Graham Jarvis offers his advice on how best to respond to a recession.

When the words 'recession' and 'downturn' become the talk of the town, firms understandably look for ways to save money. This entails downsizing, and rationalising a firm's resources and assets. Budgets are slashed for short-term gains as a perceived means of survival and this often leads to staff being made redundant. Marketing and other types of client-facing personnel and staff training budgets don't escape this impulsive tendency to press the eject button. But hang on, surely people are a law firm's biggest and most important asset for delivering effective client strategies.  

The worst thing
Downsizing is often the worst thing you can do when times get financially tough. Even so Jeremy Knott, marketing and client service director at CMS Cameron McKenna, says that some law firms are already cutting back on lawyers and client support staff. While redundancies might save them money in the short-term, cost-cutting measures like this are bound to have a negative effect on their ability to deliver effective client strategies; to fulfil client needs and expectations through the provision of their services. The outcome can be like cutting off the leg of an élite Olympic sprinter, reducing performance as experienced staff and knowledge are lost.
This situation can also be caused by the stress factor. Remaining personnel become lumbered with the work of their colleagues who've lost their jobs. The sight of empty desks can lead to concerns about being next in the firing line, and the extra workload can lead to resignations. The pressure becomes too much, particularly as the expectations of managers and clients rarely adjust to the new scenario. Something has to give, and it often leads to a deterioration of client service in all of its guises. It all increases the costly impact of the skills and brain-drain.
Redundancies and resignations lead to missed opportunities, enabling competitors to gain a competitive advantage by hiring those that have had to leave, or those that decide to move on for whatever reason '“ for example, to seek new challenges and opportunities. Most people would expect the poor performers to move on first, but this is often not the case. 'Staff with many years of experience are seen as an expensive resource so they are more likely to be tempted to go due to the size of the redundancy package,' says John Curtis '“ managing director of people and leadership consultancy MC².
Companies then typically begin a recruitment drive when better times arrive, which costs more in terms of time and money than if they had retained and trained or re-trained their staff '“ no matter what the non-disciplinary circumstances were of their departure. Furthermore, sometimes the more experienced members of staff are replaced with younger recruits who don't have the same level of client knowledge and relationship-management experience. Their departure can disrupt long built-up client relationships, which then have to be rebuilt with the newly recruited members of staff.

Staff are crucial
'People are invaluable,' says Chris Newton, a dispute resolution partner at UK law firm Berwins Solicitors. 'Staff are crucial for business development, and in a legal practice if you don't have enough personnel you might not be able to service the work.' He recognises, like many of those interviewed for this article, that a downturn represents a difficult balancing act. But the firms that invest in training are also seen, explains Curtis, as being the 'more positive organisations that people want to work for and be associated with'.
'If anything you need more not less training in difficult times,' says Knott. He explains that the emphasis changes to business and financial management skills. 'We need more investment in training because it's a tougher market, and people need to be more focused on client relationship management, financial and business management.'
More training emanates from a need for an increased level of marketing activity. In a narrowing market it is harder to gain a bigger slice of the cake. It is harder to compete too if the right personnel and staffing levels are not in place to do the job effectively. By retaining them it is possible for a law firm to gain a competitive advantage and emerge from a downturn with an increase in market share. This is attained by investing in marketing and personnel development, particularly as client service increasingly becomes a key differentiator in a more challenging business climate.
This is important, says Curtis, because '80 per cent of customers are prepared to move to get better service, so a downturn is a time to invest in your people.'
Professor Lynette Ryalls, director of the Key Account Management Best Practice Research Club of Cranfield School of Management, agrees. The trouble is that 'good client managers are in such short supply in the legal profession that some law firms have been 'buying in' non-lawyers to become client managers,' she says. This trend would have been unheard of a year ago. 
Considering these factors one would expect organisations, including law firms, to consider the detrimental effects of letting their staff go, the impact on their practice's competitiveness, and its ability to perform and deliver its client-facing services. But people aren't given any kind of priority when this kind of decision is made. There's a negative assumption made about personnel, which doesn't always reflect operational realities. The balance sheet becomes king, rather than the firm's ability to gain profitability through higher quality levels of client service.
So when budgets are cut, little or no thought is given to how re-assigning individuals to new roles and training or re-training them, could improve business performance. Staff retention and training can create a potentially greater return on investment than any kind of turnover of staff, while increasing a firm's competiveness. Nurtured staff will reward managers too. 'You will get more effort out of your staff, better results, more commitment, happier clients and greater profitability,' says Newton. Such a strategy could prove less costly than the redundancy option. Knott illustrates this point when he says that staff retention and training saves his firm up to 20 per cent of his staff-related costs. 'When people have been in the business for a long time they know how to get things done,' he says. 'But it can take six months for someone coming from outside to get used to the business, add value, and become a trusted advisor. A lost year plus the cost of recruiting someone'¦ you can see how it adds up.'

Prioritise training and appraisals
So why do managers either ignore staff development or give it a low priority when it clearly makes financial and commercial sense to invest in their people? This includes allocating very little time to multi-source and one-to-one feedback sessions. Curtis believes that it is because managers themselves receive little training, and are not measured. This means staff assessment, development and reviews become a very low priority, so managers either don't know or fully comprehend the benefits of regularly reviewing and monitoring the performance of their staff, with respect to the organisation, teams and individual staff members.
'Managers believe that by focusing on the business targets, it will be better for them individually, attracting larger bonuses, but they then struggle as their staff feel undervalued and not coached and encouraged to achieve more,' he says. With this focus in mind they begrudge multi-source feedback, which is often just seen as a chance for staff to have a moan. This is why staff appraisals and feedback sessions are often avoided. Others, however, feel that there is more to it than this, pointing out that managers are under a lot of pressure and they are therefore busy doing other important types of work. Robert Crawford, director at the UK Institute of Customer Services, feels that it is also down to managers not being convinced that investment in staff development will lead to money being recouped. The best way to assess whether training is going to deliver a return on investment is not to listen to the training companies who say that if you spend £1m you will get £1m back, but to begin an assessment of your clients which ascertains what is important to each individual client? This provides a basis for identifying where any strengths and weaknesses lie in the service-delivery process. And by gaining such insight on a regular basis, it's possible to feed this back into the staff development programme. Where there are noticeable weaknesses, training and mentoring might be required and through this it is possible to analyse the potential payback for the law firm.
'One-to-one sessions with staff have now become institutionalised', according to Graham Clark of the Cranfield School of Management. They are often being conducted every three to six months, which creates a substantial amount for work for the manager but can easily be avoided with the appropriate training, and preparation for the meeting. One-to-one sessions, although invaluable, could create a bottleneck if done too regularly. And, as Clark explains, no results will be gained by overloading managers. 'First, line managers should be given more freedom to monitor staff performance,' he says. He also suggests that there should be more emphasis on coaching and mentoring than disciplinary action. But to do this there may need to be more managers and team leaders. 'It's about people following process and committing to the process. The less the engagement, the poorer the service,' he says. This suggests that appraisals should be conducted as regularly as possible, but 'they need all the tools they can get to manage people properly', says Professor Merlin Stone, research director for UK consultancy White Consultants Ltd.

Embrace staff as individuals
From his experience with MC², Curtis says he has noticed that managers consider all staff as a collective resource rather than as individuals. Crawford thinks it is an interesting observation. 'I guess it's because managers make the mistake of having a helicopter view, and so they think of staff as a collective,' he says. The danger here is that they can miss the good things that individuals bring to the table. But Newton highlights an important point too: 'It depends on the role, because if it requires a person to work in a team you can only cope with a certain amount of individuality.' In effect people need to be able to work autonomously as well as part of a collaborative team.
Typically, firms like to hire extroverted people with good communication skills. But Newton believes firms can benefit from working with quieter people '“ ones who don't just know how to talk but also how to listen to clients and other colleagues. 'Sometimes managers want the extrovert, the person who is a bit louder, but they might not be the one to deal with the customers because they might talk over them all of the time,' he says. In such cases, appraisals can be used to find out where a more introverted type of person fits best into the organisation and to encapsulate his or her competencies '“ where they help to increase performance of the organisations.
It is important to make a correlation between what is strategic and what is tactical. That means that managers need to comprehend the impact of their day-to-day tactics and overall strategies. If managers within the legal and other professions don't understand this then they get what they deserve. This includes realising what can be gained from personnel training and development. A compromise nevertheless has to be struck between consistency on one hand (which can be gained by having a team structure, for example), and a prerequisite for effective client-employee engagement on the other as clients want to be treated as individuals.
The world is crying out for more individuality, says Clark, and from that employees can empathise more with clients. Teams shouldn't work in a way where individuality is subsumed, but embraced when it adds a positive contribution to the overall effort to deliver client strategies effectively. It's a sign of a weak manager if the team is used as a heavy mallet. Individuals can, for example, contribute ideas that enable the organisation to deliver better client service by providing feedback on his or her everyday tasks and the processes and workflows involved to achieve them.

Time-resource management
Managers should give their biggest resources more time, because those that do are seen as being above the rest and staff are also likely to respond kindly to it. 'People identify with managers who invest time in their people. They want to belong, be accepted and valued,' says Curtis. His experience suggests that people tend to work more for their managers than for their organisations. 'The trouble is that organisations undervalue good people managers, because they are seen as a threat by more senior executives,' he adds.
It is also important that managers 'focus on a few things and invest where they can get the best returns', says Knott. 'That could be people, systems, actions and planning.' He recommends that time should be spent planning as it can 'bring big dividends in the form of business results'. This involves analysing how well the law firm knows particular clients and how the company is going to make individuals responsible for building relationships in other areas of that client's business.

Not working? Fix it!
It's obvious isn't it? When there is a staff performance-related problem it needs fixing. Managers often prefer to sweep problematic issues under the carpet because they don't want to be held accountable for them. But if a photocopier broke down and it was urgently needed to make copies of some casework, it would be fixed without any qualms. The same would apply to a member of staff's computer should that stop operating efficiently, because without it that person's efficiency levels would drop. So why aren't staff-related issues dealt with in the same fashion?
Curtis says it's because people like to pass the buck and claim that it is someone else's fault. The recruitment process or training is blamed, leading to the issue being assigned to the 'too difficult pile'. Managers tend to work around the problem rather than fix it, and if the underperforming staff don't respond 'a long disciplinary process takes place, which is time consuming, and demotivating even for those who are not involved'.
To get the performance needed it is best to organise some regular meetings with those concerned, and be honest when poor performers don't respond. But if someone is not performing to their full potential, or behaving badly, it's important to ask why. There may be a number of causes involved. With training and mentoring it's possible to get a grip on them. Training should also focus on making a company's best staff even better, because without good staff you can't have an effective client strategy.

In summary
The current uncertain economic climate may have many predicting the worst for companies, firms and multinationals the world over but it is possible and, indeed, comparatively easy to implement the necessary client-focused strategies and staff engaging processes which will enable your organisation to flourish while others flounder.

Graham Jarvis is a marketing and business journalist and former editor of The Marketing Leaders. He can be contacted at info@mc2.gb.com.