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Law firm culture: The regulators are watching

Last week, the Solicitors Regulation Authority (SRA) published its Workplace Culture Thematic Review, setting out the qualities they feel characterise a positive culture and their expectations for law firms. While the SRA highlight stellar efforts made by firms to support inclusion and wellbeing, it also identifies a disconnect between the actions of some senior leaders and the culture they promote. The review incorporated an anonymous survey, which found that 25% of respondents felt their firm did not have a positive culture, with issues ranging from long working hours and client pressure to a fear of reporting mental health issues or bullying.

If there was any doubt until now, the SRA makes clear that law firm culture is well and truly a regulatory issue, with consequences for firms who fail to promote a positive culture.

“We are likely to take action against a firm where, for example, there is evidence of (1) a pattern of the abuse of authority by senior staff that has been left unchecked by the firm (2) a complaint of discrimination, victimisation or harassment not dealt with by the firm in a prompt and fair manner; and (3) the imposition of wholly unreasonable workloads or targets.”

I worked in law firms for over 17 years. Rightly or wrongly, the legal industry felt like ‘home’ for a very long time. I worked with some truly inspiring people on important projects that achieved real change and I have seen first-hand just how far the industry has come when it comes to inclusion, diversity and wellbeing. But as with any home, I could see the cracks and the flaws. Whether widespread or ‘in pockets’ micro-behaviour, dominant cultures and ‘my way or the highway’ approaches are alive and well in many firms, and they often go unnoticed, overlooked, tolerated or accepted.

The SRA's findings are unlikely to have taken many of us by surprise. Earlier studies have highlighted a range of concerns relating to law firm culture. The Bridge Group’s trail-blazing 2018 report on socio-economic background and early career progression in the law, brought together qualitative and quantitative data from 8 leading City firms. The report identified ‘significant evidence of micro-aggressions’ in firms. A follow up report focusing on socio-economic background and progression to partnership in the law, published in 2020, pointed to a dominant culture in firms and ‘a widespread tolerance of micro-aggressions’. In 2020, Rare Recruitment conducted a separate study into the retention of Black, Asian and Minority Ethnic lawyers, combining findings from fifty1:1 interviews with data relating to almost 6,000 lawyers. Alarmingly, 84% of the Black, Asian and minority ethnic lawyers interviewed by Rare had experienced implicit racism or exclusion in firms – 35% had experienced explicit racism.

So the SRA’s thematic review endorses what many of us have known for some time; despite considerable effort to support wellbeing, diversity and inclusion, the challenges relating to law firm culture run deep and persist in many firms.

For me, I think one take away from the SRA’s review is ‘more of the same’ is not enough. Firms need to go beyond value statements and initiatives and focus on ensuring positive everyday behaviour and accountability for wrong-doing. During my years in diversity, data collection and analytics became far more sophisticated, helping firms to really understand the diversity landscape, to set goals and targets and to assess progress. But the question of how we measure inclusion and assess culture has received far less attention. In considering next steps following the SRA’s thematic review, I believe it’s important for firms to understand where their culture is today (assessing the good and the bad) in order to establish whether, what and how they need to change. As a starting point, I suggest focusing on the three questions below.

Question 1: Is there a dominant culture in my firm?

Dominant cultures, often formed by the biases, expectations, values and preferences of those in the majority group, can undermine efforts to drive inclusion. The Bridge Group’s 2018 study identified a pressure in law firms to ‘assimilate to a dominant culture that typically benefits individuals and groups from higher socio-economic backgrounds’. Assimilation is exhausting - and it flies in the face of diversity. So ask yourself:

  • Is there a dominant culture in my firm?

  • Do we unwittingly require those in minority groups to assimilate and adapt to 'fit in'?

  • Are we open to doing things differently?

  • Do we (intentionally or not) look for ‘cultural fit’ during our hiring processes?

Taking steps to understand how individuals experience your firm is a sensitive process – particularly if it identifies less positive aspects of your culture. But while you may encounter some uncomfortable findings along the way, doing so will also help to reveal what is really special about your culture - allowing you to put your energy where it is most needed when it comes to culture change.

Question 2: Do people in my firm feel safe calling it out - or calling it in?

Several years ago, the FCA identified Psychological Safety as a key ingredient for a healthy culture.

"Creating an environment where employees feel safe to share ideas and speak up where they see issues results in more productive and innovative businesses. It also reduces the potential for inappropriate risk taking or behaviour which can result in major incidents of misconduct, causing harm to consumers and markets."

In a psychologically safe environment, individuals feel comfortable sharing ideas, offering alternative views, admitting mistakes or raising concerns without fear of embarrassment or reprisal - all key issues in the SRA's thematic review. But do people in your firm feel comfortable raising concerns or speaking out in response to poor behaviour?

The Bridge Group's research into socio-economic background and progression in the law identified concerns in this regard, finding 'complacency amongst some firm senior leaders... They are not diligent in calling out [micro] behaviour and, in some cases, they can contribute towards these dynamics.' And as one participant in the SRA’s thematic review mentions 'If people turn a blind eye, then things don’t change.' If you are prepared to listen and act, now is the time to empower your people to call out or call in poor behaviour and equip your leaders and managers with the skills to listen, learn and change. Interrupting or breaking the bias by speaking up can stop poor behaviour (and particularly unintentional poor behaviour) in its tracks.

Question 3: Are we afraid to take our rainmakers to task when it comes to behaviour?

As one SRA survey respondent states ‘It only takes one bad egg in an organisation to impact morale if others see that concerns are not being addressed and properly dealt with.’ But what if that bad egg is a rainmaker?

Another respondent comments ‘A lot of the time it doesn’t feel worth reporting issues because firms may choose the fact that somebody is a valuable fee earner over their culture. You feel like you shouldn’t raise issues so as not to cause friction or face potential mistreatment further down the line.

I have worked with many leaders and rainmakers who are among the most supportive and influential champions of Inclusion & Diversity, but I have also encountered senior figures whose behaviour can intimidate and exclude. While I do believe things are changing and firms are becoming more robust in tackling poor behaviour, sadly in some teams and some firms there can still be genuine nervousness or hesitancy in addressing poor behaviour in rainmakers - who wants to risk upsetting their biggest fee generator? My hope is that by unambiguously positioning culture as a regulatory issue - if they needed it - HR and firm leaders now have the additional impetus they need to demand change.

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