If you run a law firm, you’re probably more focused on acquiring clients and closing cases than anything else. After all, a legal practice is still a type of business that needs cash flow to survive.
However, unlike other businesses that sell physical, manufactured goods, law firms provide expert services to their clients. In other words, a law firm’s capabilities and value are dependent entirely on the people who make up the firm.
That’s why human resources, or HR, is a fundamental aspect of keeping a law firm
But that’s no reason to ignore your internal functions that support your business as a whole. If you run a legal practice, here are the top five HR functions that keep your business running and thriving.
If your lawyers leave, they take with them their wealth of experience, knowledge, wisdom, and sound judgment. Clients would hesitate to do business with inexperienced lawyers, and cases may be dropped or mishandled due to a lack of skill. That’s why, as with any highly specialized service industry, employee retention is by far the most important HR function for law firms.
Though Decipher Intel reports that the average turnover rate among Am Law 200 firms is as high as 26.3%, HR teams at law firms can reduce employee attrition by building a company culture that values employees as professionals and individuals rather than simply a cog in the legal machine, and working to improve employee fulfillment.
Now, building a strong company culture and effectively managing a workplace can be quite a tall order, especially for a smaller and budding legal practice. If you’re interested in learning more about creating and managing a positive workplace, check out humanresource.com for tips on improving communication, well-being, and employee management.
As your legal firm grows, you’ll need to attract new talents to support your expanded functions, whether that means more associates, equity partners, non-equity partners, or support staff for each of your lawyers.
Besides retaining the skilled workers you already have, the second-most important HR function is sourcing, vetting, and onboarding new talent to support your legal practice’s growing operations – in other words, employee recruitment.
To hire new employees, HR must create and promote appealing job listings in the correct spaces, identify qualified candidates, attract them to the firm with appealing compensation packages, and ensure the new employee’s smooth transition into their new role.
With an HR department that can quickly and effectively complete this function, a law firm can be sure that new employees will be well-suited to the company’s work, bring new talents and insights, and serve as a beacon of hope for your firm’s future successes.
Learning and Development
Alternatively, even if the firm can’t source new, talented employees to cover its weak areas, HR can still help the company stay agile and successful by designing and implementing employee training programs to teach new skills to current employees.
Though you may not be able to teach old dogs new tricks, your lawyers are smart and clever enough to learn whatever new skills and expertise your company requires, provided they have adequate training and practice.
That’s why it’s HR’s job to conduct performance reviews, identify gaps in your workers’ knowledge base, and, with the help of managers and senior team members, create training programs that will improve your lawyers’ overall skill level and talent base. You can do this through designed seminars, classes, mentoring programs, and training exercises and activities.
Not only will your company’s efficiency and productivity improve as employees can do more types of work, but your employees will also feel engaged and valued at work, improving retention. A win-win!
Plus, learning and development programs aren’t strictly confined to legal acumen – HR can also improve internal management functions and operations by teaching employees tips and tricks for document management, case file storage, and legal software. A firm-wide case file management system removes data silos in your company and improves cooperation between partners, increasing the company’s flexibility and effectiveness.
In the old days of smaller legal practices, it was generally inferred that a young legal associate joined a law firm with the implicit promise that if they worked hard and stayed with the company, they could reasonably expect to be promoted to a partner one day.
Nowadays, with larger legal firms employing up to four or five thousand lawyers, it’s no longer feasible to promise partnership status to every associate. Furthermore, the modern market has trended away from the practice of lifetime employment to a single company – most associates likely aren’t planning to stay at a single law firm for the rest of their lives.
That’s why it’s HR’s job to create alternative career progression paths to attract, engage, and retain qualified associates and employees. For example, HR could track a career path and develop training programs to help associates develop their skill base for non-traditional legal positions, become consultants, or prepare for a more advanced legal degree.
Benefits and Compensation
Finally, HR departments in law firms manage employees’ benefits and compensation packages, which contributes to daily motivation and overall retention at the firm.
Now, some may think that benefits and compensation simply mean paying your lawyers a competitive salary on par with competitors. However, the reality is that some things are more important than money – non-monetary benefits such as vacation days, remote work opportunities, and fringe benefits can be more than the sum of their price tags to potential employees.
According to the 2023 Thomson Reuters State of the Legal Market Report, 26.5% of practicing lawyers have left or are considering leaving the profession due to mental health, burnout, or stress. They also report that post-pandemic, a large portion of employees are reluctant to return to the office.
That’s why, on top of paying employees a competitive wage, it’s also important for HR departments at law firms to carefully assemble a compensation package with appealing non-monetary components such as ample vacation and sick days, overtime pay, health insurance, parental leave, flexible work arrangements, and retirement savings plans.
Rather than simply attracting skilled employees with money, a comprehensive compensation plan can ensure workers are enthusiastic and healthy on a day-to-day basis, preventing burnout and increasing overall productivity at the law firm.
The most important resource for a legal practice is its human resources – in other words, its employees. It’s the duty of the HR department to hire, retain, and train qualified associates and partners. That’s why decision-makers at legal practices would be wise to invest thoroughly in their firm’s HR departments, building a skilled workforce that will close cases quickly, accurately, and efficiently, lead your law firm to success.
Martin Eckler is the in-house legal advisor for Step By Step Business and a commercial attorney.