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Law firms in the era of remote working
The Covid-19 pandemic accelerated a shift to remote working for law firms. Questions remain as to how permanent this change will be.
Law firms are, by and large, resistant to rapid change. In some cases, they’ll need convincing that moving to a new style of working is merited and will continue to deliver the client service that’s essential to their survival.
But in spring 2020, law firms – alongside their clients and many others in professional services – were forced into sudden change as the Covid-19 pandemic hit. With governments ordering citizens to stay at home, it was time for a rapid shift to remote working. Firms which had for some time been offering a less substantial ‘flexible’ option to lawyers had to find ways of ensuring all their staff could operate effectively out of the office.
More than two years later, with restrictions lifted in the majority of countries, offices are beginning to fill up again. But the impact of the pandemic remains, and many firms have fundamentally changed the way they work, which, in some cases, will not be reversed.
The way firms are working
‘In 2022, as a firm, we’ve looked around and talked to a lot of our peers to see what they are doing. The decision was generally to be hybrid and agile. We all agree on that pretty much’, says Hanim Hamzah, Co-Chair of the IBA Law Firm Management Committee and Regional Managing Partner at ZICO Law, who’s based in Singapore.
‘The umbrella is trust. It’s about trusting people to do the best that they can do in the circumstances they do it’, Hamzah adds.
The majority of firms around the world appear to have gone down the same route as ZICO, heading back to the office but with a flexible working policy. Many are asking their lawyers, and most staff, to spend three days in the office with two possible remote days a week.
The biggest shift here is for support staff to also work outside of the office. A 2021 survey from legal tech company BigHand found that over a third of UK and North American firms expected their support staff to be out of the office for two to three days a week; this figure drops to just four per cent of firms in the Asia-Pacific region, where there remained a greater expectation for support staff to be in the office the majority of the time.
The legal profession is a profession of giving confidence to clients. Those things do well with physical meetings and physical contact. I feel that clients will still need hand-holding
Co-Chair, IBA Law Firm Management Committee; Regional Managing Partner, ZICO Law
However, a 2019 survey by BigHand found that globally, only three per cent of support staff were working remotely and this figure decreased to only one per cent in North America specifically, so there has been a huge shift in only two years.
These figures are of course generalising. In different jurisdictions, and even different regions or offices within a country, there remain significant variations in how firms are approaching the return to the office.
‘It’s very hard to make one firm-wide policy and think that goes for all the big firms’, says Stephan Swinkels, a partner at Littler, who’s based in The Hague.
Swinkels’ firm has offices around the world and he says the approaches to flexible working post-pandemic vary widely between these. For example, in Poland and the US Midwest almost everyone is back in the office, while in London or on the US East and West Coasts, significantly more in the way of inducements are needed to get people back in.
At Littler, and also at ZICO’s regional offices across the Asia-Pacific, regional managing partners get to decide how they are managing their approach, depending on issues such as market needs, the tax exposure and work permit situations for individual employees, and connectivity.
Hamzah explains that the latter was a challenge in the early stages of the pandemic, with some Asian countries still at a fairly basic level when it came to filing documents with authorities, for example.
She says it wasn’t initially easy to communicate and get things done online but ‘after six to eight months for countries to catch up it was fine’. For the team in Singapore, there were few problems ‘because the internet is really smooth and the regulators are fine with access’.
With these issues now largely resolved, the way each office and team will work is likely to come down to the people, Hamzah says.
‘They follow their partners. If the partner is a person who likes to come in at 0800 [the] chances are the lawyers and staff will have to come in as well’, she says.
Focus on the business model
Arguably, resolving the question of how many days lawyers and staff should be in the office is the easy part of the ‘new normal’. The pandemic has proven that trust and efficiency is not the issue some once worried it would be, and technology means remote working is productive.
Ultimately law firms must keep on serving their clients, and this is where Stephen Revell, Co-Vice Chair of the IBA Law Firm Management Committee and a consultant at Freshfields Bruckhaus Deringer in Singapore, believes they’re losing focus.
‘When we were in a Covid period clients were hugely impressed that law firms carried on working notwithstanding. There was a sort of “we’re all in this together” atmosphere’, Revell says.
But Revell argues that longer term, this feeling is not going to hold water, and clients are beginning to ask if they are getting the same level of service from across the team or firm they are dealing with if their lawyer is working remotely.
‘The answer should be yes, but is your law firm thinking about that as proactively as clients are expecting you to do?’ Revell asks.
Technology can fill some of the gaps, with bigger firms in particular deploying increasingly sophisticated know-how systems, but Revell argues these cannot replace chatting to a colleague in an office corridor.
‘The danger is that law firms and clients tend to say what they think they ought to be saying rather than necessarily what they believe. There’s definitely a mismatch between public statements and private beliefs’, he adds, explaining firms can talk the talk on agile working but not necessarily make it function as effectively as full-time office working.
Clients always hold the power in an adviser–client relationship, and Revell says that if a big-name corporate client tells a firm that it will ditch them unless all their lawyers are in the office, the firm will comply. He doesn’t believe that firms are on the front foot when it comes to this debate, and ultimately client demands could potentially force a greater return to the office than some would like.
Hamzah agrees. ‘The legal profession is a profession of giving confidence to clients. Those things do well with physical meetings and physical contact’, she says. ‘I feel that clients will still need hand-holding.’
The other area that Revell says could restrict new models of working is some firms’ determination to stick to the chargeable hour.
‘It’s been dying for the 42 years I’ve been in the profession but it’s not dead yet’, Revell says, noting a particular fixation with the billing model in the US.
He says that for those firms holding out for chargeable hour structures, there is a conflict between models. Flexible working benefits efficiency; people are less distracted and structure their days around other responsibilities such as childcare. However, doing the same amount of work in less time could leave lawyers open to losing out on bonuses determined by reference to the number of hours they have billed.
‘It’s a very weird way to remunerate people; the slowest and least efficient get the bonuses’, Revell says.
In the UK, Stephenson Harwood recently announced it was offering staff the option to work remotely 100 per cent of the time – but receive 20 per cent less pay as a result. A spokesperson for the firm told Global Insight that ‘we have a hybrid working policy which we believe strikes the right balance, with our people having the option to work remotely for up to two days a week and salaries remain the same’.
The firm’s spokesperson explains that ‘during the pandemic, for a small number of roles in our London office, we looked beyond London and recruited people who lived elsewhere in the UK. It enabled us to access and attract talented candidates who might not otherwise have been available to us. The packages we offered – including salaries, but also expectations – were different from what we offer our people who regularly work from the office in London […] We recently decided to open the option of fully remote working to existing employees as well.’
The pandemic has opened the door to more alternative business models. A number of virtual firms have sprung up in recent years, selling themselves as ways for lawyers to reap the benefits of flexible working without the constraints of a Big Law model.
These are building on the back of several firms operating alternative models, notably in the UK, which are now well established and which thrived during the pandemic.
One of these is Keystone Law, set up 20 years ago. Keystone is a dispersed firm: its lawyers work mainly from home, bringing in their own business, supported by a central team in London which now has 50 employees. Prior to Covid-19, Keystone founder and CEO James Knight says he wouldn’t have imagined that employees at the firm’s central office would have been able to work from home, but now there’s no pressure on them to come into the office.
‘There was always quite a strong demand from lawyers who liked the idea or people who were really looking for that true flexibility. Hybrid working isn’t actually flexible working, it’s just part home-working’, Knight says.
Law firms may, even more than ordinary companies, suffer from [problems with] talent retention. Talent attraction is incredibly difficult, more than before
‘The pressures that drive lawyers to Keystone remain largely intact. In that hybrid environment there’s less pressure on commuting but there’s the same pressure on office politics, billing targets and so on’, Knight adds, echoing Revell’s criticism of the chargeable hour.
‘Lawyers like the stress of legal work, they like the stress of getting deals done, winning and losing’, Knight says. ‘What they find is very negative stress is the constant pressure to perform under very difficult circumstances, many of which are not under their control.’
Knight believes the pandemic helped prove to many people why firms like Keystone have grown since their establishment – that ‘really good quality commercial work’ can be taken away from the office through the use of technology, especially tools like Microsoft Teams or Zoom.
Recruitment levels reported by the Keystones of this world were strong at the beginning of the pandemic, although Knight says the level of interest from potential recruits dropped off a little when work levels picked up. The ‘great resignation’ currently underway could well spark renewed interest from lawyers in the alternative model.
Knight says the sense of independence and ability to really serve clients is Keystone’s biggest draw.
‘We enable and allow the lawyers to do what they want to do most, which is working with the clients. We give them an unencumbered ability to do that combined with all the support and infrastructure of a conventional firm’, he explains.
Lawyers are supported to do the work they want to do, and according to Knight this engenders an atmosphere of positivity.
The dispersed firm model has so far proven most popular in the UK, but there are signs of similar structures being set up elsewhere in the world – including Australia and the US.
Even some large firms are waking up to offering alternative career paths while keeping lawyers engaged, and the pandemic has accelerated their thinking on this.
‘There’ll be a space for traditional law firms which will have more funky offices but they will still have that structure, then you will have those people who don’t like those structures and they will join those alternatives. The market has opened up for sure. The buyers are younger’, Hamzah says.
‘Law firms may, even more than ordinary companies, suffer from [problems with] talent retention. Talent attraction is incredibly difficult, more than before’, says Swinkels. ‘A lot of people do not join a law firm to become a partner. If we reconsider the model or the structure that’s why we’ll do it, to keep a law firm interesting for everyone.’
Littler now has secondment schemes with clients and has set up a contract lawyering service too. Although neither initiative is original, the fact that more and more firms now offer such opportunities shows the direction of travel even among conventional firms.
‘It’s an acceleration because of Covid, but it was already in the stars. You saw people already enjoying more flexibility’, Swinkels says.
Mental health and junior support
Amid the discussion about how many days staff and lawyers should spend in the office, and what that means for client service, is an underlying concern about what agile working means for wellbeing.
‘The last years have been really tough on the first-year lawyers’, says Hamzah. ‘We’ve had trainees who’ve come and resigned and we’ve never even met them.’
She says ZICO discussed putting in place a more structured mentoring system, but when work levels picked up this got put on the backburner.
The firm has, along with 115 other law firms and companies from around the world, signed up to the Mindful Business Charter in a bid to focus more on wellbeing. The Charter was founded in 2019 with 24 signatories, among them UK-headquartered international firms Addleshaw Goddard and Pinsent Masons, and doubled in size in both 2020 and 2021. It features four pillars focused around giving organisations things to consider, such as encouraging staff to switch off at the end of the day when working from home.
Have we adapted to what we’re doing for the long term, to allow for remote working? For most firms the answer is no
Consultant, Freshfields Bruckhaus Deringer; Co-Vice Chair, IBA Law Firm Management Committee
The Charter’s Executive Officer Richard Martin says that while he doesn’t know if the uptick in signatories during the pandemic is a direct result of Covid-19, he believes the Charter has relevance to pandemic and post-pandemic working.
‘For a lot of law firms the period of the pandemic was one of their busiest periods ever, so people just got stuck into doing it’, Martin says.
‘On the one hand the flexibility one saw with people being able to do their work around other things was great, but what it meant for a lot of people, particularly junior people, was that they felt they needed to be on call from 0800 to midnight’, he adds. ‘Human beings being habitual creatures, a lot of that carries on.’
Martin comes back round to the chargeable hour question, linking it directly with wellbeing.
‘The more the business model looks at junior lawyers as being generators of fees – “there’s an asset from whom we can extract X pounds per hour” – the more we’re in danger of losing sight of the fact that simply because someone has qualified does not make them a finished product’, he adds.
Revell and Swinkels both say it is important for law firms to actually ask their associates what they want from the new flexibility, rather than assume.
‘There is always this type of lawyer […] who wants to be in the office. They will always be there and they will always go for the big conservative firms because they like this atmosphere’, Swinkels adds.
‘Whether or not the conservative firms change depends on how vocal their associates will be. We attract people sometimes from top firms just because of the flexibility we offer’, he says.
Revell says he’s as concerned about supervision and training, and believes this is an issue for junior lawyers too.
‘Have we adapted to what we’re doing for the long term, to allow for remote working? For most firms the answer is no’, Revell adds.
Martin agrees that the pandemic has not helped deal with the endemic issues of work-life balance within the profession, especially if big firms are in danger of slipping back into traditional business models as a result of client demand.
‘We know that the ways in which law firms have practised for many years is very damaging to people’s health and in some cases is killing people. If this was any other profession the legal profession would be all over them’, Martin says. He doesn’t believe that the damage being caused to people is being taken seriously enough, either by regulators or those that are responsible for working cultures.
Despite these concerns, there is consensus that the fundamentals of the law firm business model will remain.
‘The pandemic and the lockdown have brought along the use of Zoom and Teams by quite a number of years and have brought forward the whole remote working side, but I think there’s always going to be that pressure while you still have a conventional structure in terms of salaries and partnerships […] for those who are ambitious to show their face and get ahead’, Knight says.
Revell says while technology has aided the agile working revolution, it’s still easier to achieve efficiency in an office with IT support on hand, and this could eventually also have an impact. This is likely to also exacerbate the squeeze on mid-tier firms, prompting further consolidation at the top end of the profession and specialisation among smaller firms.
Ultimately, client demand – as always – will drive the future business model of law firms. If firms can successfully convince clients they can provide as good a service remotely as in-person, there’s no reason why they shouldn’t become truly agile. But there needs to be a desire and commitment to achieve this.
‘Different firms will end up with different levels of remote working’, says Revell. ‘The larger, high-end work firms will probably slip back into old ways and they will probably justify that on the basis that it’s what the clients want.’
‘We are driven by what our clients want and need in terms of the way we work. As they change we change, but sometimes they change much slower’, Hamzah echoes.
The pandemic has accelerated this change, but that change is far from complete.
Joanne Harris is a freelance journalist and can be contacted at email@example.com