To compete—and ultimately succeed—in the face of client demands today and tomorrow, law firms must be ready to make changes in the way they manage their legal talent. Here’s how to start.
There is a lot of talk about a “new norm” for law firms, given the changing reality of client demands and law practice economics. As firms rethink how they do business in response, their approach to talent management will be a critical consideration. But exactly what will the right approach entail? It’s a challenging and multilayered question.
To begin, let’s focus on the client’s role in the new norm and, in turn, how that affects a firm’s talent management, from the recruitment process onward.
Seeing Clients in the Driver’s Seat
For most businesses, the core driver is customer or client demand. This means that in projecting its own needs and budgets, the business strategically takes into account the needs of its clients and what they are willing to pay to get those needs met. But in the business of law, especially in large firms, “profits per partner” has tended to be the major driver—which, from clients’ perspectives, skews the equation.
Given the current economic climate, corporate clients have said enough is enough. Witness the American Corporate Counsel Association’s Value Challenge and Index, the basic premise of which is that corporate clients (1) want to see their work done more cost-effectively (read lower fees) and (2) want more value for their dollars. The Value Index helps in-house counsel evaluate their law firms in light of these factors. As further elements in this shift, corporate clients are not only bulking up their in-house legal staffs to handle more work internally, but they are also selecting boutiques and regional firms to do work that was once parceled out only to the big firms.
So what does this mean for your firm’s talent management purposes? A number of things—including that the clients’ needs have to come first. But beyond that, it comes down to finding ways to deliver both cost-effectiveness and value through an integrated strategy.
Viewing the Separate Pieces as a Whole
Talent management encompasses multiple areas: recruitment, orientation, training, evaluation, compensation and advancement of an organization’s professional staff—for our purposes, lawyers. For the most part, law firms have treated each of these areas as separate or distinct “silos,” rarely considering the need to integrate the pieces together.
However, if talent management is to be tied together with cost-effectiveness and the provision of value in the firm’s strategic plan, then clearly all of these pieces should be integrated together, with those overseeing each area working hand-in-hand, in a coordinated fashion.
As a basis for this integration, many firms are moving to core competency models. A competency model allows each firm to identify specific factors, including both skills and individual characteristics, that lead to success in the given firm, in light of its mission, market and culture. Those factors can then be applied throughout all facets of the talent management process, from recruitment through to decisions about lawyer advancement. For example, instead of moving associates together in lockstep as one class, the firm might have three to four levels of advancement. Simply put, associates must achieve certain observable and measurable benchmarks at each level in order to advance to the next one.
Rethinking Lawyer Recruitment
Firms that truly want to integrate cost-effectiveness and value into talent management, of course, will want to take a good look at their recruitment processes too, including how to incorporate a competency model when screening candidates.
This can, in fact, be especially critical in light of clients increasingly insisting they will no longer carry the cost of training new lawyers. Firms are already considering alternative ways of getting the work done, which may include alternative staffing arrangements such as contract lawyers, staff attorneys, specialists and project managers as well as partnership-track associates.
This means there will be fewer on partnership track and, therefore, the candidate screening process will need to be more rigorous. Law school rankings and grades alone do not predict success, after all. Using a firm’s competency model, or identifying specific skills and traits needed to be successful in the firm’s practices, can help firms focus on matching their needs with candidates on a much deeper level.
The behavioral interviewing techniques used in the corporate world and some government sectors can be helpful here because they can often get at the factors you have identified as needed competencies. For example, if it is important to know whether someone can handle highly demanding clients in stressful situations, you ask: “Tell me about the most stressful time you have had in your career to date, and what made it stressful.” Or if you want to see how someone deals with difficult circumstances, the question might be: “Tell me about a time when you failed.” Since past behaviors help predict future performance, using such highly targeted questions as part of your interviewing strategy can provide essential information when making recruiting decisions.
Remember, each individual you bring on is an investment in the present and the future. At the same time, though, talent management is about much more than bringing on new lawyers and making decisions about their advancement potential. So in the next installment of Managing, we’ll focus on developing and training your lawyers as part of your strategic plan.
Marcia Pennington Shannon is a principal in the Washington, DC, attorney management consulting firm Shannon & Manch, LLP. She is coauthor of the ABA book Recruiting Lawyers: How-to Hire the Best Talent.