Leaders must have slimline tonic

With firms ensnared in the salary war, Peter Scott calls for decisive leadership to keep quality staff and to tackle underperforming partnersAt the beginning of the year, I wrote a Comment column for the Gazette, urging law firms to take necessary action to make themselves competitive in readiness for when times may not be so good (see [2001] Gazette, 11 January, 14).Since then, many solicitors have told me that the article had touched a raw nerve in their own firms, and spoke of their determination to address the issues raised.

Some of the dilemmas facing law firm managements are pressing.The focus has been on the high salaries of newly qualified solicitors, which have a knock-on effect upwards throughout the ranks of the profession.

These concerns have sent depression-inducing shivers through many law firms, particularly in London, though not exclusively.The effect filters out to firms in the larger regional cities, which are competing directly in the labour market with the US and magic- circle firms in the City that are driving the salary war.The moment of reality is fast approaching for many law firms.

Those practices that are driving the process can afford to pay top money because they can provide a stream of quality work to their lawyers, which means they can record and recover at top hourly rates.

Typically, they could be charging 2,000 hours and more per year, which produces high profits for firms in that fortunate position.The reality is that the vast majority of firms in this country is not in that league.

Those practices need to consider whether, and if so how, they compete in the same labour pool with the richer counterparts.

One thing is clear many cannot compete on any straight financial basis and need to consider other ways to attract and retain good staff and partners.There are firms which, while they subscribe strongly to the hard work ethic, have developed working environments that attract and retain excellent staff.

They pay good salaries, but are not sweat-shops and do not treat their staff as cannon-fodder.

Above all, they take pains to make staff feel appreciated.Take, for example, that large pool of under-used talent women lawyers who stopped work to have children.

If they wish to return to work part-time, they quickly discover there are few firms that have working practices which permit or are conducive to this.

Those firms which have made the effort to employ this otherwise wasted resource are rewarded with a degree of staff loyalty and productivity that can make all the difference to a business.Part of the process of creating that acceptable environment is for management to ensure that staff have respect for the partners in the firm.

Forget formal appraisals ask the assistants for their views on the partners and you soon get an objective picture of a firm.

If assistants do not respect the partners or see them as a block to their career progress, they will soon leave, however well paid they are.Firms must deal with poorly performing partners.

Having managed a law firm and had to take those hard decisions, I can say that this process is not easy, particularly when one has been in partnership with someone for perhaps 20 years and who may be a good friend.

Counselling partners needs to be done carefully and with humanity.Becoming leaner should be the priority, and firms need to ask themselves some difficult questions.

How often do we hear the call by partners for a focused strategy for their firms? What are they really asking for? I suspect it is not so much a strategic plan they seek but instead it is leadership they crave.And their instincts in looking for leadership are probably right, as law firms need leaders with the vision to see and to take advantage of the opportunities in this ever developing market place.Peter Scott is a director of Horwath Consulting and formerly managing partner at Eversheds