A well-known, global accountancy firm is reckoned to spend six per cent of its turnover on training. An Australian law firm, Blake Dawson Waldron, spends seven per cent of its professional payroll costs on training. This firm's direct expenditure on training amounted to one per cent of turnover in the 1994-95 financial year, or about £1,100 per fee earner across the firm. Including the opportunity cost of lost fee earning time that figure rises to about 2.8 per cent of turnover.
However, these figures largely miss the point. Auditors might ask the more relevant question – what training are you getting for your money? The above figures focus on input and the size of the budget is perhaps of more interest to the person who manages it. Partners should be, and increasingly are, more concerned with outputs.
How do you measure the impact of training? Much depends on the perception of what it is you are trying to measure. If training is seen as a cost, then the favoured output is likely to be as small a budget as possible to meet Continuing Professional Development obligations. Value for money (ie the least cost) will be the key factor, with short courses, ideally outside core hours, being the preferred format. Evaluation might be based around the monitoring of claims against a firm, with remedial action based on improving internal procedures. The perpetuation of the training budget, or an increase at best in line with inflation, may depend on whether course participants like the course, feel as though they have learned something, but generally do not feel pushed too far out of their comfort zone. The bottom line is that inputs and outputs largely support the status quo.
But what if we are trying to measure a change in behaviour or an increased ability to meet the challenges of doing business in the future? How do we measure these on the basis that it is a more positive rationale for providing training? The answer is that it can be done but requires hard work collecting the relevant evidence.
One example of this is in the provision of legal education for newly qualifieds. Eyebrows were raised when talking about two days out of the office learning the law. "What is the point of law degrees and the LPC?" partners cry.
But one of the outputs and benefits is in overcoming the continual stream of lunchtime sessions that do not necessarily give an overview of a subject. Another is the need to integrate skills training in using our precedents. The reaction then has been will two days' training be long enough?
To calculate the business output, one method of calculation is to take the newly qualifieds down the learning curve more quickly than would otherwise have been the case. The measure would be a comparison between fees generated over the ensuing three months by those trained against an equivalent, untrained group over a similar time period. That is where the hard work comes in to gather and interpret the data and derive some useful lessons.
In truth it can be very difficult to isolate the direct benefits of training as the data throws up other issues as well.
A second example is based on management training and specifically teamworking. The fact that lawyers need to work more effectively together is gaining acceptance. However, the theory that the outputs from a team should be greater than the sum of its parts is more difficult to achieve. Focusing on outputs helps.
A greater incremental growth in revenue generated is one measure of the effectiveness of the team's training. It requires lawyers to be honest about the advantages gained from working as a team and feeding off each other's skills. They also need to disclose the successes and frustrations and what they have learned from their experiences. Follow-up sessions are one way of formalising this learning from experience. Benefits have been increased revenues and greater utilisation of support staff to the extent that a perceived vacancy was not then required.
One advantage of a multi-site organisation is being able to compare performance across similar work types, benchmark these and set ambitious goals for all the teams to achieve. One action resulting from a team working session has been to go and discuss with a more successful department what they do to achieve above-average performance.
A third example comes from a professional selling programme. One part of the programme asked participating fee earners to bring in real situations where they faced barriers in gaining further work from an existing client. Fee earners were then asked to take the
position of the client and were questioned by their lawyer colleagues.
New insights have given an opportunity to explore alternatives with clients in order to generate this further business with them. Setting relatively low goals and expecting only 10 per cent of the fee earners to be successful in deriving additional revenue in the first three months has more than paid for the course. But, once more it is hard work setting up the mechanisms to evaluate the course.
There is an element of passing and failing which means exposure and discomfort. It also means that the fee earners need to log success and failures and learn from these. If we invest money in personal finance products, we are keen to monitor performance. It is this discipline that we try to instill as part of the training process.
What are the benefits? One benefit is a focus on what we are trying to achieve in business terms by stating the outputs upfront.
Secondly, we are moving away from running courses on soft skills which are difficult to evaluate on their own, such as listening skills and dealing with difficult people. Such subject areas are included as part of a much more focused business objective.
Given that course administration is very time-consuming, there is a large amount of time saved by not setting up programmes of spurious benefit. There are also the spin-off benefits of being able to integrate and communicate financial information to both partners and fee earners in a practical and specific way.
Finally, there is growing evidence that more learning is taking place on the job and this is being driven by the fee earners themselves, further reducing the opportunity costs of training.
Stephen Cowburn is national director of training for Eversheds.