How to reap ethical dividends
Gideon Habel outlines the ethical considerations as firms look at longer term changes
Alongside social distancing and lockdown, one of the terms that has become ubiquitous in these strangest of times is the concept of the new normal. Many of us have are now used to the working challenges presented by lockdown: learning to use new technologies, balancing work around home schooling and dealing with the challenges of changing procedures. In some cases, this has accelerated ongoing moves to more agile, paperless working, but the speed at which these changes have been forced upon the profession has been – to employ another presently overused term – unprecedented.
As I write this piece in May, talk about easing the lockdown abounds. But although there is more of an idea of what the next steps of easing the lockdown might look like, these are all conditional measures depending on the further spread of the virus. There is a sense we might soon be moving from the exceptional situation of lockdown towards the new normal.
It gives an opportunity to reflect on some of the ethical issues that the covid-19 pandemic has raised for law firms; and to look ahead to what long-term changes we may (and should) see in the legal sector. Perhaps the most significant ethical issue that firms have had to face is how to prioritise the interests of partners, clients and other stakeholders – particularly their employees.
The key debate has, perhaps unsurprisingly, revolved around firms’ finances, in particular the ethics of cutting staff pay, reducing working hours and using the government’s furlough scheme. Firms have had to make difficult decisions as they try to ensure that their (metaphorical) doors stay open during lockdown and beyond: protecting the firm’s bottom line is clearly part of this consideration.
However, there is a risk of perception that some firms may be using these measures to protect partners’ profits at the expense of the taxpayer or more junior staff. With reductions in new file openings and cash flow difficulties, these measures may well be necessary, even for big firms.
But firms that have engaged transparently with staff and have sought to explain the impact of their strategies on employees at all levels might well see an ‘ethical dividend’ in the months and years to come, in terms of both staff commitment and external reputation. Ethical management of finances is thus closely linked to the ethical management of your people (a theme I return to below).
The financial squeeze created by the pandemic will no doubt affect some firms more than others. Some areas of practice are facing a decline that could continue far beyond the end of lockdown. Even where firms see a surge in enquiries as a result of the pandemic, the profession as a whole may face increased costs in the medium term such as higher insurance premiums; as well as the financial effects of longer timeframes for matters as courts work through backlogs.
While some small firms have adapted well to the challenges posed by the pandemic due to their smaller, more agile workforces, they may find themselves significantly affected by increased costs. With so much at stake, firms should take stock and think about the best – and safest – way to respond to new and different pressures and opportunities, both now and longer term. Some firms might alight on a plan to redeploy staff with lighter workloads or consider branching out into a new area of work.
Firms will need to think carefully about the regulatory risks of doing so, particularly keeping in mind capacity and competencies. The implications for training and supervision will need to be considered, as will the need to inform professional indemnity insurers. With the situation rapidly evolving, firms should make such reviews a regular part of their strategy to make sure they are not missing novel risks or opportunities.
As financial uncertainty seems set to persist, it’s no surprise that firms are considering making some aspects of changed working practices more permanent to minimise rental costs and overheads. This should also form part of a wider process of adaptation where firms evaluate new practices, differentiating those which have helped to improve efficiency and can be refined or retained, from those which should be discontinued as we emerge from the crisis.
But adjusting to a new normal – and the sigh of relief once adjustment has been successfully negotiated – should not mean relaxing our vigilance. Many firms have approached the regulatory challenge of promoting remote working and using digital technologies with zeal. This should be continued into the next phase, whatever that may look like.
Different regulatory risks are posed by different ways of working – for example, with remote working, the risk of physical documents being lost, stolen or leaked to the public is lower, but the risk of online data breaches has gone up – and firms need to ensure their compliance systems remain fit for purpose and their staff adequately trained.
Much like reviewing risks and opportunities, this should be an ongoing process. And we all need to engage in a wider debate around what constitutes best practice in the post-covid-19 era. Part of this effort will be in making sure ethical management practices continue beyond the current crisis. In many firms, there will be examples to celebrate: managers who have stepped up to the current challenge, showing leadership, promoting transparent lines of communication and supporting their staff.
Firms should ensure such behaviour is encouraged even after the eventual end to restrictions. Such practices certainly take more time, but will pay back in spades. Particularly, those firms that embrace homeworking moving forwards should consider how to retain sufficient supervision of staff and how best to communicate with staff on firmwide, departmental, team and individual levels to ensure people remain engaged, accountable and clear about their responsibilities.
Mistakes will continue to happen, but often it is how they are subsequently handled where things can go wrong, even more so when you are managing from afar. Beyond that, ethical management also means putting the welfare of your people at the forefront of your decision-making. We’ve all had to adapt and be flexible in this difficult period, empowering people to fit their work schedules around caring responsibilities and checking in on a regular basis to make sure people are mentally and physically well.
Some of us have been working in less than ideal conditions – at kitchen tables, in bedrooms, with children and other family members needing our attention – and this has also made it harder to separate work life from home life. Some of us may feel we have gained back time usually spent sat on trains, ironing shirts or making ourselves presentable for the office, but it is important to find new ways to differentiate time at work from time at home and make sure you are switching off.
This goes for partners too – leaders should be checking in on each other as well as their teams. When the restrictions finally ease, some of us will rush back to our offices with a sigh of relief, while others may not feel able to. This may be because they are vulnerable or living with vulnerable people, have children unable to go back to school, or they may just feel anxious about the risks of returning to work.
One of the major challenges will be how to manage different modes of working without discrimination to make sure all your people can continue to provide the best service while looking after the physical and mental health of themselves and their families.
The sweeping changes brought in by the pandemic offer an opportunity for firms to change and improve their working culture, embedding ethics more centrally in their approach. It’s an opportunity we must all grasp, putting us in good stead for the new normal – whatever it looks like.
Gideon Habel is a partner at Leigh Day leighday.co.uk