The battle for talent: How regional and boutique firms compete

Senior leadership teams in law firms have a real dilemma. They are under relentless pressure to deliver strong profitability year on year. Partners need to be motivated and feel they are getting a decent return to compensate for all that hard work and stress.

Profitability is seen as a key performance indicator in the market and it's important for a law firm to report PEP which compares well with its competitors. The legal press publishes all the numbers, so there is no place to hide - this increases the pressure even more.

Profitability is key to attracting and retaining top quality people at all levels and paying them commensurately, which enables firms to compete at the highest level. Profitability is also critical to enabling a law firm to invest in its infrastructure - top quality premises, HR, BD and marketing, financial systems, and technology.

But managing partners are also acutely aware that in the battle for talent they must also offer a highly attractive and motivating working environment. Lawyers - especially the so-called Generation Y - can be fickle and are increasingly mobile.

As well as good pay they rightly expect all sorts of other things. In particular they want to be at a firm that is a really great place to work. They want it all - but can managing partners really deliver all this?

Are profitability and being a great place to work really mutually incompatible?

At Stevens & Bolton (S&B) we are very familiar with this challenge. For those who don't know us, we have one office in Guildford, just outside London. We have 200 people, including 125 lawyers. Many clients are based in Surrey but also in London, rest of UK and overseas - generated through our relationships with independent law firms in Europe, North America, and elsewhere. We are often described as the 'City firm based just outside the City'.

We aim to provide a top quality service, but we face a major challenge in recruiting and retaining high quality people able to help us achieve this. One of our strategic objectives is to deliver sustainable and profitable growth. We have increased profitability every year over the past 6 years, gradually rising from PEP of £280k in 2010 to £415k in 2015. Turnover in the same period has risen from £15m to £22.3m.

Delivering this growth has been challenging, particularly since we have also set ourselves another key objective which potentially conflicts with the drive for profitable growth - namely making our firm a really great place to work.

Why being a great place to work isn't just a 'nice to have'

Being a great place to work is strategically essential for us, not just a 'softer' additional benefit. We must attract and retain top quality people, and yet the battle for talent in the legal market gets more difficult every year. We are looking for the sort of people who typically aspire to, or already work at, big City and national firms, with top academic credentials and ambition. We face a real challenge competing for these people, based, as we are, just outside London, and cannot compete with those types of firms on pay.

Our charge rates are significantly below top City rates - this gives us a competitive advantage for clients by offering value for money, but prevents us from matching City pay scales for our employees. So how can we attract and retain the best people? Happily, in our experience, not all top quality lawyers are motivated solely by money. While we offer the best possible rates of pay that we can - we aim to pay at or around the top of our market - we also try to offer lots of other things which we hope will help make our firm a great place to work, where people are happy and motivated, and see us as a good place to build a long term career.

Things that might help

So what can firms offer, on top of decent pay? Quite a few things.

The ubiquitous work/life balance!

Some lawyers are workaholics and have no life outside work. This is fine if they are happy with this - and some are. Many others are not. Sadly, recent figures from the legal charity LawCare show the extent of pressure many lawyers feel, with 75 per cent of lawyers calling its helpline last year reporting debilitating stress due to work.

Actively and positively managing people's welfare is an area where I believe the smaller non-City based - and potentially more nimble - law firms can steal a march on the bigger law firms which are well known for their culture of long hours and often struggle, despite their best intentions, to deliver work/life balance. Ensuring our people have a life outside work is at the core of our strategy. People work extremely hard when they need to - the job of a corporate transactional lawyer, for example, is never going to be 9 till 5, wherever you work.

But people at our firm do have lives outside the office. A lot of us, myself included, have worked for many years in big City law firms. We remember what it was like - the relentless hours that had to be put in, on top of long commutes, which left little or no time to pursue other interests or family life. In my own case and that of numerous others, S&B recruits from the City living in or around Guildford - a town full of City lawyers - a key reason for moving to S&B was to get rid of the daily commute and see more of the family.

Beyond the commute, there are other factors law firms can embrace to help their people achieve the holy grail of a better balance between work and home life. You don't always have the answers yourself; we recently carried out an employer branding exercise, using independent consultants to ask our people what it is about the firm that they like and which, in their view, would appeal to others when considering whether to work here.

The result was ensuring that our promise to uphold a work/life balance is enshrined in our brand statement and written for all to see (you will find ours on the recruitment page of our website). Put simply, a lot of lip service is paid to work/life balance. Good intentions are a great starting point but it is essential that a firm's culture should respect and support this, starting with its leaders.

Culture of openness

It is essential to be open with people at a law firm. Lawyers can be cynical people, but at the same time they need to feel involved in the business and to know what is going on. We are fortunate in being quite small and compact, all under one roof so it is inherently easier for people to know what's happening here, compared to firms with multiple offices and much bigger headcounts.

We try hard to take full advantage of this by being as open as possible about the business. We report regularly on our financial performance. We involve everyone in the firm in discussions on our strategy and provide regular updates on our progress in delivering this - and every year I address the whole firm to report in detail on the year just gone and set out our objectives for the year ahead. We encourage input and feedback right across the firm. Openness is also critical to our career review system. Any difficult issues are raised openly, including performance and promotion prospects (or lack of them). People have commented that this level of openness and honesty compares well with many other firms where they have worked. This helps with cohesion and engagement.

Remember you're offering a career, not a job

It is often said that lawyers are high maintenance people, who need a lot of looking after! There is definitely some truth in this - after all, we are talking about bright, ambitious people who are striving to build successful careers. Structured career development, including annual career reviews, is required at all levels. Well planned and structured learning and development programmes are also very important.

Our L&D programme covers not just technical legal skills but also business skills - presentations, networking, use of social media and how to deal with difficult clients (and colleagues!) Wellness programmes also feature and these are well attended. We invest heavily in all of these.

Sometimes less formal, simple things can also go a long way to motivating lawyers. These include keeping a careful eye on people in each team, thanking people for doing a good job, regular team meetings to talk about what's happening, and plenty of social activity - informal as well as formal. Sport, music, quizzes all play an important part in bringing all our people together.

All these things can make a real difference in helping people feel looked after and valued. It sounds simple, but can sometimes be hard to achieve in practice. Law firms tend not to be good at it but it's important to try - and people really do appreciate it.

Partner behaviour

Partners, especially senior partners, often don't realise just how important they are - or should be - as role models within a law firm. What they say, what they do, how they behave and even their body language are really important. Everyone notices. If they say one thing and do another people will notice. This can undermine morale and confidence and can be extremely damaging. Ensuring partners behave in a consistent and motivating manner is therefore critically important.

We have agreed benchmarks for partner behaviour which are published on the intranet and reviewed as part of career development, including 360 degree feedback. We have due regard to these when appointing new partners, whether by promotion from within or lateral hires. Over the years we have successfully recruited a number of lateral hires into the firm, many from City firms.

We have developed a good feel for the type of people we want to appoint as partners - collaborative, supportive, 'nice', no big egos, no political types, and no silos. This is at least as important as business 'following' - however exciting the latter, we would not appoint someone unless they meet our requirements on cultural fit.

Flexible working

This remains a hot topic in the legal market, not surprisingly. It now seems to be referred to as 'agile' working - where did that come from?! Our business is heavily dependent on working mothers who have to juggle many competing priorities in their lives. For some years now we have worked hard to accommodate reasonable requests for part-time working, flexible hours, home working, and the like. This is by no means perfect and we are currently looking at how we can improve things further, but we do not operate a policy of 'presenteeism' and we recognise that availability for client work does not necessarily mean people have to be present in the office. Often small adaptations to the working day can bring big improvements to people's lives - this in turn can create a sense of wellbeing and positivity towards a law firm.

Succession planning

This is something else that law firms can be notoriously bad at. There is however no reason why, as in any business, this should not be openly discussed. People care about their firm and they want to know that the leaders of the firm are proactively planning for future succession, in an orderly way. This is good for long term stability and engenders confidence in the future. Succession planning also, of course, generates opportunities for what we call 'next generation leaders'.

We have actively encouraged participation of 'next generation leaders' in the management of the firm, encouraging them to lead strategic working groups and similar projects to prepare them for future leadership. We also invest heavily in coaching and mentoring these people. All this can really help with long term cohesion and stability.

Can law firms find the Holy Grail?

As any managing partner of a law firm will testify, leading a law firm is definitely not easy and it is certainly not for the faint hearted! There are so many tricky issues that have to be addressed and overcome. Many of these pull in different directions and at times they can seem irreconcilable. We are definitely not perfect and we face the same challenges as everyone else in this extremely competitive market.

Trying to deliver strong profits whilst creating a really great place to work is a particular challenge. However, it is in my view worth trying really hard to deliver both, regardless of size or shape of firm. As a firm based just outside London, with a national and international practice, I believe that achieving this is a key differentiator which can help other firms to try to increase their share of the London market.

The UK legal landscape continues to develop apace - competition for client work will only increase and clients are becoming ever more sophisticated and cost conscious in their legal purchasing.

A law firm that can manage to deliver strong, sustainable profitability as well as creating a really great place to work, which its people are proud of, will be extremely well positioned to attract and retain the best talent. This, in turn, will enable it to deliver the best possible service to clients, without the disruption that continuous 'churn' causes, which will further grow its reputation and profile in the market and help attract further talented people - a truly virtuous circle.

We need to strive to be a 'happy ship' where people have fun and enjoy coming to work, as well as having fulfilling, challenging, and well paid careers. It might sound too good to be true - but it can be done.

Ken Woffenden is managing partner at Stevens & Bolton LLP (www.stevens-bolton.com)