Law firms never used to talk about their ‘culture’. But when US firms started, UK firms followed. Now, all the big firms talk about their cultures, but US firms still do so more publicly and enthusiastically.
Could this be a case of ‘protesting too much’? ‘The more you talk about “culture”, the more of a red flag it is,’ says one anonymous US firm insider. ‘Firms with genuinely strong cultures don’t need to talk about it to make it real.’
In this series, the Gazette has previously looked at two areas where US firms could learn from their UK counterparts: infrastructure and entrepreneurialism. Now we will turn to firm culture: both the claims made about it and the tripwires it can set off.
When the pandemic and Black Lives Matter swept across the globe, law firms felt compelled to respond. Some did so admirably, putting resources into remote working and creating support groups.
Many emphasised how their ‘strong culture of community’ helped them to push through, showcased through internal newsletters and social media posts. It became more common for firms to comment on the news cycle, rather than just legal practice, using news developments as a way to reflect positively on their own cultures.
Yet for many, the reimagining of certain kick-ass US law firms as benign communities of mutual well-wishers sits uncomfortably with the reality of PEP-obsessed hire-and-fire culture. ‘Since 2020, we have seen an acceleration in a certain kind of magical thinking in some law firms,’ observes our insider, ‘where they will their cultural vision into being through messaging, rather than reflecting what’s really there.’
Some will say this is just the craft of the talented comms professional. Declarations on culture can become questionable, however, when they conflict with business imperatives, such as the need to summarily fire swathes of staff to avoid a minuscule dip in PEP, or when the firm’s narrative shifts to match a change in political sentiment.
UK firms are to some extent protected from accusations of hypocrisy by better employment protections; they have also been spared rolling back on environmental, social and governance (ESG) claims when the political wind changes. Many leading US firms have reduced ESG web content and now underplay ESG credentials in light of the Trump administration’s policies. ‘Enforced about-turns make firms seem inauthentic in their commitment to a sustainable culture and their professed values,’ says our insider. ‘You have to have consistency over time to create perceptions of an authentic culture.’
By promoting themselves as champions of social engagement and diversity, US firms scarcely imagined how these claims would later be tested to breaking point. UK firms are happily isolated from this dilemma because of a different cultural approach to communications on diversity, one that is lower-key and less political.
Stuart Woollard is a founder of The Maturity Institute, which helps businesses improve through more effective management systems and healthier cultures. He sees clear dangers in prioritising short-termism over more consistent values-based activity: ‘Since the collapse of Enron, we’ve seen myriad corporate scandals and failures arise from an obsessive focus on short-term financial return rather than long-term value. Our own data shows that US firms, which were focused on protecting short-term profitability by doing diversity, equity and inclusion (DEI) deals with the Trump administration, have seen damage arise from client and staff attrition.’
DEI initiatives are the obvious example of where US firms’ claims about culture have come back to bite them, with many rowing back in the face of economic pressure from government. But even cursory glances at the real substance of the claims in the first place suggest that all was not what it seemed.
‘For people who trade on definitions and precision, law firms are poor at defining what DEI means or what its aims actually are,’ says our insider, ‘and if you make strong claims, expect to be called out on them.’
Other sources point to a US firm in London that has more white lawyers with the surname ‘Black’ than actual black lawyers; and another US firm that celebrated one of its Latino partners as a race champion when her background was from Spanish high society. ‘When firms overreach themselves in this way to win awards or for social media hits, it only serves to undermine any genuine successful diversity initiatives that they may have,’ says our insider.
Certainly, Trump’s attacks on some law firms have thrown a spotlight on the extent to which DEI commitments are virtue-signalling, laying bare a fault line in US firms’ cultures.
Some leaders have tried to reconcile with the new administration; others have not. But is that really to do with values? Law firm leaders have an overriding duty to ensure that the firm will survive and thrive; after all, many people’s jobs are riding on them. For this to happen, some firms may have to mollify to survive, whereas others have the privilege of being immune because his executive orders do not impact on their bottom line.
UK firms are much less likely to be caught out by changes in the political firmament, because they never bought into politicising their own culture in the first place.
Lou Silver, diversity and inclusion manager at Freeths, says: ‘DEI is a very different framework in the UK from in the US. The backlash in the US is largely about “affirmative action”, which is called “positive discrimination” in the UK and is unlawful. Here, instead of bypassing the systems to fill a diversity quota, we look at why a system might work better for some groups than others and think about how we can adapt it to make sure everyone has a fair chance to bring their best, whether that’s in recruitment, performance or progression.’
Freeths can back up its cultural qualities with solid evidence of its societal impact, as evidenced by its high position in The Maturity Institute’s Law Firm Maturity Index. ‘There is a level of authenticity about who they are as a business,’ says Woollard.
A good case study of the impact of cultural differences is the merger between Allen & Overy and Shearman & Sterling. ‘The merger posed an interesting situation,’ observes Woollard, who downgraded the newly merged firm in the index rankings. He claims that on too many points: ‘Issues of culture were not considered pre-merger, and were left to be dealt with post-merger.’ There are clear lessons here for all firms.
If you want to make statements about firm values, including commitments to diversity and culture, be prepared to take a financial hit to stick with your principles if tested.
If not, refrain from crowing about your values in the first place. Changing values to fit the prevailing views of clients, or governments, is a chameleon culture, not a genuine one. It is best to accept this for what it is, and just focus on the money-making.
See part 1: How UK practices outperform the US ‘elite’ and part 2: Britain breeds the better entrepreneurs.
Rick O’Neill (a pseudonym) is a lawyer with extensive experience of working at US law firms based in London
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