Ethical footprint

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Law firms may have lagged behind their clients int recognising the importance of corporate social responsibility, but that is changing fast. Philip Hoult reportsCorporate social responsibility (CSR) has a bewildering number of alternative labels  corporate responsibility, corporate accountability, corporate citizenship.

The lack of a generally accepted term is unhelpful but ultimately a distraction. What matters are the economic, environmental and social impacts of a business and how they are managed. As a result, CSR covers a huge range of issues, from governance to employment practices, from procurement to human rights.

In recent years it has increasingly become part of the mainstream of corporate life. As this has happened, the CSR side of law firms as businesses has moved up the management agenda.

Initially this was reactive. Major clients, during their procurement process, began demanding that firms demonstrate their commitment to individual aspects of CSR. In 2005, for example, as part of a panel review, Barclays asked firms to provide information on their diversity policies and statistics on the gender and ethnicity of their staff. Firms were also required to demonstrate how they tracked progress in these areas.

Employee pressure

The pressure from clients continues to grow. Steven Butts, corporate responsibility manager at Eversheds, says clients are asking increasingly searching questions on CSR in tender documentation, and drilling down into what a firm actually does. At one stage it was fine just to have a policy, he says. Now, it is about how you put that into practice.

Other stakeholders are also pushing. One thing that we hear time and again from law firms is that pressure is coming from new and potential employees, says Kate Walmsley, the Law Societys corporate responsibility co-ordinator. Theres a real desire to be associated with a firm with an ethical reputation. The question of work/life balance  a CSR issue of particular significance for lawyers  has also come to the fore in recent years.

These pressures have forced firms to take stock. Many are now taking a much more structured approach to CSR rather than simply responding to concerns as they arise.

One of the reasons for this is the belief that a commitment to CSR boosts performance and brings competitive advantage  doing well by doing good  although the academic research on this is divided. Improved performance is claimed to come through CSRs role in strengthening client relationships, ensuring the firm hires from the widest possible pool of talent, reducing attrition rates among existing employees and cutting environmental waste.

A typical way forward has been to adopt the model developed by Business in the Community (BITC), a movement of more than 800 businesses committed to improving their positive impact on society. This divides corporate responsibility into four categories: community, environment, marketplace and workplace.

Stand-alone CSR committees have emerged, while a few firms have appointed full-time managers to develop policies and co-ordinate programmes. The [managers] role is becoming more strategic  looking at how can we take good practice and develop the business in a positive way, says Butts.

Marcus Jamieson-Pond, CSR manager at Addleshaw Goddard, says one of the first tasks when the firm structured its programme was to ensure there was a top-level mandate. If you do not have that, people will just pay lip-service and nothing would get done, he says.

Communication has been vital to the programmes success, he adds. A key milestone was reached in May 2007 when a dedicated section of the firms website was launched. Up to that point, it felt like pushing a boulder uphill. The section includes news on CSR at the firm, details of events such as its second Big Week Out where more than 500 people (30% of the firm) have signed up to take part in community projects, and a blog.

It could be argued that law firms undertook most CSR activities already and this is just rebadging. But there are valid strategic reasons for adopting a more considered approach. It can, for example, demonstrate depth of commitment and ensure the effective use of resources. Another benefit for those firms that have grown rapidly, whether nationally or internationally, is that it can build cohesion across office networks.

Global framework

Elaine Radford, head of CSR for Europe and Asia at DLA Piper, says the firm has embedded a framework for its global CSR activities, which is flexible enough to take into account different needs in different countries. It also held a firm-wide charity walk in 2005 in which more than 1,000 people took part.

The real impact was seeing the buzz it created, she says, arguing that CSR activity adds significant value to team-building and creating a sense of being part of a global operation.

While large firms may be able to employ managers and devote greater resources, CSR is equally relevant to small and medium-sized practices. I believe very strongly that it is applicable to any business, says BITC account manager Emma Price-Thomas.

McMillan Williams, an eight-partner firm with offices in south London and Surrey, first put together a formal CSR policy six months ago. Its not difficult at all to get people involved, but there has to be an awareness and buy-in from partners so that they will offer people the opportunity to put the policy into practice, says Nicola Manning, a partner and the firms professional manager. Partners can be concerned that allowing people to take time out for CSR activities will affect the businesss performance.

An example of how its new policy has changed McMillan Williams approach is its decision to channel support for charities into areas related to its main business lines  personal injury, clinical negligence and family/children law. Progress has also been made on the environment and procurement. We have been raising awareness [internally] of the need to conserve energy, to recycle and use Fairtrade coffee and tea, Manning adds. You can make a small difference very quickly.

Fisher Jones Greenwood, a 14-partner firm in Colchester with a long tradition of pro bono work, is another smaller firm to have reviewed its CSR.

It makes you more focused and consistent with the work that you do, says senior partner Tony

Fisher. A proportion of clients, but not all, are responsive to the fact that they are buying services from a socially responsible organisation, he adds.

As more firms have strived to address their CSR, so there has been a growing realisation that, on their own, they do not possess all the answers.

One cross-industry initiative is the Legal Sector Alliance (LSA), a movement of 20 law firms and organisations committed to working collaboratively to take action on climate change. The LSA is developing a carbon footprint-measuring tool for the profession, recognising that many firms have not measured their footprint because they do not know where to start.

We knew that a lot of law firms had this on the agenda and realised that collaboration would give stronger outcomes than approaching it on an individual basis, says Radford of DLA Piper which, alongside the Law Society and BITC, was the driving force behind the alliances launch last year.

The LSA, of course, has an environmental focus. Whether there is scope for other industry-wide initiatives is being tentatively explored, with BITC recently holding round-tables with representatives from larger firms and the Law Society.

Having arguably taken up the mantra of CSR late in the day, how does the profession rate against other sectors?

According to Price Thomas, lawyers are ahead of the game in some respects. Law firms are incredibly strong on the community side, she says. They have such a culture of pro bono work. And in terms of community investment, the large firms are every bit as sophisticated as our other members.

Price Thomas says City firms are also advanced in their international approach to CSR. BITC runs Engage, an international campaign that seeks to increase employee community engagement, and a huge proportion of its participants are drawn from the profession.

Law firms attempts to tackle workplace issues such as diversity, and their initiatives to promote law as a career to young people from disadvantaged communities, are also seen as innovative.

Even where law firms have lagged behind, for example on the environment, they are catching up fast. At the recent May Day summit on climate change, the LSAs work was held up as a shining example of what can be achieved through collaboration.

One area where law firms are still feeling their way, Price Thomas says, is in their approach to the marketplace, but then thats a pretty new area for all of our members.

A thorny subject in this area surrounds whether firms should include ethical or moral considerations when deciding to accept instructions. This can have important consequences  in the past, some firms have suffered adverse media coverage because they advised clients on their activities in Burma. While Burma may be a fairly clear-cut case, where should firms draw the line? The traditional response from the legal profession has been that everyone deserves representation, but will some firms revisit that?

The regional perspective

There is a perception that CSR is only relevant to large firms, but that is wrong, says Hugh Welch, senior partner of Newcastle firm Robert Muckle.

Welch: north-east affinity

A cornerstone of Robert Muckles programme is its charitable trust, which is administered by the Community Foundation and makes grants to private individuals or specific projects. The foundation looks for good projects in our particular areas of interest, says Welch. We know that the projects will be well run and that the money will be used well.

The firms partners have donated more than £300,000 in cash since the trust was set up six years ago. However, the firms employees, not the partners, decide who the recipients of the funds should be.

Welch says Robert Muckles CSR programme pulls together a lot of the work it did already  such as pro bono legal work, volunteering for charities and not-for-profit organisations, and a programme of support

for the arts in the north-east  but brings greater focus.

The firm has introduced measures to reduce its environmental impact, including recycling, but Welch admits that it can be hard for lawyers. We try to print on double-sided paper, he says. [It is surprising but] not many law firms do that. The firm has also tried to make its new offices, which it moved into this month, as environmentally sustainable as possible.

Welch says much of the firms commitment stems from the fact that most of its partners were born and brought up in the north-east, and have a close affinity to the region. We feel very strongly that it would be morally wrong to try and be a successful business in isolation from the wider community.

Another important marketplace issue is how client demands affect law firm employees work/life balance. Partners are nervous about raising these kinds of issues, admits one CSR adviser. However, there is said to be growing recognition that the time for a mature discussion with clients has come.

Arguably, the legal professions greatest challenge regarding CSR is in reporting, measurement and auditing. According to research published by Deloitte in December 2007, some 80 FTSE-100 companies now issue CSR reports as part of their annual report and accounts  up from 56 five years ago. The number publishing stand-alone CSR reports also tripled during that time to 69, while those receiving independent third-party assurance doubled to 53.

Walmsley believes voluntary external verification and auditing is the likely logical progression, as it adds extra weight. However, one of the problems with that is there are different methods and no agreement about which is most suitable for law firms.

In 2006 Freshfields became the first law firm to publish a report following guidelines produced by the Amsterdam-based Global Reporting Initiative (GRI). That report, which covered 2004/5, largely focused on the London office. A second report covering 2006/7 addressed the firms CSR on a worldwide basis, and was also independently assessed by consultancy The Global Citizenship Company.

We decided to use the GRI guidelines as we wanted to ensure that we were very systematic in our approach, explains Bea Malleson, the firms head of CSR. We also wanted to use a recognised benchmark, something with international recognition.

She rejects the suggestion that the reports are window dressing, pointing out that the work involved is a major undertaking. The discipline of reporting captures a great deal of useful information that helps the firm better understand its internal and external relationships, Malleson adds.

The fact that the firm was prepared to include information that one of its partners agreed to receive a fine from the Solicitors Disciplinary Tribunal  to settle a case being brought by the Solicitors Regulation Authority over the acceptance of instructions to advise on a possible bid  would also suggest that the report is not simply a marketing tool.

Eversheds, meanwhile, is one of a handful of major firms to have chosen to adopt BITCs CR Index, a benchmarking mechanism. There was some initial concern, admits Butts, about how the firm would fare, as performance is compared to others in its sector and a table of the top 100 companies is published in The Sunday Times. In professional services, those that tend to score well are the big accounting firms that have been reporting this way for several years and are good at its process-driven methodology.

However, the real value of the index, Butts insists, is that it allows you to look at your scores year after year and use the management information to improve. Its like a health check, he says.

Whether one method will ultimately come to dominate remains to be seen, but Jamieson-Pond is one CSR specialist who would like to see a consensus emerge. What is really needed is more joined-up thinking to come up with a common language

and a common way of recording, he says.

In the meantime, champions of CSR among law firms believe it is here to stay, for one very good reason: One of the great advantages is that, no matter what you do, theres a benefit, says Jamieson-Pond. Theres always someone getting something out of it.

Philip Hoult is a freelance journalist

The regional perspective

There is a perception that CSR is only relevant to large firms, but that is wrong, says Hugh Welch, senior partner of Newcastle firm Robert Muckle.

The firms partners have donated more than £300,000 in cash since the trust was set up six years ago. However, the firms employees, not the partners, decide who the recipients of the funds should be.

for the arts in the north-east  but brings greater focus.