The cultural gap

By admin - February 27, 2020

Culture was a standout theme in a recent survey of legal firms, having a significant impact on many other areas of a firm including the strategy and succession, governance and decision making, and technology gaps.

The respondents indicated that “54% of firms believe that the main driver for culture within a firm is the current partner group”. We were surprised that figure wasn’t higher as partners, or rather the partnership, shapes and drives the culture of the firm – under the stewardship of the Managing Partner/CEO.

A strong firm culture usually follows a closely aligned partnership culture. If this is not the case, there needs to be some challenging conversations. It is a time to be brave.

Partnerships need to be courageous enough to seek feedback – ask your staff and your peers. These people have their finger on the pulse when it comes to actual versus perceived culture. It is important to know what people are saying and this information is power. Embrace the positives and analyse the negatives. Are there minor changes necessary or is there a fundamental change management project that needs to be enacted to ensure that your firm is heading in the right future direction? It may mean bridging the “gap” between actual and perceived culture.

Conversely, vulnerability is important to a firm’s culture especially amongst the partnership group. Honesty amongst the group of people you have chosen to be in business with, the people you work with and the people that you often see more than your own family at times. Vulnerability creates strong relationships and ensures partners are all heading in the same direction with a clear understanding of what success looks like. If the partnership group is strong and cohesive, their prevailing behaviours drive the firm’s culture and become a part of the values of a firm.

To be more controversial – perhaps the basis for a firm’s culture can tend to be grounded too much on its remuneration structure. As most experienced professional services partners will know – there is no such thing as the perfect remuneration structure. There is however, a right one and a wrong one: that will or will not support the core values of the partnership, support the execution of the firm’s strategic objectives and ultimately determine the culture of the firm.

The survey highlights a gap between the majority of respondents seeing that they have a collegiate or collaborative culture (75%) and the 46% of remuneration structures driven by performance.

  • 75% have a collegiate of collaborative culture
  • 46% have performance driven renumeration

Successful partnerships should not be motivated solely by remuneration strategies because a profitable partnership may not necessarily be a happy partnership. Rather, they need to be built and driven by clearly articulated core values of the partnership, its desired strategy, and resulting remuneration structure to incentivise and reinforce the right behaviours. This is what drives a strong culture.

Equity and non-equity partners

  • 35% of equity partners are more likely to identify partnership culture as collaborative
  • 17% of non-equity partners identify partnership culture as collaborative

Non-equity partners more likely to select “do not know” throughout the survey, suggesting they, don’t know as much about their firm’s culture and challenges compared to equity partners.  This presents an opportunity to bring non-equity partners along on the partnership journey.

This article was published in Pitcher Partners 2020 Legal Survey. To access the full report, click here.

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