There was a time when the HR function in most law firms was left in the enthusiastic and amateur but, at the time, capable hands of the senior partner’s personal assistant. The role was primarily that of a less-than-glorified record keeper. Although they developed into good administrators, as the market became more competitive (necessitating a growth in their functions), it became clear that even the smallest firm needed to develop HR from merely a title into a separate and important function in itself. Nowadays most firms will have in place, or look to recruit, ‘strategic’ HR people, most of whom are, at the very least, a couple of notches below board level and who will have an impact on that board, often via a partner.
This changing role has seen a relatively rapid advance among law firms. However, the signs are that attaining this level of progression for HR is not going to be sufficient, and that the more forward-thinking firms, large and small, are keen to take their HR directors one step further. They have come to realise that they are a stark example of a service industry and, like any such industry, the most important element to their businesses is their staff. In other words, human capital.
Of course, key to the wellbeing of staff and critical to the link between staff and the firm is the HR director. These radical firms have now taken the bold step of including the HR director on the management board – an act that would have been all but unthinkable only a few years ago. They are now able to include HR in the whole firm picture, allowing for this function to take a more proactive, rather than reactive, role.
Including the HR director on the board is a prudent move for a number of reasons. Indications are that these innovative firms are reaping the financial rewards of this move. These HR directors, many of whom are not just professionally Chartered Institute of Personnel and Development (CIPD)-qualified, but often holders of MBAs, are finally utilising their skills at the heart of the business strategy. Any firm not utilising this talent is desperately underinvolving this asset. Indeed, not utilising these undoubted skills is rather like asking Michael Schumacher to change the tyres.
With HR directors on the management board, the firm that is, for example, wishing to open European offices, double the size of its practice at home or make the move to full service, can make certain that the implementation of change for staff development or recruitment can be managed correctly. If there are issues of profitability, the HR director can be included early in the process of quality measurement or competence. HR is the pivotal function with regard to any change. Any firm that is moving in a forward direction (and also ones going the other way) would be prudent to involve the HR director at the highest level.
There is one other, slightly more basic, reason to consider this move. Since most firms realise the need for HR to have a strategic element, they have thus courted professionals who are at the right level to perform this function. Therefore, some firms are taking on HR directors who are at junior equity partner level. To remunerate them at this level and only have them perform at an operational level is a major underutilisation. The sooner some firms appreciate not only the talent in their midst, but the critical role to be played at board level by HR directors, the better for both.
Maura Watson is a senior HR consultant at Graham Gill