Firms 'putting profit over people' in battle to retain and develop staff

Large law firms' history of good financial performance has hidden their failure to invest in developing and managing talented lawyers, it was claimed last week.

Charlie Keeling, one-time global head of human resources at PwC Consulting, predicted that those firms which continue to ignore talent management may be swallowed by merger or acquisition as the scale of change in the legal profession increases.

Mr Keeling was addressing a seminar run by organisational consultancy Getfeedback in association with the Gazette, ahead of ground-breaking research Getfeedback is conducting into talent management and development in the legal profession.

Around 40 of the top 100 firms are set to be involved, including six of the top ten, which it is hoped will provide a benchmarking tool for bigger practices.

He said the legal market is changing as it continues to polarise between big and small - with regional firms in the middle seeking to develop into national practices.

There is also greater pressure on fees and, therefore, partner earnings, while more aggressive marketing means firms need to live up to the promises they make.

As the market becomes ever more competitive, 'a key issue, and differentiator, will be the ability to attract and retain top talent', he explained.

Mr Keeling highlighted a series of barriers to handling this change, including big firms not integrating the foreign practices they have bought, and the continuing priority of fee-earning and hourly billing over any organisational and individual development.

Partners continue to take most of the profits out of their firms as earnings, he added, without realising that they would earn more by investing in staff retention.

'It costs twice as much to acquire new talent as to keep what you already have,' he said.

Mr Keeling suggested a series of measures firms could take to retain lawyers, including: clear criteria for progression; building on people's strengths rather than trying to focus on those weaknesses they cannot or do not want to change; and feedback tools, including staff surveys, to measure behaviour as well as competency and drive the necessary culture change.

He added that this must all be linked into reward and recognition to ensure that people - especially partners - take it seriously.

Mr Keeling said that when he was at PwC Consulting, partners would suffer financially if they had a certain number of staff cancel places on training courses, while progression up the ranks was made dependent on running courses.

'The firms which develop and manage their talent best will be differentiated in the market place,' he concluded.

'Those that don't will be swallowed by merger or acquisition and some good firms and cultures will be lost.'

- To become involved in the research, contact Carrie Bedingfield at Getfeedback, tel: 01491 845525 or e-mail: carrie.bedingfield@getfeedback.net.

Neil Rose