Learning curve: How UK law firms are preparing for the CPD changes

The SRA's CPD changes are creating big challenges for law firms in the UK, reports Manju Manglani

The Solicitors Regulation Authority's controversial changes to continuing professional development (CPD)
are creating big challenges for law firms
in the UK. For most, it is at the top of
their HR strategic agenda, overtaking
talent retention and succession planning,
a snapshot Managing Partner survey
has found.

Under the regulatory changes, solicitors will need to self-declare that they "have considered their training needs and taken measures to maintain their competence".¹ They will need to take ownership of their professional development in all its forms - including reflection - and spend as much time as they feel is appropriate to ensure their competence. For those firms which have seen CPD compliance as purely a tick-box exercise, the SRA's new approach is creating a range of challenges.

Respondents said that getting lawyers to self-direct their learning and development (L&D) is the biggest talent management challenge facing their firms today. Other, related, challenges include providing lawyers with targeted L&D opportunities and getting fee earners to reflect on their practice. Nearly a third said that greater need for outcomes-based and customised L&D will have a big impact on their firm in the next 12 months.

Despite the challenges, many firms are embracing the opportunity to opt-in early
to the new CPD regime, which becomes fully effective on 1 November 2016.

An SRA webinar on the new approach attracted nearly 1,000 registered viewers
on 1 April 2015, among which more than 200 said they would be adopting it early.

Similarly, Managing Partner's survey found that two thirds are either considering or planning to be early adopters; a fifth confirmed they would be opting in early and 45 per cent said they are considering it.

In preparation for the upcoming changes and to ensure their systems and approaches are up to date, many respondents said their firms will be investing in L&D resources and HR technology in the coming year. More than half (56 per cent) plan to invest in new L&D resources, while a further 21 per cent are considering it. In addition, more than two thirds are either considering (37 per cent)
or planning to (31 per cent) invest in new HR technology in the next 12 months.

The main source of training for lawyers will be specialist training providers (88 per cent). Partners and digital training providers will also be used in roughly three-fifths of firms, with L&D staff (41 per cent) and HR staff (29 per cent) ranking lower. Universities and colleges come in last,
at 21 per cent.

When asked who they think should be providing training for their firms' lawyers, the majority seemed to agree with their firms' decisions. They ranked all sources in almost the same manner, with the only key difference being universities and colleges (34 per cent) ranking penultimate and
HR staff ranking last (24 per cent).

Unsurprisingly, new CPD systems are the number one type of HR technology which firms plan to invest in over the next 12 months. This is followed by digital training, videoconferencing, and salary/payroll systems. Also featuring high on
the list of investment priorities are performance dashboards and intranets.

While the new approach to CPD
is creating a wave of issues for firms
to address, many are unconvinced that
it will help to move legal practice forward. The majority (58 per cent) said they expect the new CPD regime to have a moderate impact on the way that solicitors practise law in future, while five per cent said it will have a high impact.

Similar to responses to our August 2014 survey on the CPD changes, concerns were raised about the impact of the new regime on the quality of L&D that solicitors will receive.² Fears prevail that law firms will view the self-declared competence approach to CPD as a cost-cutting opportunity.

"Tailored development rather than
box ticking should help the profession.
For firms committed to L&D, it should have
little impact. However, there may be a temptation for some firms to cut back on formal training," warned an L&D consultant at a global law firm.

Agreed a partner at a regional UK
law firm: "It could cause a significant
drop in standards."

Of the 15 per cent of respondents who said their firm did not plan to invest in new L&D resources in the coming year, nearly two thirds said this is because the current level of resources are considered adequate. A quarter said new L&D resources are not considered a priority, while 13 per cent
said it was due to budget cuts.

"Lawyers need continuing legal education that is intellectually interesting, relevant and of high quality," said Mark Solon, solicitor and managing director of Wilmington Legal, which publishes Managing Partner.

"The days of long hours in hotels
to clock up hours or watching dull
webinars are over. The new environment allows for CPD to move to the digital age with all the options now available. We are launching some really exciting new ways of learning to assist the early adopters of continuing competence."

Challenges and trends

The CPD changes are not the only talent management challenges facing law firms today. The second-biggest challenge highlighted by respondents is creating a strong firmwide culture with shared values (46 per cent). Tied into that are the issues of improving cross-selling across teams, departments and offices (39 per cent), improving partners' supervision of junior lawyers (37 per cent) and ensuring firmwide knowledge-sharing (29 per cent).

In last year's survey, recruitment and retention was highlighted as the biggest challenge facing law firms. Respondents said greater competition for legal talent would have the biggest impact on law firms which, in turn was stimulating the trend of rising legal salaries.

This year, those issues were overtaken by the CPD changes and the embedding of culture and values - recruitment of new associates and partners (41 per cent) ranked fourth in the list of current challenges. A third of respondents also highlighted the retention issues of providing competitive salaries and developing reward strategies that both fulfil individual motivations and meet business needs.

However, when asked which talent management trends will have the biggest impact on their firm in the next 12 months, respondents ranked greater competition for legal talent and rising legal salaries as joint first (49 per cent). In second place is increased demand for flexible working opportunities (37 per cent).

As part of their efforts to attract and retain the best legal talent, nearly three-fifths of firms are either planning (23 per cent) or considering (36 per cent) changing their remuneration and reward strategy in the coming year. These changes include introducing a firmwide profit-sharing plan and giving non-fee earners bonuses. More than a quarter of respondents will also be changing their remuneration and reward systems in the next 12 months.

Among the other trending issues affecting law firms in the coming year are changes to partnership structures and agreements (32 per cent) and the retirement of the firm's most experienced partners
(24 per cent), highlighting the need for effective succession planning.

Long-term issues

Respondents were asked to comment on how law firms will need to change the way they manage legal talent over the next three to five years. Many highlighted the need for a greater focus on retention, with competition for specialist talent on the rise. A key aspect of this is more varied career options and flexible working arrangements.

Law firms need to make talent management "a higher priority, think flexibly and not apply a 'one-size-fits-all' approach," said the COO of a national firm.

Echoed the head of HR at a global firm: "Develop a more flexible approach to career management and flexible working."

Firms "need to be more open to flexible working," agreed the head of recruitment at an international firm. "The old partnership structure/ethos is difficult to reconcile with 21st century working practices - not all lawyers desperately want to be partners and this should be recognised by offering alternative career paths."

Added a partner at a regional firm: "Be more open and honest with all staff, with clearly-defined career paths that may not end in partnership but rather in other, equally valid and rewarding, careers."

Part of this involves having "better and more open conversations and asking questions about what they want," commented a partner at a local firm.

Firms will need to provide talented lawyers with "a range of interesting work
as more is driven by processes," commented the head of L&D at an international law firm.

Agreed the HR director of a national firm: "Optimise the skills and utilisation dictated by fixed-fee deals and cost pressures from clients, whilst still providing interesting and demanding work."

Firms will also need to help lawyers to have "greater commercial awareness, providing non-legal value to client services," said a practice head at a national firm.

"Most lawyers have no business acumen and don't really understand a corporate structure," commented a managing partner at a regional firm.

In addition, firms will need to create "meaningful succession and progression plans" with "integration of systems and processes across the firm", said the head
of L&D at an international law firm.

Greater knowledge pooling and sharing will be required. "We need to encourage lawyers to help develop standard computer-based firm documents and to share their knowledge developed in practice to improve the firm's collective documents and knowledge," said a partner at a local firm.

"Recognise that all staff together are the firm's greatest asset and develop proper structures for getting full potential out of every one of them, with particular emphasis on giving responsibility," concluded a practice group head at a local firm.

Warned a partner at a regional firm: "Ignore talent management at your peril!"

Survey respondents

Managing Partner's snapshot talent management survey was conducted between 9 March and 15 April 2015.

Eighty-five per cent of respondents said they are based in the UK and six per cent are based in the USA. A third are at international firms and a fifth are at national firms; the remainder are almost evenly
split between regional and local firms.

Nearly three quarters of the 52 respondents said they are actively involved in developing their firm's HR strategy, and 60 per cent said they are a member of their firm's senior management committee.

Manju Manglani is editor of Managing Partner (www.managingpartner.com)

References

1. See 'LSB approves SRA's CPD changes', Manju Manglani, Managing Partner, 11 February 2015

2. See 'Exclusive: Lawyers to spend less time on L&D under new CPD regime', Manju Manglani, Managing Partner,
   Vol. 17 Issue 1, September 2014