The productivity puzzle remains a central concern within U.S. law firms, despite a notable 7.3% revenue surge in 2023, fueled by increased billing rates and demand.
New research from Thomson Reuters and Georgetown Law indicates that productivity losses have somewhat dampened profitability. While factors like the disparity between lawyer numbers and demand growth are often cited, one critical aspect often overlooked is the effectiveness of managers and leaders.
Perhaps it’s time to ponder this aspect, particularly as it intertwines with prevalent issues such as high turnover rates. In 2023, law firms grappled with an associate turnover rate nearing 25%, with Thomson Reuters forecasting a staggering 100% turnover within the next five years. Alarmingly, 60% of associates feel that efforts to retain them are lacking.
It’s universally acknowledged that managers play a pivotal role in shaping organizational culture and success, determining whether top talent is attracted, engaged and retained — or if they seek opportunities elsewhere. Effective bosses comprehend how to elicit more from their teams, fostering engagement through tangible investments in workforce capabilities. Notably, they allocate 2.6 times more resources to intangibles like workforce development than their less effective counterparts, resulting in enhanced productivity and overall performance.
However, the challenge lies in cultivating better and more effective managers and leaders, a task that is neither easy nor quick. Nevertheless, the long-term benefits are undeniable. Firms can initiate this process by identifying the qualities that define effective leadership and moving beyond simplistic solutions to instill enduring and impactful change.
It’s reasonable to expect that those ascending through management ranks in legal firms possess both soft (transferable) and technical skills. On one hand, there are skills like public speaking and clear, concise writing, coupled with proficiency in legal tools and practices. On the other, there are behaviors, encompassing interpersonal interactions in various contexts.
“Simple gestures like inquiring about an employee’s family or personal events — coupled with holding individuals accountable without resorting to blame — contribute to fostering a culture of trust and accountability.”
Skills can be developed and refined over time, while behaviors, more intricate in nature, demand a concerted effort to change. This entails disrupting existing habits while nurturing new ones, grounded in genuine interpersonal connections. Simple gestures like inquiring about an employee’s family or personal events — coupled with holding individuals accountable without resorting to blame — contribute to fostering a culture of trust and accountability.
Effective coaching, distinct from mere advice or mentoring, plays a pivotal role in guiding managers through the complexities of behavioral change. It involves facilitating self-reflection to unearth authentic leadership styles, prompting managers to confront their potential and the behaviors hindering their progress. Courage, humility and discipline emerge as indispensable traits, as advocated by executive coach Marshall Goldsmith.
Managers committed to personal and organizational improvement embrace these characteristics:
Organizations that recognize the significance of leadership development and remain steadfast in their efforts are poised to cultivate highly engaged employees, mitigate turnover and bolster productivity.
