The hope is that ownership will give people a reason to stick around.
Anglo-Saxon economies have long struggled with what was modishly called ‘stakeholder’ capitalism in the 1990s. But the idea is regularly disinterred – more recently in the guise of the ‘John Lewis economy’. Perhaps proponents hope that basking in the reflected glory of our most celebrated department store will improve support for the notion.
The legal profession has good reason to consider this. The broad concept of employee-owned law firms (see feature) has found several expressions – from hybrid profit and bonus distribution schemes to more comprehensive equity allocation.
Why bother? Firms that have taken this route list compelling reasons why employee ownership could take off. The aim of changing the culture of a firm is one reason – shared rewards and a say in decisions improving the collective will help to push the firm forward.
Succession planning is another business driver. It is striking how often ‘millennial’ lawyers conform to stereotype, eschewing the old route to the top and the risks it entails. A less dramatic gap between equity partners and ‘the rest’ makes sense.
And then there is retention. Even in a buoyant economy, good fee-earners and support staff can be hard to find. The hope is that ‘ownership’ will give a broad range of people who contribute to a firm’s success reason to stay. All this has been said before in other contexts. But some of today’s best examples of the ‘John Lewis economy’ are law firms. Who says lawyers can’t innovate?