Contracting success

Stephen Harvard Davis outlines what it takes to make new contracts result in successful employment.

A huge amount of time is spent negotiating and designing employment contracts for senior partners, partners, lawyers and legal team managers.

Yet, despite all this time and effort, research shows that between 40 and 50 per cent of all hires in business, including law firms, leave early, are dismissed, or receive a poor performance review within 18 months.

Such failure is often in spite of a track record of success. Indeed, the appointment of a partner is always attributable to previous success. So what goes wrong?

There are three common mistakes that many law firms make when designing a new employment contract. The first is failing to communicate the exact results required. New members of a firm need to be told not just what constitutes a success in financial or growth terms, but in how to manage, work with and enhance the practice’s culture and management style.

Providing a clear understanding of what success looks like can be achieved by ensuring that the history of the legal practice, what needs to be achieved and by when is properly communicated to the new hire. This information should then be contained within any appointment agreement or contract.

The specific information that needs to be given includes: how the practice has reached whatever situation it is in; what problems have been identified if the situation is not improved; what actions are expected from the new hire in the short and medium term; what constitutes success in the managing partner’s eyes; and how and when performance will be measured and rewarded.

The second mistake is failing to communicate the cultural and managerial style of the practice, particularly those aspects that have contributed to past success. Where the new partner is expected to be a change catalyst, record should be made of any aspects of culture and style that must be retained.

This information is not designed to constrain the new lawyer’s freedom of action, the objective here is to ensure that changes are introduced so that they complement the firm’s brand image as well as being discussed prior to unilateral action.

The type of information useful at this point includes: identifying the people with the most influence in the organisation; identifying political groups and the influence they have; and identifying what support to plans and actions the senior partners will give.

In any new partner’s mind there is the need to prove oneself. This often creates a false sense of urgency that encourages ‘quick wins’. However, the wrong quick win can permanently harm a new lawyer and point the individual towards the exit door. Any new partner will be assessed by direct reports and colleagues by the actions and statements that are made in the first few days, yet it is worth remembering that new partners are unlikely to positively affect the bottom line within their first few months.

Quick wins need to focus on creating a reputation for problem solving that satisfies the other partners, the management team and other parts of the firm. Changes that look good on the surface, but that contribute nothing to profit or productivity, should be discouraged. The quick wins to encourage are those that remove blockages or simplify a process.

Law firms can avoid the 40 per cent risk of ‘executive’ failure, so common in business, and the costly repercussions, by ensuring that they provide essential information to any new lawyer, ensuring that there is a clear understanding of not just the required results, but the essential aspects of style and culture that contribute to the firm’s success.

Consultant Stephen Harvard Davis is a change management and business relationship specialist