Firms must deploy compliance strategies and tools to manage rainmaker colleagues, as Tracey Calvert explains
I remember the 1980s with great fondness. Shoulder pads, new romantics, Live Aid. I was there; I loved the TV. Who can forget Dallas and Dynasty, and most memorable of all – LA Law?
Didn’t everyone want to become a lawyer after they had tuned in each week to watch the antics of the attorneys at Los Angeles firm McKenzie, Brackman, Chaney and Kuzak? I certainly did.
At the time, one of the more loveable characters was Arnie Becker. Charismatic, charming, always getting into scrapes, but somehow surviving and doing the right thing by his clients.
If the 1980s wasn’t your decade, then think of any legal dramas you have watched, remember the most memorable characters – and you have your equivalent of Arnie.
Moving forward to the 21st century, and age and experience now tells me that Arnie, with his maverick qualities and quirky character, was a challenge to compliance practitioners. Would I choose to work with someone like that? Probably not. But actually, do we all find ourselves working with modern day Arnies? The answer is probably “yes”.
How would you describe the Arnies that we come across in 2020? They are often hailed as rainmakers bringing in new clients and new business; and often characterised by being unconventional. They ‘think outside the box’, sometimes independently from their colleagues.
They are often popular, seemingly extrovert personalities; the type of colleague who can be relied on to court and entertain clients and other individuals and entities which are useful to the business. Sometimes, these individuals are lateral hires targeted precisely because
they offer all these attributes to their new firm.
Of course, all law firms need these sorts of lawyers and being able to win clients and deliver high value services is commendable.
However, these individuals come with strings attached: compliance risk management concerns. So how do you manage the risks; and what’s the cost of not exerting effective compliance measures over these colleagues?
Many disciplinary decisions reveal dramatic falls from grace for such individuals; and repercussions for the firms associated with them.
With the Solicitors Regulation Authority (SRA) Standards and Regulations (STARs), it seems likely that the theme of star lawyers making wrong choices, and the consequences for their employers, will continue to be some- thing we read about in the legal press.
In other words, the employment of a rainmaker (all the Arnies we meet) must be effectively managed by the business employing them. If it is not, the very characteristics which were once regarded as business assets will quickly be seen as behaviours which com- promise the business’s survival.
To successfully manage this type of col- league, the starting point must be the clarity of the message delivered: that no one in the firm can plough their own path and make their own decisions when it comes to compliance.
Put starkly, however good a rainmaker you are, no behaviour can be justified if it means the firm’s values and ethos are undermined, and its regulatory status jeopardised. This message will be supported by a working environment or compliance culture where policies, controls and procedures are designed to support risk management and the delivery of ethical legal services; and these must be monitored consistently.
This isn’t a new message and it’s how a modern law firm should be run. It is what the SRA expects to see (just look at the copious standards in section 2 of the SRA Code of Conduct for Firms). The trick is to make sure the standards are applied to all colleagues.
Undoubtedly, it will be less challenging to deliver this message to some colleagues than others. Unqualified or less experienced colleagues are often likely to receive the compliance messages in the most receptive and positive way, assuming that the method of communication is effective.
Sometimes, more experienced colleagues aren’t so receptive. It would be tempting not to bother with the rainmakers; perhaps being swayed by arguments that because of their value to the firm, they should be treated differently – maybe just on the basis that it is too difficult to manage their understanding of why compliance matters. Ignore them at your peril.
Compliance strategies and tools which will respond to the need to manage your rainmaker colleagues include the following:
- Ensuring the correct attitude to regulation, compliance and ethics is displayed by senior firm members. We now have a standard in the code for firms which talks exclusively to the owners of the business, making it clear they are responsible for their firm’s compliance with the code; and that the responsibility is joint and several.
- To deploy an overused phrase, it’s all about the appropriate tone from the top. Non- compliance will not be tolerated.
- Effective management of the risks of running the practice which takes into account the risky attributes of all colleagues. It is natural to consider that risk is concentrated at the bottom of the chain and more likely to arise in the lower orders. How- ever, your risk evaluation should assess all individuals including the more confident and senior lawyers. They also carry risk (as is apparent from the number of regulatory decisions against experienced lawyers).
- Having a business strategy which is not overly dependent on a few individuals and the clients they attract, and their billable hours. The more a firm depends on a lawyer and what they deliver, the more tempting it might be to bend the rules for them or turn a blind eye to their out-of- kilter behaviours.
- Being mindful of reward systems that overly incentivise behaviour that produces clients and billable hours. If your firm’s culture it to reward this form of success to excess, there might be a compliance price to pay.
- Individual and firmwide demonstration of effective supervision. Supervision should be applied to everyone including those who are regarded as rainmakers. The key is to fine tune supervisory relationships in a proportionate way so that no one is left without appropriate oversight.
- Focus on individual competence levels with the necessary understanding that competency extends beyond legal ser- vices to areas such as professional judgement. It’s risky to assume that because someone is clever, or a good lawyer with a good following, this means they know everything that’s necessary to make them a competent lawyer. A lateral hire might make perfect business sense, but that in itself does not mean that assessment of their other qualities, or lack of them, can be put to one side.
- Intelligence derived from monitoring people and policies to identify the non- conformists. Make it clear that non-compliance is always identified and will not be tolerated.
- Deliver the ethics messages loud and clear. The STARs have repositioned individual ethical behaviour at the heart of the compliance systems the regulator expects to see, so we are expected to ensure that ethics can thrive in our workplace. Don’t disregard the value of training (refresher or otherwise) to support ethical behaviour.
- Encourage and enable everyone to challenge inappropriate behaviour in the workplace. The SRA expects everyone it directly or indirectly regulates to play their proportionate role in risk management and the delivery of ethical legal services. Delivering these messages to all colleagues and providing them with safe harbours through which they can voice concerns is necessary.
The STARs make clear that we’re expected to manage the risks which come from all people in the firm. This framework supports the compliance culture and will tease out the behaviours that threaten an individual’s and the firm’s relationship with the SRA.
Tracey Calvert is a consultant at Oakalls Consultancy Ltd oakallsconsultancy.co.uk