A world beyond financial indicators

Financial indicators are no longer enough to measure performance – law firms looking to attract and retain talent need to perform well on a wide range of factors, according to Barry Davies at Douglas-Jones Mercer.

The legal sector, along with the world population, shared the initial wave of fear caused by the pandemic.

What is quite remarkable is how many firms have fared during this time. If we consider a few law-firm reports such as The Law Society financial benchmarking report, or Bellwether small-law in the pandemic report to name just a few, then financial performance seems very strong – with an overwhelming majority of firms reporting that they outperformed their own financial expectations.

With that in mind, should our focus as an industry extend beyond financial indicators? One challenge that has become a little more dominant during this time is the retention and attraction of new talent, with many seeking new opportunities to meet their own job satisfaction.

The most obvious expectation would be the flexibility to continue working remotely for some part of the working week. With Government proposals being suggested to allow new recruits the ability to request flexible working as a day-one right as opposed to waiting 6 months has caused much debate. What I have seen personally during the pandemic is that while working from home (WFH) has been an essential requirement, it’s also brought with it many new stress points, particularly when schools have been closed.

This, combined with larger workloads, can lead to a perfect storm of wellbeing issues. A far greater focus on mental health has emerged, and firms are having to adapt to new ways of measuring performance by allowing a greater level of flexibility than ever before. A common maxim is that if you are achieving the numbers, then all is well. But is this still true?

In a previous LPM column,  I commented that two thirds of the legal profession are experiencing stress and I recommended well-being KPI’s as part of a firm’s culture. An example is a lack of holidays being taken, as the remote working environment has led many to think they have to be perpetually available. Many are beginning to re-evaluate their position – evidenced by reports in the press of ‘The Great Resignation.’ Job satisfaction is no longer pinned solely on a high salary, it also depends on flexibility of working arrangements.

There is also an expectation from younger recruits to address a far wider range of issues – such climate change, equality, and a meaningful contribution to society.

Balance is key to managing performance amid the accelerated pace of change that the pandemic has brought about. Working in any regulated environment comes with great pressure upon managers – many of whom have new team members – to supervise, so the need to ensure a balanced dashboard is greater than ever.

There must be a great element of trust in managing those who you might not physically see every day and a degree of cultural performance measurement tailored to each. Key performance indicators are still a motivational driver for both the firm and the individual, but a more holistic approach is needed now.