedback and will feel that they are being listened to.

Seek out diversity

Diversity should be seen as a necessity in any modern firm. Employing people with a wide range of backgrounds brings a unique mix of talents, perspectives and experiences to your workforce. Having a variety of different viewpoints challenges people to think outside the box and encourages creativity and innovation. Diversity helps to ensure your firm will continue to evolve and can be a significant differentiator in today’s competitive market. It can not only help attract and retain the right employees, but also the right clients.

Recognise achievements

The power of reward and recognition should never be underestimated. Achievements of all kinds should be celebrated, from individual milestones to team and firm-wide efforts. Whether it’s a work anniversary or winning a big case, make sure employees feel acknowledged and appreciated. This doesn’t mean you have to break out the cake for every achievement, sometimes a thoughtful email will do and other times a real celebration will be in order –just make sure you take the time give kudos when they’re due.

Always remember that your employees are your most important asset; they are the face of your firm, they are the ones interacting with your clients every day and they will define your firm’s future. A high performing firm requires a high performance workforce.


About our Guest Blogger


Fiona Crawford
Fiona Crawford is GM of Human Resources at InfoTrack, proud principal partner of the 2016 ALPMA Legal Management Summit.

Fiona has been driving the strategic people agenda to keep pace with the growth at InfoTrack since September 2015. InfoTrack recently won an Australian Business Award for Employer of Choice 2016, and has also been among the Best Places to Work in Australia for 3 years running.

Fiona has a wide range of experience with over 15 years’ human resources, training and coaching across a range of industries including sport, fitness, finance, hospitality and automotive. She has operated her own HR consulting business and worked on start-up HR functions, transformational cultural change programs, mergers and acquisitions, and strategic and operational HR initiatives. Her uncompromising commitment to high performance and continual improvement stems from her sporting background - a two-time medal winning Olympian in softball (Silver 2004 and Bronze 2000).


Creating a Culture of Accountability - Rethinking Traditional Performance Reviews

Tuesday, October 25, 2016

By Trudy MacDonald, Managing Director and Founder, Talent Code HR



It’s that time of year again where many businesses are preparing for their annual performance reviews. Once considered a fundamental tool to ensure employee performance that is in line with the business’ values, direction and standards, performance reviews are now often sidelined for tasks deemed more necessary.

Time and time again I’ve heard from business owners not only their struggle to find the amount of time needed to have meaningful performance reviews, but their desire to have them in the first place. It seems that most business owners, rather than seeing them as an opportunity to have open and honest discussion with their employees, see them as stressful, costly, time consuming, and in some cases, doing more bad than good for employee morale.

But can we really afford to rule them out all together? We all know that if we want our business to be great, we need great people. The only way to ensure this is through communicating with our employees how we achieve our definition of “great”, and in what ways they can continue to grow to support that.

To maximise employee growth and performance, we first need our employees to be engaged. If we look at some of the key drivers of engagement, it becomes apparent that rather than completing dismissing the practice of performance reviews, we simply need to reshape them:

  • Role clarity – A performance review that not only reinforces the direction of the business, but the role that each employee plays in this is critical for employees to feel a sense of worth and importance to the business.

  • Feedback – We should not shy away from providing both negative and positive feedback to employees, as long as it’s constructive. Even negative feedback is far more motivating than no feedback at all, which leaves employees constantly questioning their performance.

  • Career and development – One of the biggest drivers for retention and engagement is that all employees have a sense that their skills and role within the business is continually developing. Employees that believe their career to be stagnate are the employees that most need your support, ensuring the performance review focuses around honest discussion about career objectives and potentials, and most importantly, a plan of attack to get there.

  • Values – The culture of your business is underpinned by both the values that are demonstrated and not demonstrated in practice. Ensuring a good culture is key to maximum employee performance, meaning all employees must aware of the values and behaviours expected of them.

The value of performance reviews isn’t to be dismissed, but they must be seriously reworked as we become more aware of the ways to best motivate employees and therefore enhance performance. By setting in place solid objectives and practices for performance reviews throughout the year, rather than in the weeks leading up, both employees and managers are in a better position to seek real value from the process, past simply checking boxes. Frequent informal and formal performance reviews ensure that poor performance or behaviour can be addressed before it becomes any major concern, and constantly addresses the changing nature of business and employees’ roles.


Editor's Note

Interested in learning more about this topic? Trudy MacDonald will be discussing how to build a high performance workforce, retain your high performers and high potentials and create a high performance culture that attracts great people at the upcoming NSW practice management seminar on Thursday 27 October 2016. ALPMA Members can attend this event for free, while eligible non-members can attend for $99. Register now! You will be able view this seminar on-demand from early November!


About our Guest Blogger


Trudy MacDonald
Trudy is an established business leader and human resource professional who specialises in empowering businesses to become great by maximising the performance of their people. She has the unique ability to inspire people to think differently and delivers highly engaging and passionate presentations that deliver real results to business. Trudy's career is founded on an education in Organisational Psychology and spans Australia, New Zealand, the USA and parts of Asia. She has co-founded or played a key executive role in four start-up technology and human resource consulting business, three of which have been acquired by international companies.





An innovative approach to flexible working

Tuesday, September 13, 2016

By Catherine Dunlop, Partner, Maddocks 


Law firms have long struggled with the issue of high turnover rates of its employees.

This stems from a combination of intense competition for talent, the demands made of lawyers, the increasing reluctance of younger lawyers to stay at the one firm for their career and the difficulties that many lawyers have in advancing their careers while accommodating the needs of their families.

In a bid to tackle these issues, the Maddocks Employment, Safety & People (ES&P) team formally started an initiative during FY15-16 to successfully improve its flexible working arrangements. The objective was to retain the talent of our staff by improving their access to a sustainable work-life balance and to actively manage how flexible work occurred in the team. 

Our team's innovative approach to flexible working was recognised when it was selected as the winner of the 2016 ALPMA/Lexis Nexis Thought Leadership Awards at the 2016 ALPMA Summit Gala Dinner at the Medallion Club, Etihad Stadium, Melbourne last week, ahead of finalists Hall & Wilcox, Bytherules Conveyancing and the Nexus Law Group.

Changing infrastructure and culture

To make this initiative successful, the Melbourne ES&P team made a number of significant changes to its infrastructure and culture.

We adapted our policies to ensure flexible working arrangements were accessible and transparent to the entire team.

We introduced a flexibility committee, which met regularly to discuss issues and suggestions for improvement. The team realised that it wasn’t enough to simply ‘allow’ people to work flexibly and that a genuine commitment to ‘encourage’ people to work flexibly while having a rewarding career was a way to keep all in the team engaged and happy at work.

We made two guides for staff. One is a one-page guide on preferences and availability of our team members working flexibly. The second is a more detailed guide on what best suits people based on their availability when out of the office. These guides are intended to maximise their time out of the office, so they don’t feel they need to spend their day tied to their phone and computer, but still keeps them available for client matters and urgent calls. Having these guides allows for transparency about when people are in the office, what suits them and when. It is particularly important for those with carer responsibilities, so that they can genuinely prioritise their time when they are away from work.

Removing barriers to change

To support this initiative, the team have also tackled other issues, which we believed may have posed a barrier to change. This included changing our model of work from time spent in the office to the tangible work achieved. We have also created quality control policies for work handovers, to ensure work is completed on time and there is no competition amongst staff or decrease in quality. We are ensuring the right coverage is available and they have implemented procedures to ensure clear and transparent communications around work responsibilities.

The team implemented formal one-to-one review arrangements for all staff, whether they worked flexibly or not, to see how they were finding the initiative. Staff were invited to talk about how they were working, if they had carer issues, and if they would like the opportunity to work flexibly. This also provided an opportunity for everyone to voice any issues that may have arisen out of other people working flexibly in the team, in a safe, confidential environment.

While the initiative sought to change the infrastructure for existing work practices, the team acknowledged that making a small change in someone’s availability can make a big difference to them and the people in their personal lives. One of the softer aspects of this initiative was to encourage and support everyone to take advantage of flexible working, even if they didn’t need to.

One male lawyer made a small adjustment to his hours so he could drop his child off at school one day a week and come in late. Similarly, one of the senior male partners made a preference to leave early once a week so he could cook dinner for his family on a designated night. Because this was formally acknowledged by a flexible working policy, it made people want to help him. Staff junior to him often encouraged him to leave early because they knew that Tuesday night was his night with his kids.

While this is a nice example of the soft benefits of this initiative, it demonstrates how adopting small changes affected the teams overall cohesion and comradery.

Leading from the top

The leadership shown by the team’s three Melbourne partners has also played a large role in the successful implementation of this initiative. Two out of three partners in the ES&P team have led by example, and work four days a week. We have also encouraged staff to have an email footer and an out of office that clearly indicates their availability. This has normalised flexible working practices and allows for the different arrangements people have on their days out of the office. 

As one partner describes it: 

‘We don’t have people sneaking out of the office and leaving their jacket draped over their chair as if they are still at work. All too often it is easy for people working flexibly to (mistakenly) feel guilty. We wanted to change that mindset and celebrate it.’


The results

Of the 28 people in the team, 13 of those are now working flexibly. This includes two partners, two special counsel, one senior associate, one associate, four team admins and one practice support lawyer. We also now have a male lawyer, who has child care responsibilities, working a nine-day fortnight to support his wife returning to full-time work. We have two job share arrangements.

More importantly, our employees are now thinking strategically about their work-life options within the firm and there is greater awareness of the options available to them, should they need it.

This initiative has led to immediate results.

The most striking is that not one lawyer has left the team in order to take a role either in-house or at a contracting firm (where the demands on a lawyer’s time can be less than those at a large law firm) and the ES&P team has recently seen a 100% success rate of women coming back from parental leave.

Our people are working from home, and from our clients' offices. Clear communication channels exist between staff and there is greater transparency around, and accessibility to, flexible working options. Flexible working is no longer perceived within the team as exclusively for women returning from parental leave.

Offering flexible work arrangements has allowed the firm to create a culture where people feel their skills and knowledge are valued over their availability. Our staff are encouraged to peruse meaningful and enjoyable lives both inside and outside work, without worrying about one taking priority over another. This in turn has seen our staff come to work happier, healthier and more productive.

The benefits of this initiative have helped us build stronger relationships with our clients. Many of our clients are senior in-house lawyers who work flexibly themselves. Recognising their work arrangements through our own experiences demonstrates to clients that our firm's values match their own. Lawyers who now work flexibly are able to better understand and adapt to the availability requirements of their clients, which has fostered greater trust and respect between clients and lawyers.

The successful implementation of this initiative has changed the culture of flexible working in our firm. Our lawyers know that working flexibly will not stop their career advancement and they are still encouraged to take on challenging and rewarding work.

Editor's Note:

Interested readers can learn more about Maddock's innovative approach to flexible working arrangements reading the media release announcing their win "Flexible working is the new normal in law" or by watching the video below:

WATCH VIDEO

 

About our Guest Blogger

Catherine DunlopCatherine Dunlop is a partner in the Maddocks Employment People & Safety Team and was the practice team leader of the Melbourne ESP Team in 2015-6. Catherine practices in work health and safety, inquests and inquiries, and safety and discrimination related employment matters including bullying. Catherine has acted in a number of high profile safety prosecutions and inquests and inquiries in Melbourne and Canberra. She was named Best Lawyers/Australian Financial Review’s Lawyer of the Year in OHS for Melbourne for 2017.

Catherine has a particular interest in flexible work arrangements and helps clients manage the challenges and opportunities of such arrangements. She enjoys mentoring younger lawyers and staff at Maddocks, particularly when they are returning from parental leave and/or are considering flexible work arrangements themselves. Catherine works 4 days a week at work most weeks and has a three year old son who keeps her busy the rest of her time.




Replacing the Annual Appraisal Agony

Tuesday, August 30, 2016

By Ron Baker, Founder, VeraSage Institute 


Appraisal is not the system that drives pay, careers, and status; it is an incidental effect of those dynamic systems. Appraisal is primarily the paper-shuffling that sanctifies decisions already made.  ––Tom Coens and Mary Jenkins, Abolishing Performance Appraisals

Human capital determines the performance capacity of any organisation. Today’s knowledge workers, unlike the factory workers of the Industrial Revolution, own the means of production. Ultimately, knowledge workers are volunteers, since whether they return to work is completely based on their volition.

Consequently, it is difficult to understand the continued reliance on the “annual agony”—the performance-appraisal apparatus. According to Tom Coens and Mary Jenkins, in their seminal book Abolishing Performance Appraisals, over 50 years of academic studies reveal scant empirical evidence of the effectiveness of performance appraisals at actually improving performance.

Despite these facts, firms cling to it an uninformed belief that there is no suitable replacement. Where did this ritual come from?

The Origins of Performance Appraisals


The modern antecedent of the appraisal process was explained by Peter Drucker in his book, The Effective Executive:

“Appraisals, as they are now being used in the great majority of organisations, were designed by the clinical and abnormal psychologists for their own purposes. He is legitimately concerned with what is wrong, rather than with what is right with the patient. The clinical psychologist or the abnormal psychologist, therefore, very properly looks upon appraisals as a process of diagnosing the weaknesses of a man.”

The appraisal tends to focus on weaknesses, not strengths—what psychologists call the “presenting problem.” But good leaders—like good coaches—design performance processes and tasks around a person’s strengths, and ignore—or make irrelevant—their weaknesses.

Deleterious Effects of Performance Appraisals


Performance appraisals have become, to borrow a term from the medical profession, an iatrogenic illness—that is, a disease caused by the doctor. An estimated ten percent of all hospital patients suffer from this type of disease. We need to apply the Hippocratic principle of primum non nocere (“first, do no harm”) to the performance appraisal process.

The following are some of the more serious negative effects of the performance appraisal (PA):

  • PAs are counterproductive to “driving out fear,” the one emotion that Dr. Edwards Deming believed needed to be eliminated to improve human performance;
  • PAs focus on the weaknesses of the worker rather than his or her strengths;
  • Learning is overshadowed by the evaluation and judgment inherent in the PA;
  • Even if PAs convey both strengths and weaknesses, it is human nature for negative feedback to drown out positive feedback;
  • Effective feedback should occur as needed, not on an arbitrary date on a calendar;
  • PAs are a symbol of a paternalistic boss-subordinate relationship based on command and control rather than the knowledge worker being responsible for his or her own development;
  • PAs impose a one-size-fits-all approach that impedes relevant, authentic feedback to different individuals;
  • Too much “noise” surrounds the PA process: discipline or termination, pay raises, bonuses, promotions, and the like, lessening the focus on performance improvement;
  • Ranking people against each other does not help them do a better job. Ranking people, also, by definition, creates “bottom performers,” regardless of the absolute value of their work;
  • PAs devote far too much scarce leadership attention to underperforming employees rather than top performers;
  • PAs are extremely costly to administer relative to their meagre benefits;
  • PAs provide no effective method for holding people accountable for future results, since they focus on the past;
  • Any self-acknowledged weakness by a team member can be used against them, deterring learning and self-development;
  • PAs confuse delivering effective feedback with filling out bureaucratic forms and check-the-box administrative activities that have no connection to strategic purpose or value creation;
  • PAs reinforce a requirement for human-resources departments to keep KGB-like dossiers on team members;
  • PAs create a false impression that a scientific and objective process is being applied to measure individual performance. Yet all PAs, in the final analysis, are subjective and based on judgment;
  • PAs obscure the fact that a firm is an interdependent system, and what matters is the performance of the whole, which is not merely the sum of its components;
  • PAs provide the illusion of protection from lawsuits and allegations of wrongful termination, when in fact they rarely offer that protection—and often backfire in litigation.
  • According to author Daniel Pink in “Think Tank: Fix the workplace, not the workers” (November 6, 2010), “Performance reviews are rarely authentic conversations. More often, they are the West’s form of kabuki theatre—highly stylized rituals in which people recite predictable lines in a formulaic way and hope the experience ends very quickly.”

Replacing the Performance Appraisal


It is time to move to a model where courage is valued over caution, and command and control is replaced with connect and cultivate. Ultimately, it is the intensity of interactions with intelligent people, along with great ideas, that attracts and develops talent—not the efficiency of a firm’s administrative processes.

Three strategic resources replace the performance appraisal system:

  • Key Predictive Indicators for Knowledge Workers
  •  The Manager’s Letter
  • After-Action Reviews

Key Predictive Indicators for Knowledge Workers


A critical distinction is being made between a key performance indicator and a key predictive indicator. The former is merely a measurement—such as the number of patents filed, or new clients—but lacks a falsifiable theory. The latter, by contrast, is a measurement, or judgment, guided by a theory, which can be tested and refined, in order to explain, prescribe, or predict. It is the search for cause and effect.

Knowledge work is not defined by quantity, but quality; not by its costs, but results. The traditional tools of measurement need to be replaced by judgment. And there is a difference between a measurement and a judgment: a measurement requires only a scale; a judgment requires wisdom.

So many firm leaders worry that if they get rid of objective measures, they will introduce subjective bias into the decision-making process. So what? To get rid of bias we would have to give up emotions and discernment, which is too high a price to pay. Neurologist Antonio Damasio has studied brain-damaged patients, demonstrating that without emotion it is impossible to make decisions.

Admittedly, the following KPIs raise rather than answer questions, but at least they raise the right questions. Better to be approximately relevant rather than precisely irrelevant. Enlightened organisations allow their team members to decide which of the following KPIs are most important to track and develop.

Client Feedback


What are the customers saying—good and bad—about the team member? Would you trade some efficiency for a team member who was absolutely loved by your customers? How does the firm solicit feedback from its customers on team-member performance?


Effective Listening and Communication Skills


It is easier to teach reading and writing, which are solitary undertakings, than to teach listening and speaking, which always involve human interactions. But how do you measure listening and communication skills?

Risk Taking, Innovation, and Creativity


How often do employees take risks or innovate new ways of doing things for customers or the company? Do they engage in creative thinking in approaching their work?

Knowledge Elicitation


Aristotle said, “Teaching is the highest form of understanding.” Knowledge elicitation is the process of assisting others to generate their own knowledge. Note that this encompasses more than simply learning new things; it involves educating others so that they are able to generate their own knowledge.

One of the most effective techniques for knowledge workers to learn any subject—especially at a very deep level—is to teach it. How often do the team members facilitate a “lunch and learn” about an article or book they have read or seminar they have attended? How good are they at educating their customers and colleagues?

Continuous Learning


What do team members know this year that they did not know last year that makes them more valuable? This is more than simply logging hours in educational courses; it would actually require an attempt to judge what they learned. How many books have they read this year? More important, what did they learn from them?

One of the objections we hear to investing more in people’s education is “they will leave, and possibly become an even stronger competitor.” This is no doubt true, although a company faces the risk of their leaving anyway. But what if you do not invest in their education and they stay?

Effective Delegator


Peter Drucker believed that up to one-quarter of the demands on an executive’s time could be consigned to the wastebasket without anyone noticing. Does your organisation encourage its knowledge workers to become effective delegators?

Pride, Passion, Attitude, and Commitment


If you thought some of these other KPIs were hard to measure, how would you measure pride? Although not a substitute for actual talent, pride in one’s work, customers, colleagues, employer, and values are critical to operate with passion and commitment.

High-Satisfaction Day


I am indebted to John Heymann, CEO, and his Team at NewLevel Group, a consulting firm located in Napa, California, for this KPI. An HSD is one of those days that convinces you, beyond doubt, why you do what you do. It could mean landing a new customer, achieving a breakthrough on an existing project, or receiving a heartfelt thank-you from a customer. Sound touchy-feely? John admits that it is. But he also says that the number of HSDs logged into the firm’s calendar is a leading indicator—and a barometer—of his firm’s morale, culture, and profitability.

We can’t measure a doctor’s beside manner—it has to be experienced. Efficiency metrics cannot count all the energy, enthusiasm, and commitment that employees decide not to contribute.


The Manager’s Letter


Another practical suggestion to hold people accountable for their future contribution is what Peter Drucker called the manager’s letter, as explained in John Flaherty’s book, Peter Drucker: Shaping the Managerial Mind:

[Setting objectives] is so important that some of the most effective managers I know go one step further. They have each of their subordinates write a “manager’s letter” twice a year. In this letter to his superior, each manager first defines the objectives of his superior’s job and of his own job as he sees them. He then sets down the performance standards that he believes are being applied to him. Next, he lists the things he must do himself to attain these goals––and the things within his own unit he considers the major obstacles. He lists the things his superior and the company do that help him and the things that hamper him. Finally, he outlines what he proposes to do during the next year to reach his goals. If his superior accepts this statement, the “manager’s letter” becomes the charter under which the manager operates.

Procter & Gamble utilizes what it calls the Work and Development Plan, in lieu of performance appraisals, which lays out the work to be achieved in the upcoming year, how it links to the business plan, the measures and timing for success, and expected results.

What makes the manager’s letter so valuable is its focus on opportunities, results, output, and value, rather than problems, inputs, costs, and activities. Performance appraisals can only report on the past, revealing problems, never opportunities.

After-Action Reviews (AARs)



The U.S. Army’s use of AARs began in 1973, not as a knowledge-management tool but as a method to restore the values, integrity, and accountability that had diminished during the Vietnam War.

Reflection without action is passive, but action without reflection is thoughtlessness. Combine experience with reflection, and learning that lasts is the result. What percent of your firm’s time is devoted to improving the work, not just doing the work?

The objective is not just to correct things, but to correct thinking, as the Army has learned that flawed assumptions are the largest factor in flawed execution.

But perfectionist cultures, however, resist this type of candid introspection, as they tend to be intolerant of errors, and they associate mistakes with career risk, not continuous learning. The medical world has an appropriate axiom for mistakes made: forgive and remember. AARs should not be used for promotions, salary increases, or performance appraisals.

Confronting People with Their Freedom


You can’t keep on doing things the old way and still get the benefits of the new way.  ––Thomas Sowell

Because knowledge workers are volunteers, we could learn a lot from the not-for-profit sector. They know how to leverage people’s gifts, whereas performance appraisals are more concerned with people’s weaknesses.

Management thinker Charles Handy has spent his career arguing that organisations are living communities of individuals, not machines. He offers a splendid metaphor in his autobiography, Myself and Other More Important Matters, which I believe is applicable to knowledge workers and the performance appraisal process: the theater.

“There’s no talk of “human resources,” everyone is listed on the playbill, and managers are for things (stage, lighting, etc.), not people. The talent is directed, not managed, by someone who departs after the project commences. The audience feedback is immediate, not one year after the performance.”

Author and consultant Peter Block says, “The real task of leadership is to confront people with their freedom.” Performance appraisals inhibit autonomy and responsibility; they are the buggy whip of the knowledge era—an example of yesterday holding tomorrow hostage. Do we have the courage to replace such an ineffective process?

Performance appraisals are, after all, an iatrogenic illness, which means: physician, heal thyself.


Editor's Note

ALPMA Summit


Ron Baker is the inspirational and challenging Master of Ceremonies for the 2016 ALPMA Summit ‘A Blueprint for Change’ held from 7 – 9 September at Etihad Stadium in Melbourne, together with ALPMA Life Member and CEO of Coleman Greig Lawyers, Warrick McLean. Ron is also chairing a panel session on ‘Reinventing Performance Management’ which also features Jane Lewis, HR Director at Allens and Stephanie Beard, HR Manager, Harwood Andrews Lawyers, and helping delegates pull together the key take-aways from Summit in the final session “Creating Your Blueprint for Change”.


About our Guest blogger


Ron BakerRonald J. Baker started his CPA career in 1984 with KPMG’s Private Business Advisory Services in San Francisco. Today, he is the founder of VeraSage Institute—the leading think tank dedicated to educating professionals internationally—and a radio talk-show host on the www.VoiceAmerica.com show: The Soul of Enterprise: Business in the Knowledge Economy.

As a frequent speaker, writer, and educator, his work takes him around the world. He has been an instructor with the California CPA Education Foundation since 1995 and has authored fifteen courses for them, including: You Are What You Charge For: Success in Today’s Emerging Experience Economy (with Daniel Morris); Alternatives to the Federal Income Tax; Trashing the Timesheet: A Declaration of Independence; Everyday Economics; Everyday Ethics: Doing Well by Doing Good; and The Best Business Books You Should Read.




The Importance of an Employer Brand

Tuesday, May 10, 2016

By Marianna Tuccia, Legal Recruiter, empire group 


"Finding good people" remains the number one challenge facing Australian law firms, in a sneak peak of results from the 2016 ALPMA/empire Group Australian Legal Industry Salary & HR Issues Survey results, which will be publicly released on Friday.  Attracting talent and retaining quality employees is becoming increasingly difficult for most organisations. This is due to a shortage of skilled candidates, the lack of employee loyalty as well as the many opportunities that exist for lawyers to work overseas.

The question becomes how does a law firm position themselves and make themselves more desirable to future employees? In order to attract, retain and develop talent, the recruitment function should be viewed as an extension of the marketing function. Organisations (and law firms included) must have clear strategies regarding marketing their brand to existing and future employees. This is because your employees are the organisation’s best advertising.

What is an employer brand? An employer brand communicates the organisations culture, vision, reputation and value system. Therefore, anything that an organisation does e.g. how management communicates internally and how an organisations services are perceived in the marketplace, impacts on the employer brand. For an employer brand to be successful, the entire employment life-cycle (e.g. the interview process, on-boarding, induction, performance reviews, exit interviews) needs to be scrutinised and where necessary improved and enhanced. It must always be remembered that quality candidates will always have several options to choose from.

When attracting the talent, the first interview is crucial in communicating the employer brand. Interviews are always crucial in communicating the employer brand. Interviews are always a two-way street and talented candidates do not move purely for an increase in remuneration. Candidates want to know about an organisations culture and philosophy and whether it is in line with their own value system, objectives and career goals.

It is very clear that in today’s mobile workforce, retaining talented employees is just as challenging as attracting new talent. Therefore, an organisations leadership, the way it communicates to its staff and the opportunities within the organisation to develop and [progress all impact on whether an employee will stay or jump to a competitor. The lack of training and development opportunities are the main motivators in employees leaving, not necessarily reward and remuneration. Keeping your staff motivated is one of the keys to low turnover as well as offering a workplace that is flexible and a management that is transparent in their decision-making.

There are many ways for an employer to improve their employer brand. Here are just a few practical tips:

  • Undertake research (both internally and externally) regarding the way current future employees perceive the experience of working at the firm;

  • If you make a job offer and it is declined, find out why the candidate was not interested in working for the organisation;

  • Conduct an audit of your organisations values and vision statement. It may be worthwhile to conduct a survey within the organisation to compare the value statement with the employees reality;

  • Always ensure that your values, vision and philosophy are conveyed at every step of the recruitment process;

  • Conduct an annual review of your employer brand and where necessary make changes to your organisations vision statement. This is where your staffs feedback is useful.

The aim of every organisation is to be “”Employer of Choice” and a strong employer brand will help a law firm or any organisation, attract and retain the best talent.

Editor's Note 

The ALPMA Legal Industry Salary & HR Issues Survey provides a comprehensive, independent review of salaries paid for legal, management and administrative positions in legal firms, and reveals the hottest HR issues and challenges for the legal industry in Australia and New Zealand.  

252 firms completed the 2016 Australian survey, proudly supported by the empire group,  while 69 firms completed the New Zealand survey, proudly supported by McLeod Duminy Legal Recruiters. All participants will receive their complimentary copy of the report on Monday, May 9.

If you didn't participate, and would like to understand more about law firm compensation strategies for FY17 and how your firm compares, then you can purchase the relevant report for $A550 (including GST) if you are an ALPMA member who did not participate in the research or for $A2,200 (including GST) for all non-members who did not participate in the research.  Please contact Connie Finestone if you have any questions about purchasing the report.


About our Guest Blogger

Marianna Tuscia
Marianna is a specialist professional legal recruiter at the empire group, with an in-depth understanding of the legal industry. Marianna is focused on recruiting lawyers (at all levels from NQ to Partner level) for the Australian, the UK and the Asian private practice sector.

Marianna’s track record includes sourcing senior practitioners for law firms as well as sourcing lawyers from overseas jurisdictions for Australian based private practice firms. Marianna also has experience in sourcing Australian lawyers for law firms across the UK and Asia.

Marianna consults clients regarding market trends, remuneration and salary benefits and assists lawyers at all levels to help them make an informed career choice. Marianna qualified as a lawyer and worked as a commercial litigator before embarking on a career in legal recruitment.









Values Based Recruitment

Tuesday, April 05, 2016

By Michelle Sneesby, Founder and Managing Partner, empire group


In 2009, I decided to set up a recruitment agency that was different to my competitors. empire’s firm values are trust, positive culture, success and connection and we choose consultants who reflect those values. As a result, we are very passionate about sourcing the right staff with values that complement your firm's values.


Values are a vital part of all businesses. In professional services firms offering a service to clients, rather than (for example) a piece of equipment, values are even more important, as they underpin the many things you do that are intangible. In a broad sense, the values of an organisation define everything and everything can be prepared and then reviewed in light of them.

Recruitment is one such business process for which your values can be instructive. In fact, adopting values base recruitment can reduce turnover and increase retention because you are more likely to recruit the right person to start with. Performance management can also be linked to your values, but that is a topic for another day.


What are your firm's values?


Before I examine values based recruitment, it is important to understand what your firm's values are. Most organisations have stated values and a mission statement - written on the website and in written orientation materials. Some questions for you before you embark on recruitment based on the firm values:


  • How were these values arrived at? Did the partners decide what they are and impose them on staff?
  • How current are they? Do you need to find out if the firm’s values need to be revisited?
  • Do staff know what they are? If asked, are staff able to enunciate them. Even if they don’t know the exact words, can they tell you broadly what the values are?
  • Do you model the firm’s values? This question requires honest self reflection. If you can’t honestly say that you model the firm's values in your behaviour, then in the words of someone famous ‘Houston, we have a problem’. Staff can spot hypocrisy from a long distance.

If you want to adopt values based recruitment, then before embarking on this important process, you must be sure your values are current, relevant, and known, and that you, personally, and your partners, model and reflect them.

Values based recruitment


Values based recruitment takes behaviour based interviewing one step further. Most candidates are aware that most organisations use behaviour based interviewing as a means of recruitment, on the basis that past behaviour is a good indicator of future behaviour. And they probably know the type of questions you will ask them about time management and organisational skills for example. Values based recruitment uses the tools of behaviour based interviewing, and applies it to the firm’s values.


Interview format


All interviews should follow a similar format:
  • Establishing rapport by introductions and general pleasantries
  • General questions based on the candidate’s CV
  • Particular values based questions
  • Candidate to ask questions
  • Conclusion, including confirmation of next steps
If you are interviewing several candidates, don't forget to use a documented questionnaire with ratings for each question, so that you can compare the candidates objectively.

Once you have settled on your introductory questions, think about the role you are filling, and how the values of your firm could impact on that role. Let’s say, for example, that you are recruiting for a lawyer with four years post admission experience, with a view to promotion to Senior Associate, in a commercial litigation focused role, and your firm’s values are:

  • Excellence
  • Teamwork
  • Innovation
  • Commercial.
Your values based questions will be set around these values, and target associated behaviour very specifically.  Each set of questions for each value will have a main question, follow-up probing questions, and key things you are looking for on your assessment sheet. Space does not permit a full interview question sheet; however the following will give you a good guide based on one question for each value:



 Value Sample Question  Probing Questions Assessment 
 Excellence Tell me about a matter that required more than the usual attention to detail and focus to ensure a quality outcome.
How did you maintain focus? 
Were any changes to your work style required? 
Did you have to manage any difficult personalities?
Ability to recognise own limitations.
Ability to focus on end result. 
Ability to lead a team to get result
 
 Teamwork Tell me about a time when someone else neglected or failed to deliver on their work commitments and it had a negative impact on you.
What did you learn? 
How did you resolve it? 
Did you have to change your innate management style? 
Recognition of different work styles. Resilience. Learning from situations. Ability to have a difficult conversation in a constructive way 
 
 Innovation Tell me about a time you had to come up with a new way of solving a complex problem – legal or administrative.
Can you describe your approach? 
What was the outcome? 
Could this be adapted more generally in the practice? 
 
Ability to look at issues from a different perspective. 
Ability to think differently. 
Ability to solve problems quickly. 
 
 Commercial Tell me about a time you solved a client problem in a pragmatic , commercial way rather than a purely legal one
What was the result? 
What did you learn? 
How did you come to this conclusion? 
Did you have to ‘sell’ this result to the client or your supervisor? 
Putting client’s needs first. 
Assessing acceptable risk.
Thinking laterally. 
Managing up 
 



There are many more examples of this and you can create your own interview questions and assessment criteria. Still prepare your interview questions about technical legal expertise and general ability, but think about your firm values and what you hope to find in a candidate that reflects those values and prepare your questions accordingly.

Remember – taking a bit of extra time in preparing yourself for the interview and assessment process will result in recruiting the right person which will ultimately save time and money.

Editor's Note

The empire group have partnered with ALPMA to support the 2016 Legal Industry Salary & HR Issues Survey in Australia, while McLeod Duminy are supporting this survey in New Zealand. Participation is free and now open to all law firms in Australia and New Zealand. Participants receive the comprehensive report, benchmarking salaries for more than 60 roles at law firms, for free (normally $550 for ALPMA members or $2,200 for non-members). The survey closes on April 10. For more information about how to participate in the survey click here.


About our Guest Blogger


Michelle Sneesby
Michelle Sneesby has had an impressive career in the recruitment industry that spans more than 25 years. Michelle founded empire careers in June 2009, with a vision that empire careers would be a leading, consultative service for clients in legal executive, legal support and corporate support and executive recruitment across a multitude of industries - permanent, temporary and contract.

Growing from a single office in Brisbane in 2009, empire careers has now expanded to include offices in Sydney, Melbourne, and Perth recruitment markets.








How technology is changing succession planning

Tuesday, March 01, 2016

By Lisa Sikorski, State Manager VIC/SA, FilePro Legal Software



A brief introduction to the trends, difficulties and objections surrounding succession planning; a launch pad to a rewarding plan; and the pivotal role of technology.


The partner landscape


In Australia, the legal profession generates revenue of over $20 billion. In comparison, advertising has barely one-tenth the revenue, yet many more businesses are publicly listed.

In the USA and UK, law firms are regulated and unable to list on the stock exchange. However, here in Australia, that isn’t the case.

The outcome is that an extraordinary amount of wealth is tied up with law firm partners.

Baby boomer retirement


For most professional service firms, the equity of the business resides in a number of areas – the brand, processes/operations, client lists, IP, IT infrastructure, and of course, people.

A law firm’s equity is intrinsic to its partners. They are very often the brand and are strongly linked to the clients.

As such, it’s imperative that partners have a succession plan in place –whether they’re looking at a successor; choosing to sell, acquire or merge the business; or if they’re suddenly unable to work.

Yet, according to Macquarie Bank’s recent Legal Benchmarking report, only 54% of owners have succession plans in place. While this may seem low considering the nature of law firms, this has in fact increased from 28% in 2011.

Worse still, Bentley’s Voice of Australian Business Survey (which includes all professional service firms), found similar rates of succession planning, and that only 19% of firms have a written plan.

On top of this, by 2009 the number solicitors over the age of 50 increased by 11.6%, while those over 60 increased by 50%. Unsurprisingly, the number of firms with one owner planning to retire in the next three years grew from 20% to 27% between 2013 and 2015.

Making plans to make plans


So if effective succession is so important to ensuring long-term business continuity, what’s stopping people?

In a Lawyers Weekly article Warrick Mclean, then general manager of Coleman Greig Lawyers and vice president of ALPMA said:
"It's quite common, particularly for partners, to get really busy doing what they're doing and [forget] to look at the bigger picture."

Macquarie Bank’s Legal Benchmarking Report found similar results. They asked why partners don’t have a succession plan and received the following answers:

  • 42% – Isn’t the right time
  • 27% – Don’t have a successor
  • 23% – Not a priority
  • 16% – Too busy working

In my experience, succession planning is an emotive process. Many lawyers don’t like mixing their personal and business life, and end up sticking their head in the sand.

Craig Holland, former Tax Partner at Deloitte, summed it up well

“Management-succession planning requires contemplation of one’s own mortality which is unpleasant, leading to many business owners choosing to do very little formal planning when it actually comes to selecting and grooming successors.”


Get started. Now.


The truth is, there’s nothing morbid about developing a succession plan. In fact, a succession plan can act as a brilliant method to measure the health of your business.

You can then use the plan should a partner decide to retire, sell or merge your business (and yes, if they’re no longer able to work).

The first thing to do is to confront your partners to discuss and plan their succession. It takes time and money to develop a satisfactory plan, so manage everyone’s expectations accordingly.

Individual plans will depend greatly on your circumstances, but here are a few starting points:

  • When do you plan on exiting the business?
  • Take a look at your business – where are you now and where do you want to be?
  • Will your successor be internal or external? Do you have a business model that will attract the right talent?
  • Is selling, acquiring or merging the business the right option? If so, see a broker and talk to other solicitors who have taken this option

Improving your succession plan with technology


No matter your situation, new technology can bolster your succession plan in a number of ways.

Technology and process


If one of your partners were to leave the business without warning, would other staff be able to continue their work?

A number of partners take shortcuts on process – the details are kept (often very accurately) in their heads. This is understandable due to the time-sensitive nature of their role. Without an effective practice management system they often don’t have time to take notes or name files correctly.

The right technology can streamline these processes, ensuring they’re properly followed and recorded. For example, a good practice management system will:

  • Eliminate double entries and ensure time is correctly recorded 
  • Consolidate client information – including billings, trust, time, documents and more
  • Create management or accounting reports with budgets and KPIs

By making these processes ‘concrete’, you’re essentially transferring equity from your individual partners to the firm as a whole. This will not only ensure workflow remains consistent during succession, but makes the planning phase much more straightforward.

Technology and talent


If you aren’t planning on selling, merging or acquiring your business, it is even more important to attract and retain the best available talent.

The ILTA’s recent ‘Legal Technology Future Horizons’ report found technology is increasingly becoming a key factor in staff satisfaction.

“A key issue here is accommodating the technology and support expectations of new graduates coming into the workforce. New graduates typically arrive with a high level of IT literacy and familiarity with personalised tools through which they have run their lives and completed their education to date.

The “born-digital” generation will increasingly judge firms on the quality of the IT support provided and the ease with which routine tasks can be conducted.

Generation Z and those that follow them are used to applying their talents to problem solving and creative tasks, leveraging technology to find and present information. They may not be as willing to spend as much time or effort working on search and basic document review tasks that were traditionally seen as part of a junior lawyer’s training.”

Without the right technology you could struggle to find proficient successors, either internally or externally.

Technology and clients


Important client relationships are often the sole responsibility of partners. While technology can’t and won’t replace this, the increase of client-facing IT solutions can help your firm develop a relationship with clients outside of your partners.

Future Horizons revealed that there is a “clear expectation that the decade ahead in legal will be shaped in part by developments that enhance mobility, personalisation and ease of use”.

Of course, you should still continue to groom successors by including them in client relationships. However, by providing your clients with tools such as access to their matters, reports and documents – either online or via a mobile app – you will make the transition a little smoother for them.

Again, this transfers some of the equity of your client relationships from your partners to your law firm – ensuring workflow remains smooth and simplifying your succession planning.

Technology and value


Regardless of your approach to succession planning, technology (particularly your practice management system) is the foundation to any changes you’re looking to make.

Macquarie Bank’s 2015 Legal Benchmarking survey found that high performing firms are more likely to have invested heavily in technology or plan a significant investment in the future. 47% of high performing firms expect to invest in their practice management system in comparison to 36% of low performing firms.

A good practice management system will ensure a straightforward succession by creating transparent firm performance. For example, ensure your practice management system should be able to:

  • Create a client report to see their total exposure, e.g. all commercial clients’ matters and their financial status
  • Review staff performance, manage expectations and identify areas of concern, e.g. not enough work
  • Analyse your credit/debit exposure and P/L with real-time data

If you’re considering succession in the near future, you should also evaluate how different practice management systems could improve the efficiency of your firm and viability of a smoother succession plan.

If a 5-solicitor firm increases their productivity by 2 units a day at $350 per hour, additional potential earnings of nearly $80,000 a year is possible. That will add a tidy sum to the valuation of your business (and to your retirement or next business venture).

Summary


A law firm’s equity is intrinsic to its partners. Over the next 5 to 10 years this value will change hands at an increasing rate due to an age concentration of partners.

While many partners believe they’re too busy to put together an effective plan, not having a succession plan is a serious liability to the business.

You should ensure all your partners are aware of this issue and take the time to talk to the right people – whether you’re considering internal/external succession, sale, acquisition or a merger.

Implementing the right technology can assist your succession plan in a number of ways.

  • By transferring the equity of established processes from partner to law firm and maintaining consistent workflow during periods of change
  • By attracting and retaining quality staff, ensuring an adequate successor can be chosen (either internally or externally)
  • By transferring the equity of established client relationships from partner to law firm and ensuring clients remain well serviced during periods of change
  • By improving and accurately measuring the value of your firm 

Succession planning is ongoing – so plan for success and start today. FilePro is pleased to provide a comprehensive Due Diligence checklist to ensure that your next decision regarding new technology strategically and tactically maximises the effectiveness of your succession plan – just click here for your complimentary copy.


About Our Guest Blogger


Lisa Sikorski is FilePro's State Manager  for Victoria and South Australia. She has 20 years’ experience in the legal industry, predominately in practice management, and now has successfully transitioned into legal software business development and solutions with FilePro.  

Her broad ranging experience, business acumen and MBA has elevated her business development skills and  knowledge in the areas of management, HR, finance, business development, IT and business operations.  Lisa was also an active member of the ALPMA Board and Committee for 4 years. 




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