The talent debate: The war rages on

James Tsolakis, NatWest: One of the great challenges setting this up with Alex is in the long period I have been a banker to the legal profession, the rate of change is faster than I have seen for a long time. The challenge was defining the discussion. It could have been IPOs, artificial intelligence, international expansion – any number of things. I am pleased we chose a subject that will ultimately touch all these other subjects driving change in the sector.

Alex Novarese, Legal Business: Kicking off, Sharon, what worries you about talent?

Sharon White, Stephenson Harwood: Making sure we get our share and hang on to it. We have worked hard over the last couple of years to support high-performing associates’ progress to partner. We have done a lot of partner hiring and there was a feeling from associates we were not so interested in promoting internally, which was not the case. We are also focusing on helping our women to ensure we have greater parity in senior roles.

Sarah Wiggins, Linklaters: It is making sure our talent reflects the clients we serve. Making sure it is diverse, global and the talent have the things they want: agile working, different career paths and all that entails.

Claire Wills, Freshfields Bruckhaus Deringer: I ask if we are thinking about the lawyer of the future [when recruiting]. Are we thinking carefully enough around what clients need and what our firm needs?

Melissa Fogarty, Clifford Chance: It is about engaging our talent at an earlier stage. The best people to drive change in our institutions are our youngest colleagues. We do not do that well enough. When I started it was the traditional model of being a bag carrier. More of a personal connection is needed, because we will then get more from our younger talent and it will feel like a more inspiring place to be.

Andrew Darwin, DLA Piper: One of the big challenges is developing leadership skills among partners and to get the best out of the talent coming in. You have these baby boomers trying to work with an increasingly diverse workforce who are not just lawyers. You need partners to get the best out of that more diverse workforce.

‘The amount the profession spends on training far outweighs other industries.’
Sarah Wiggins, Linklaters

Karen Davies, Ashurst: There are so many other competing careers now out there. We obviously need to think now for the Millennials to retain them and offer them the best environment to succeed.

Stuart Foster, NatWest: We often talk about the banker of 2025. We are focusing on a very different type of individual: an innovator, they are curious, ready for a different career path that means you are not going to be credit or capital, which is a traditional banking path. You could work for a fintech. It is a different mentality.

Elizabeth Robertson, Skadden, Arps, Slate, Meagher & Flom: I started in a small firm, Peters & Peters. I loved the bag carrying and teaching element of that. We need to be careful we do not lose that. I am also very excited about the new generation. I find them totally delightful to work with, utterly committed. However, they do expect a voice, in a way we did not.

Adam Plainer, Weil, Gotshal & Manges: We get incredibly talented, hardworking people. We are investing a lot in these people and unless you give them a career path that makes sense to them – I don’t think we listen enough to what they say, even though we think we do – they are often happy doing something else.

David Morley, Allen & Overy/Elaghmore: I was senior partner at Allen & Overy. I now do a variety of things but one of them is that I established a leadership centre on preparing the next generation of leaders for [A&O]. That would be my choice for one of the biggest challenges because you cannot deal with any of the issues unless you have leaders capable of addressing those issues in radical and innovative ways. It is moving from a model where the legal profession has got by without professional leadership to a model where there is much more investment in leadership skills and selection of leaders.

Rita Lowe, CMS: I see Millennials in two categories. If money is the main driver, it is very, very hard to retain them unless you pay very highly. If what Millennials want is that they love the job, then they are looking for wider opportunities. We have just changed our career structure to address a more balanced view of career. It could be collaboration, leadership, CSR – lots of things.

Alex Novarese: Will law firms have to make decisions about advancement at an earlier point?

Adam Plainer: The dilemma is clients do want the senior-level partner attention, so we have to be careful not to dilute the title while still meeting the needs of our new generation of associates. We have shortened our partnership and counsel tracks by two years to address this but will also start reviewing our associates earlier regarding their prospects and having honest conversations about how they are trending.

Rita Lowe: Part of the appraisal system now is to communicate earlier with associates and be realistic as to what it takes. They want more feedback.

Julian Stait, Milbank, Tweed, Hadley & McCloy: There is an assumption all of our teams want to be partners and that is not the case. I had breakfast with an associate in my team this morning and she recognised, in terms of decisions about having children, she wants a longer career path to partnership. It’s not just transparency, it’s mapping to career aspirations of associates.

‘The rate of change in the legal profession is faster than I have seen for a long time.’
James Tsolakis, NatWest

Elizabeth Robertson: I have three sons. For ten years I worked a four-day week. It wasn’t until 2007, when I was nearly 40, that I went to the City. I carried on a four-day week. Then moved to a nine-day fortnight. Then had another baby. My career had been successful but then really took off. I was 42 before I took equity at K&L Gates and am very open about that because I want to say to everyone, men and women, you can go quick, quick, slow and quick again. I thought my main role was to be a woman role model but it is about having these conversations. You wear your career, not let your career wear you.

Alex Novarese: How much do people feel this flexibility is being achieved?

Karen Davies: We have had to listen to associates and all of them want complete flexibility. As partners we have to lead by example. I say, ‘Fine, this is what I am going to do. I encourage you to do the same.’

Richard Foley: I am not convinced the partnership model is sustainable given the way law firms will develop. The working demographic is changing. The idea is you come in and get partnership after five or six years, work like hell and if you survive until 50 you retire and have some cash. That is not going to work over a 55 or 60-year career. In ten years, will we have partnerships like now? I doubt it.

Rita Lowe: But partnerships are so much more flexible than ten or 15 years ago. There are a lot of people that are flexible with four-day weeks and nine-day fortnights.

Andrew Darwin: Over the years we have launched a number of businesses that involved people from different professions, most of which failed because our career structures were set up for lawyers. But I don’t think the partnership model is dead. It has proved robust.

David Morley: We have to recognise the model for how we recruit, train, motivate and promote associates is fundamentally broken and we are just fiddling around the edges.

Julian Stait: I was looking at what my team was doing. One of my special counsel is off on maternity leave for the third time. One who had just come back on three days is now back to four days. One is on four days and will go on maternity at the end of the year. One associate is on three and a half days a week but doing charity work for a day and a half and one of my associates is fully flexible. If somebody posed that on day one it might have been a problem, but because it has evolved over time it works really well.

Alex Novarese: David, where is the model broken?

David Morley: All of it. Just take a very simple example, [A&O] did an analysis of the people we were recruiting at a graduate level and discovered 94% had done humanities. That is not the right mix anymore.

You have to have diversity of people coming into the profession and accept people are not going to have lifelong careers. Partners are very conservative but they are being forced by the market. Radical change is coming.

Rita Lowe: We have not seen much on the whole apprenticeship thing and we all pay towards the levy. It is staggering there was a great fanfare but it does not seem to have kicked off yet.

Karen Davies: We are piloting it in September with six places. Aimed at talented school leavers, they go onto a two years paralegal apprenticeship and if that goes well they complete a five-to-six-year solicitor’s apprenticeship.

‘Our female associates ask: “What do you enjoy about being a partner?” If we cannot answer, something is really wrong.’
Melissa Fogarty, Clifford Chance

Adam Plainer: If you look at the US, it is common for lawyers to go to banking and then flip back. You get a lot of lawyers on boards – that does not happen in this country after the director duties stuff. We are more rigidly thought of as legal and these Millennials want to break out of that classification but are happy to come back. Can we encourage them, in a way that we do not lose them forever? Look at KPMG, they are now going to get 18-year-olds straight from school.

Elizabeth Robertson: EY is doing that as well. The feedback I hear is that it is excellent.

David Morley: They recruit incredibly eclectically. If their skillset fits, the Big Four recruit. That has to be the way the law firms are going. Most firms, I suspect, are likely to move over time to a multidisciplinary approach with a range of people to solve the problems of the client and you accommodate those different career structures.

Andrew Darwin: There was much talk at the time about the Legal Services Act opening the door to non-lawyers joining law firm partnerships and that has not been embraced.

Richard Foley: If I look at the rationale for that within our business, up until three or four years ago, nearly all of the legal service delivery was by lawyers and the business operations teams had their own career paths. But once you start looking at that, one of the things that may happen is you open up the equity to a range of people delivering legal services.

Claire Wills: That is what we do. The old idea of the hierarchy of the partner and then somebody in business services they did not treat well has very much changed in our workplace.

James Tsolakis: That is great to hear.

Claire Wills: One question we are asking ourselves: because of technology, can we make it more exciting for the Millennial? Due to AI, for a lot of what I used to do a long time ago, you do not need very talented lawyers doing that. Is there a way of accelerating them?

Melissa Fogarty: I wonder whether we are inspiring people enough about their career. I do small group dinners with our female associates and they ask simple questions like: ‘What do you enjoy about being a partner?’ If we cannot answer that question quickly, there is something really wrong. The partnership model is a differentiator. However, I only learned that when I became a partner. Are we doing enough to open the kimono and be more positive about ourselves?

‘I am not convinced the partnership model is sustainable given the way law firms will develop.’
Richard Foley, Pinsent Masons

Adam Plainer: I do not think the Millennials want this life.

Alex Novarese: Is there an erosion of partnership aspiration?

Sarah Wiggins: I don’t think so. I am mentoring about five or six associates and mentor some women outside the organisation as well. There are plenty of people in law firms who still want a career in the law. They do not look at people and say: ‘That looks horrendous.’ They ask, ‘How do you manage it?’, which is a different question.

Adam Plainer: I am not sure how Millennials see this. There is a great book called Generation Z, which I am reading because I have an 18-year old and a 16-year old. I have started to watch Love Island because it is the only family time we get. I think Dani and Jack are going to win. I am struggling to understand from my kids what they want in life.

Sarah Wiggins: They also want purpose.

Adam Plainer: I agree. Direction and purpose. Pro bono work helps. They love that stuff.

Melissa Fogarty: I do not think it is about trying to find less onerous careers. It is about having more purpose. Seeing you are valuable and you can add to a relationship, a matter or a business.

Alex Novarese: Any practical ideas on improving engagement?

David Morley: We have had success with moving to a continuous assessment process. Everyone was very sceptical because they thought: ‘Continuous assessment means no assessment.’ However, I met with a group of senior female associates a few weeks ago and they were positive. They said: ‘We used to have a partner reading from a script terrified to say the wrong thing. Now, the same guy is having much more informal conversations and it is much more instructive.’

Claire Wills: There are some partners who are very good at it and others are useless. Have you found a way of resolving that?

David Morley: There is peer pressure now. It is not socially acceptable in the partnership to be not personable in your approach to giving feedback.

Elizabeth Robertson: Do you do upward appraisals?

Karen Davies: We do and it is important.

Claire Wills: We struggled with appraisals. There was a sense people would go to the person that was going to give them positive feedback.

Adam Plainer: When I was a trainee, I developed a relationship and I still see the person who was my mentor. I am not sure we have enough time to spend with people and therefore the relationship breaks down.

David Morley: I do not buy that. It is not about time. It is not a priority.

Andrew Darwin: We forget the firms have these wonderful policies but the sharp end is often the partner managing the team.

Alex Novarese: Should law firms not give a lot more say in governance to senior associates? They are the future of the firm.

Rita Lowe: One of the issues that worked well for us was [going] open plan when we moved to our new offices. That has broken down lots of barriers. Our new system involves one appraisal, but we have two fireside chats, which is not the paperwork but an opportunity to hear.

Claire Wills: We are moving to a new building in a couple of years and have been doing a consultation. I thought there would be much more demand for open-plan offices. Lawyers want a cellular plan.

Melissa Fogarty: They think they want one. I had an open-plan office in Australia and loved it.

Richard Foley: Just under 50% of our office space is now entirely agile. We have not had our younger lawyers saying they would like to go back to cellular offices. We have been pushing agile working hard. Our analysis revealed the way offices were constructed was not fit for purpose. Every one of our offices was never more than 70% occupied on any day. When we speak to colleagues in banks, they say: ‘We are 145% occupied. Welcome to the real world.’

‘The real hope I have is the 35-year-old men at Skadden. They have talented wives doing demanding jobs. They want to parent together.’
Elizabeth Robertson, Skadden, Arps, Slate, Meagher & Flom

Alex Novarese: We are hearing talk about the need to get other skills and yet I have seen half a dozen instances this year of law firms cutting jobs to move them to lower cost places. The people getting shoved up there are secretaries and business services. Very rarely fee-earners. What message does that send?

Adam Plainer: The lawyers want to be in central London.

Alex Novarese: A lonely tear rolls down my cheek. So what?

Adam Plainer: I do not disagree with the sentiments. However, if you want to attract talent, you have to put them where the talent want to be.

Alex Novarese: So the lawyers are the talent and not the business service people?

Adam Plainer: I am not saying they are not.

Alex Novarese: You are a bit.

Claire Wills: The mix of what we need for the business is changing. The amount of secretarial support we need is changing.

Andrew Darwin: London is not the centre of the universe; there are great places to work all around the country and the world.

Alex Novarese: But it speaks to a very entrenched hierarchy. Law firms are fundamentally bad at recognising people who are not lawyers can drive the business.

Andrew Darwin: I accept that point.

Claire Wills: I am really excited about our Manchester offering. I just wish it was Liverpool because that is where I am from. It is fantastic that we have top quality business development people.

David Morley: The distinction is not between lawyers and non-lawyers. It is between people who earn fees and people who do not. That is true in any business. Client-facing people command a higher market value.

Alex Novarese: I do not accept that distinction.

David Morley: Where you are right is that firms have not been good at bringing in people who are not lawyers but who are fee-earners. They may be technicians or data scientists or whatever. That is happening.

‘We have to recognise the model for how we recruit, train, motivate and promote associates is fundamentally broken and we are just fiddling around the edges.’
David Morley, A&O/Elaghmore

Alex Novarese: What about flexible working, I hear it has changed a lot in the last three years.

David Morley: Massively. We could not recruit anyone otherwise.

Alex Novarese: Yet the number of female partner promotions is still terrible. A&O over the last three years has an average female promotion rate of 15%. I don’t have Pinsents’ numbers in front of me.

Richard Foley: 45%.

Elizabeth Robertson: I want to know which are equity. You have to compare apples to apples. Otherwise, you have unpleasant debates that do not reflect the many good things firms are doing and the firms not doing good things get away with it.

Richard Foley: The real measure is whether we are creating an environment where the playing field is as level as can be. The only metric I am interested in is how we are performing against ourselves. Take gender pay gap reporting – if you go and hire 150 male PAs, you will change your gender pay gap number but are not doing anything to address underlying problems.

Alex Novarese: I believe Pinsents is having a dialogue about gender pay reporting to improve effective benchmarking.

Richard Foley: Yes. We went early with our numbers [on gender pay gaps]. We got shot at by the press. The reports were about lack of transparency and loopholes. There were no loopholes. The legislation was very clear that the requirement was to exclude partners.

I have contacted the Law Society and said, ‘We need to fix this because next year you are going to get exactly the same thing: “Do we include partners?”, “Do you have two sets of numbers?”’ There is a public perception that if you follow the letter of the legislation, you are not being transparent.

Alex Novarese: Surely following the letter of minimal compliance is not what leadership is going to look like in the business world in the years ahead.

Richard Foley: It is not a complicated thing to fix but if you have some legislation that says, ‘Do one thing’ and everyone follows it then you can have a discussion about whether that is the right thing or not. It is an unhelpful discussion to suggest, ‘law firms have manipulated their figures’ because it is not true.

Adam Plainer: Is it a timing issue? If we fast forwarded ten years, would it be radically different? If we are going to retain this talent, we have to deal with the problem.

David Morley: The reporting thing is a sideshow. The central issue is in many law firms, the environment is not conducive to many women choosing that as a career for the longer term. What I have come to understand is there’s passive resistance from some men. Not because they oppose change. They do not see what needs to change. Also, many men have withdrawn from real debate because it’s seen as too dangerous.

Sarah Wiggins: We have had a women’s leadership programme at Linklaters now for over five years. Women have to apply for it. They have to be MAs. They have to have at least four years of PQE. At least 25-plus women through a year. It is an intense five-day programme about what they want out of our careers. They also get paired with a partner in another office or practice, who then sponsors them. That is a very good process of bringing the mainly male population along so they understand a female perspective.

David Morley: Allen & Overy runs a sponsorship programme. We started with five or six partners, and one of them was explaining this issue. He said: ‘A female associate came into my office and said, “I am about to have a baby and cannot see any way I can combine a family with a career in this firm. What do you think?”’ and he said, ‘You are right’. He said: ‘I did not know what to say.’ A lot of men do not feel equipped to have these conversations.

Melissa Fogarty: That’s the worst thing you could say to a woman in that moment.

David Morley: There are lots of real conversations going on.

Melissa Fogarty: I know. They have to recognise there are those overt conversations, which are not great, and then there are the subtle conversations. We continue to keep those traditional norms when we should take more of a leadership role and get away from this theme, ‘How is a woman going to do this?’ and push: ‘How are parents going to do this?’

Elizabeth Robertson: For the first time in 25 years I am feeling hopeful for the reasons you have just articulated. The real hope I have is the 35-year-old men at Skadden who are making counsel. They often have very talented wives also doing demanding jobs. They want to parent together.

Alex Novarese: What do people think law firms get right with talent? I believe law firms are obsessed with talent. They don’t always get it right in handling or engaging talent it but they are obsessed with people and that speaks to a lot of their virtues.

Andrew Darwin: One thought I would offer, is we are about to find out what Millennials think because they are moving into leadership. We now have 20% of leadership positions in business held by Millennials.

Julian Stait: We have started a programme where we send all of our associates from fourth year upwards each year for a week to Harvard Business School on non-law subjects like corporate strategy and leadership. Many of them have been on this programme and think it is transformative as a sign we are investing in them and bringing them closer to the clients. Things like that make a difference in retaining key talent.

Sarah Wiggins: The amount of money that we spend on training and diversity far outweighs other industries. That gets overlooked.

Elizabeth Robertson: One of the reasons I have stayed in the profession for 25 years is because it is tremendously fulfilling but also fun. I do not fear because we may navel gaze a few times but we are always thinking about the future. We are used to changing law and that is what we do really well.

Alex Novarese: Thank you for your time and thoughts. LB

alex.novarese@legalease.co.uk