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Ian Hopkins

Business Improvement Consultant, Hopkins Legal Consulting Ltd

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"Culture impacts everything in a law firm, from productivity and staff retention to absence rates and employee wellbeing."

An insurance policy against toxic workplace culture

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An insurance policy against toxic workplace culture

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Ian Hopkins highlights the need for law firms to foster positive cultures and invest in management training to improve performance and well-being

It has been over two years since the Solicitors Regulation Authority, or SRA, conducted its Workplace Culture Thematic Review into law firms, a comprehensive study of law firm culture that raised concerns in some quarters about the extent of the regulator's reach.

The review identified the crucial link between law firm culture and the effective delivery of legal services, resulting in guidelines outlining the approach the regulator expects from law firms. While most respondents participating in the research felt that their firm had a positive workplace culture, a quarter of respondents felt their firm did not have a positive culture.

Many highlighted concerns such as long working hours, pressures from workloads, targets that ignore other achievements, and worries around reporting mental health issues and bullying behaviour.

The SRA has made it clear that they aim to support law firms in creating a healthy and supportive culture to deliver positive outcomes for clients. However, they will take action if they believe there has been a serious regulatory failure resulting in a toxic working culture within the firm.

Workplace culture

Culture impacts everything in a law firm, from productivity and staff retention to absence rates and employee wellbeing. It is well-proven that firms with a positive culture perform better than those that do not.

A recent study from the Chartered Management Institute in partnership with YouGov, titled “Taking Responsibility: Why UK plc Needs Better Managers”, exposes the damage that bad managers inflict on their organisations and the wider UK economy. Although the research covers a wide range of business sectors and is not legal-specific, its findings easily translate to the legal profession.

The research reveals that one in three people, both managers and workers, have left their jobs because of a negative work culture. Half of those who say their bosses are ineffective plan to quit within the next year. This high level of staff turnover has a negative impact on law firm productivity and adds significant costs to a business, resulting in reduced competitiveness and profitability.

Changing workplace culture

To change the culture in a law firm, the first step is to understand the prevailing culture and identify what needs to change. This involves reflecting on the state of the business, employee engagement, and what leadership changes are necessary to help staff reach their potential.

Asking staff for feedback is crucial. There are numerous techniques that can be used to reflect on the existing culture, such as employee surveys, focus groups and reviewing employee exit interviews.

In a toxic culture, employees are more likely to be cynical about attempts to make changes. Look for quick wins that can be implemented immediately. Even a small change could motivate people to start behaving differently and build momentum. To change your culture for the better, your people need to understand they are part of something bigger – something with purpose and clarity.

The culture that exists in your firm stems from its values, but many firms have not identified their values, or if they have, senior leaders often offer token acknowledgement of them. Law firm leaders need to lead by example – they must radiate positivity to the workforce and behave consistently with the firm’s values. When employees understand the firm's purpose and goals, they are more motivated to contribute to a positive culture.

Firm middle managers

Firm middle managers, typically heads of department in both client-facing and business support teams, are key gatekeepers and play a crucial role in ensuring a positive culture within a law firm.

The CMI/YouGov research found a consistent link between effective, highly trained managers and better-performing businesses with a positive culture. Each middle manager in a law firm influences a part of the firm, however small, and this is where they can directly impact change, which will ripple through the law firm, creating the momentum needed for change.

Ensure your middle managers are updated on initiatives and project progress, understanding the message you want them to communicate so they can share information with their teams. They should be championed, enabling them to show hesitant team members that their peers endorse the company's direction and leadership messages.

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It is vitally important to encourage a sense of ‘we are all in this together’ so that everyone in the firm, at all levels, understands and buys into the reasons behind the change and the process the organisation is undergoing.

The ‘Accidental Manager’

The CMI/YouGov research shows that businesses which invest in management and leadership development training see, on average, a 23 per cent increase in organisational performance and a 32 per cent increase in employee engagement and productivity as a result.

Despite the proven link between management training and improved performance, a central finding from the research is the UK's proliferation of untrained managers promoted into positions based on popularity, job performance, or availability.

The research reveals that 82 per cent of managers who enter management positions have not had any structured management and leadership training – they are ‘accidental managers’ – people who find themselves in the job but without the training to help them succeed.

According to the research, these “accidental managers” are often promoted for the wrong reasons, with nearly half of managers surveyed believing colleagues won promotions based on internal relationships and profile, rather than ability and performance.

In my experience, this situation is prevalent throughout many UK law firms where people are promoted to managerial positions but not given the necessary training to succeed.

Why does this matter? In the context of toxic cultures, managers with formal training are significantly more likely to call out bad behaviour or report concerns, or wrongdoing compared to those who have not undergone formal management training. They are therefore crucial in tackling the toxic culture that the SRA rightly identified as needing to change in some law firms.

A way forward

It is clear from the CMI/YouGov report that poor management continues to hinder the performance of UK businesses, including law firms. The toxic culture identified by the SRA in some law firms over two years ago undoubtedly persists, harming staff, clients, and firm performance.

Law firm leaders should invest in management training and make significant efforts to discover where knowledge and skill gaps exist and commit to raising skills. Effective management training equips your team to lead by example, inspire others, and improve workplaces.

As the CMI makes clear, management training is an insurance policy against a toxic workplace culture. But law firms should not solely consider this as a regulatory issue for the SRA – it is a business issue too that directly impacts the profitability and competitiveness of law firms and as such, should be at the forefront of all law firm owners' minds.