Carefully curated law firm culture has traditionally been highly valued, particularly by the largest, image-conscious firms.
However, these firms are increasingly negotiating a multi-generational tightrope: trying to reassure juniors of their commitment to flexible working and wellbeing whilst modernising compensations structures and arguably becoming even more cut-throat in their approach to billing and performance.
Amidst the future of work debate in motion post-pandemic, how can firms appeal to all generations, including those who may find themselves on different sides of the divide?
Mentoring breeds loyalty
Maintaining a positive culture among junior lawyers should appeal to partners’ built-in incentive to make money. After all, retaining a high-calibre bench of associates means happier clients and more work. Additionally, and importantly, it facilitates organic growth of the partnership.
As such, following a staggeringly successful 2021 – particularly among US firms who posted muscular profit hikes – firms are offering eye-watering salaries and bonuses in a bid to hold on to the best associates.
However, throwing cash at the problem is not a silver bullet. Culture is no longer about rewarding effort with money in the bank, or indeed even a drinks trolley on a Friday afternoon. It now involves purpose, commitment and opportunity. Happily, most firms have adapted well and are diligent about maintaining culture.
But our view is that they could go further. There is a sense that the quality of mentorship has dropped during the pandemic – in a survey we conducted at the start of this year 67% of respondents had witnessed steep declines in mentorship, with partners perhaps somewhat surprisingly 17% more likely than associates to have a negative view of mentorship.
It seems that, to hold on to the best talent long-term, firms may need to be more purposeful with mentorship schemes, including being active through their diversity networks to ensure all groups feel well-catered for.
Ultimately, a thorough mentoring programme appeals to both partner – who knows their team has the best resources to grow – and associate – who feels supported in the increasingly challenging world of law.
Life beyond the lock-step
However, beyond culture, compensation structures may prove to be the real sticking point between generations. The debate around the lock-step model vs a meritocracy has been around since man first stood upright. However, now, only a handful of firms maintain a pure lock-step model; Cravath, Swaine & Moore and Davis Polk & Wardell were among those to abandon the structure for partners during the pandemic.
The ‘lockstep vs meritocracy’ debate is somewhat self-selecting in terms of support, depending on how it benefits the individual, with associates historically for the former and partners for the latter. For instance, partners from a lock-step model that have practices that ‘fit’ with the acquiring firm can, and do, usually make more money. Moreover, it is statistically likely if that partner is to make a further move, it will not be back to a lock-step firm.
However, from an associate perspective, keeping or adopting a lock-step model could help reinforce flexible working policies. Junior lawyers can understandably get frustrated when salary and progress is not clear throughout an interview process. This is where the large US firms can become more attractive, especially when billables are the same. There is no one-size-fits-all strategy to modernising compensation structures to suit both partners and associates but ensuring transparency for the preferred model will go some way in appeasing any concerns.
Realities of law firm life
So, in light of modernised compensation structures, could an increasingly aggressive hiring market tempt firms to overpromise and risk new hires being disappointed with the realities of law firm life?
This is where associate ‘meets’ and ensuring transparency are important. The US firms tend to have very clear progression tracks, while the trajectory within Magic Circle and Silver Circle firms can be trickier to discern. Organising associate events can help to offer candidates a level of openness about a firm that a conversation with partners cannot provide. This can paint a clearer picture of the firm’s culture, reducing the risks of overpromising.
However, all of that said, associates should remember that the core of any law firm model is always going to have a level of intensity, so there is only so much that the recruitment process can do to tackle that.
Looking ahead, as millennials gradually move up the partnership track, there is likely to be an inevitable, gradual shift in how firms operate. After all, they are in the service industry and maintaining innovation will require strong leadership from partners immersed in their markets with a true understanding of their clients and their firm’s overall wellbeing; in other words, maintaining a commercial edge and quality whilst preserving a flow of rounded, well-trained and culturally suited lawyers.
It will be interesting to see how this evolves when millennials are at the heart of decision-making. There will be challenges in an uber-competitive legal market and change may be slow, but firms who “get in front” of safeguarding their cultures will have an advantage.