Steve Blundell – Head of Acritas Advisors, Thomson Reuters
Jay Connolly - Global Chief Talent Officer, Dentons
Caroline Firstbrook – Chief Operating Officer, Clifford Chance
Jon Kanter – Chief Financial Officer, Goodwin
David Patient – Managing Partner, Travers Smith
Lucy Leach, Technical Research Director, Acritas (part of Thomson Reuters)
In the wake of the turbulence and uncertainty created by the pandemic, the question of how law firms can get the best out of their resources is ever more pressing. In this webinar addressing Firm Acceleration, panelists discussed research carried out by Acritas, part of Thomson Reuters, which analyses data from across multiple databases to answer the question: What are the characteristics shown by law firms with the highest financial performance? How do they strategize? How do they attract and nurture talent?
Lucy Leach delivered an overview of the findings, explaining that, for the purposes of this research, a high performing firm is one which has achieved significantly higher 2-year growth per lawyer in terms of profit margin, total profit, and revenue compared to its peers. Acritas has uncovered four characteristics common to these high-performing firms:
- Firm vision and strategy – partners at high performing firms were more engaged with the firm’s strategy and had confidence in their leadership team to deliver.
- Strong client perception – these firms are most often short-listed for the top-level work, and have a strong credibility in the board room
- Strength of individual lawyers – outstanding individuals are valued for their business acumen and for their leadership of client facing teams
- Business services support – the firms which invest the most in their business services teams see the greatest return, as lawyers within these firms rate their business services higher than their peers. In particular, IT and finance functions stand out.
These findings resonated with the experiences of panelists, who elaborated on the topics of business services, junior talent, and effective strategy.
Reinforce the vital role of business service functions
Panelists agreed that emphasizing the key role that business service professionals play in creating and putting into action an effective strategy is an essential component to success. Caroline Firstbrook commented that one of the biggest inclusion issues faced by law firms is that lawyers don’t necessarily respect the professionalism and skills of their business professionals. David Patient elaborated, observing that decreased investment may not lead to greater profit margins, and that highly skilled business professionals will continue to be hugely important during and after the pandemic. This will be an important issue to bear in mind as firms look to make cuts to overheads.
Nurture junior talent
As the pandemic has necessitated an immediate shift to remote working, law firms face the challenge of how to ensure that younger professionals – both associates and business services professionals –gain the experience and insight necessary for their development. Panellists particularly highlighted the importance of strong, continuous internal communication to keep junior professionals engaged with the business; Jon Kanter welcomed the increased level of communication that firms have seen from senior leadership during this time and hopes this will continue going forward. Jay Connolly underlined the human side – empathy, connection, and emotional intelligence – anticipating that, both now and as we look towards 2030, it will be vital that lawyers can demonstrate these qualities.
Strategy involves everyone
When it comes to strategy, panellists emphasised the importance that everyone in the firm – right down to the most junior employees – understands it, understands how their role contributes, and can champion it. Jay Connelly commented that, if done right, an engaging strategy can both attract talent to a firm and motivate them to stay. To formulate a strategy that is widely supported, David Patient highlighted the importance of a consultation process to get partners involved and cultivate a sense of ownership; Caroline elaborated that a degree of autonomy, whereby practice areas are given direction but are able to refine what implementing the strategy will look like, is effective in cultivating an entrepreneurial and collaborative culture. Finally, Jon Kanter advised that, though metrics are useful, they should not be the driving mechanism on a strategy – if a strategy is strong, and has firm-wide support, the numbers will follow.
The overarching message that came through from the discussion was that it’s people that make a firm; firms that are able to invest in and look after their people reap the reward in the value received by clients, and the widespread support for firm initiatives and strategy.