Managing an entitlement culture

Politicians have been highlighting lately the prevalence of a culture of entitlement in society, under which people feel that it is their right to receive state benefits and support. There is a different sort of entitlement culture present in many professional services firms (PSFs) today. This culture takes a number of alternative but overlapping forms.

Very commonly, there is an older set of partners who feel that they have the right to continue to receive the level of income that they have enjoyed over the past few years. Having worked hard for all of their careers, they often feel that they deserve to be protected and looked after by the younger generation of partners, even after they have stopped pulling their weight.

Conversely, at the other end of the spectrum, junior partners often feel aggrieved that they have for long years contributed ‘sweat equity’ by working hard at rates that do not reflect their contribution. In their case, they are impatient for an earlier and greater share of the financial cake than the firm is ready to give them.

Then there is the governance aspect of entitlement. Backbench partners sometimes feel that their equity stake gives them the right to be consulted on every decision – not least any investment decisions that might affect their pockets.

A sense of entitlement can also inhibit appropriate performance management measures – some partners still feel a ‘partnership for life’ prerogative, which makes them feel exempt from performance management. More extremely, a few partners still feel that, as owners of the business, there are no rules that they need to obey, particularly those enforced by an externally-appointed professional manager.

Managing culture

Core cultural types in PSFs often compete with (or oppose) each other – flexibility versus stability, collaboration versus competition, control versus autonomy and conformity versus entrepreneurship. The key is to promote a positive environment in which opposing cultural forces can be maintained in balance or creative tension. Hence, a culture of entitlement can be harnessed for success when it carries with it a sense of ownership, teamwork and collegiality that enables the firm to progress.

A culture of entitlement in professional service firms should therefore be managed rather than eradicated. There is a contrast here with very large firms, in many of which the culture of personal entitlement has all but disappeared – where partners often feel that they have become little better than short-term workers with little or no rights or employment protection.

Managing culture is a difficult task and culture tends to manage the firm rather than the other way round. It is very hard to get structural change to alter organisational culture – culture will trump structure every time. Attitudes, however, do affect behaviours, and there are a number of steps that can be taken to get partners in the right frame of mind to not take undue advantage of any sense of entitlement that they will continue to feel.

The first step is to ensure the firm retains an appropriate element of democracy. Partners cannot expect to vote on everything, but there should be discussion both as to the issues over which partners have a vote and the extent of the powers and authority of the firm’s leadership group. This group must have enough power to manage, but not sufficient to put partners totally at its mercy. An important element here is to establish a fair system of partnership reward that is supported by most partners.

The second step it to establish or develop the right degree of entrepreneurship in partners – the motivation to seek new challenges, learn new skills and maintain the highest adherence to professional standards. Structurally, this can be achieved at least in part by partner development strategies that promote better competencies.

Thirdly and similarly, firm leaders should try to develop the right autonomy balance between heterogeneous partner independence on the one hand and the homogenous development of the firm as an institution, relying on joint actions, teamwork and collegiality. A way of achieving this balance is to get partners focused on client-winning and retention strategies that can only be carried through in teams and groups.

The final (and hardest) step is to try to get partners to respect the firm’s management group and its decision making and to refrain from second guessing or undermining decisions that are made. This is difficult because partners tend to be a distrustful bunch and because the entitlement culture leads partners to think more about how decisions might affect them personally rather than the firm.

The passage of time of course helps a newly-appointed manager or management team to gain credibility and respect. However, the best short-term way of achieving this balance is often to dramatically increase the level of communication (even perhaps to the level of over-communication) between the leadership team and the partners.
Partners do have rights and must have a fair portfolio of prerogatives. But trouble comes when the predominant culture is one where personal entitlements prevent the development and momentum of the firm.

??Nick Jarrett-Kerr advises law firms worldwide on strategy, governance and leadership development (www.jarrett-kerr.com)