29 October 2001
There's nothing quite as irritating during a time of worry than a habitual optimist. The ability to conjure up silver linings where even the darkest clouds are gathering never achieves very much. But even the most ardent optimists must be having a hard time finding any kind of silver lining to the current economic situation. Every day brings or a new report underlining just how bleak the prospects of avoiding a recession are. Much of the speculation has moved away from whether we will avoid recession and is concentrating on what shape it will take - shallow but extended or short and sharp?
And yet amid all this gloom, and against a backdrop of international conflict and terror, those pesky optimists can still rustle up the odd scintilla of comfort. One of the more desperate and misguided attempts at doing so has focused on the fact that the so-called war for talent is at last over. With jobs being shed, employers can at last stop fretting about recruiting and retaining the talent needed to thrive and survive. The return of a little slack to the labour market also means that employers can shelve plans for some of the stranger benefits schemes, from ready meals to take home, to pet insurance. More importantly, the next round of salary increases can be scaled back to more manageable levels.
The Lawyer's latest Law Firm Business Confidence Survey, produced in association with Wheeler Associates and McCallum Layton, would seem to back up such claims. Third quarter results show that only 9 per cent of respondents rate the ability to recruit good lawyers as more of a concern than six months ago, compared with 35 per cent in the first quarter.
However, such crumbs of comfort are misleading. The war for talent has not ended. At best, the next few months will see a temporary ceasefire. Law firms, as with all other employers, are right to focus their energy on shoring up their order books and tightening financial management and cost controls, rather than on fripperies such as dress-down, bring-your-pet-to-work days or a dry-cleaning service for staff. But to lose sight of the importance of maintaining decent employee relations is a mistake. If nothing else, the structural failings in the labour market that led to the shortage of skilled staff have not gone away. As the economy starts to pick up again, firms of all sizes will be faced with the problem of attracting and keeping the best lawyers.
How firms deal with staff during the lean times will knock on to how they are perceived when market conditions improve. Slimming down staff numbers to reflect a drop in fee income may make sense. Mistreating any staff that you have to let go does not. Decent redundancy terms as part of well-thought-out policy can make a big difference when it comes to recruiting again when the economy picks up. A reputation for treating staff poorly is easier to pick up than shake off.
But more important than any staff that leave are those who remain. Nothing creates uncertainty and damages morale quite as effectively as a poorly-handled round of redundancies. At worst, this can mean a firm ends up losing staff it wanted to keep. Key staff essential to the survival of a firm in hard times are likely to up sticks and leave. If such measures do have to be taken, involving staff in any decisions can make the pain easier to bear. Likewise, the dreaded axe of redundancy can be wielded in ways that make the difficulty and uncertainty easier to bear. One of the first casualties in hard times tends to be transparency. Management meet behind closed doors and their decisions become a mystery to the staff. The uncertainty at times like this can mean that even eternal optimists in the firm may begin to fret, but then if they can be calmed, there might, after all, be a silver lining.