“War for talents” in the legal market?

It is legitimate to conduct this discussion in a contradictory manner, i.e. to advocate either technology or people. This is not expedient, however, because both resources will always be required, which merely raises the question as to which resource we use for what (cf. How a simple “or” becomes an innovation killer in the legal market). Thus whoever is of the opinion that we (only) need human legal advisers should at least take good care of this resource. This brings us to the issue of personnel management and leadership, which has to be equally relevant to all executive staff in the legal industry, i.e. for champions of and resisters against digitalisation in the same measure, and which will become even more important in the future.

A few thoughts about the issues today’s executive staff should deal with:

• Generation change: We are all aware of the classic demand of Generation Y: work/life balance. Generation Z even goes a step further and additionally calls for a focus on values, diversity and sustainability, as well as meaningful – i.e. purposeful – work. Therefore employers should have a convincing explanation up their sleeve as to why they are the perfect employers.
• War for talents: It is in the nature of things that good employees are rare. By now, however, this explanation must also serve to justify a lack of success in recruitment and a high degree of staff turnover. If we claim a lack of talent, we should take a look at women talents. At present, more women are awarded law degrees than men. In purely statistical terms, there should be at least (!) as many talents among them who are available to the market. If they fail to join the value creation process, this is not a lack of the wished-for talented resources; rather, there is simply a lack of talents who are prepared to work under the framework conditions on offer. The title should therefore properly read: “War for talents willing to work under the conditions offered”.
• Recruitment and leadership strategies: Of course, employers can insist on traditional working (hour) models and expectations while trying to make new generations “fit in”. Such a strategy is unlikely to be crowned with success today. Instead, employers can lure them with higher salaries and fringe benefits. Research has revealed, however, that such extrinsic factors merely have a brief, if any, effect. If this even becomes the sole criterion in competition, employers become comparable and thus more quickly exchangeable, i.e. the grass on the other side of the fence will look greener more quickly (keyword: great resignation). I am therefore confident that employers will use any possible salary adaptations only as a quick fix and have other ideas about improving their attractiveness in a more sustainable manner.
• New work: The two years of pandemic have demonstrated that the unthinkable is possible: depending on the job, we are able to work quite well without any spatial proximity. Firms with locational disadvantages who require employees to move house or commute long distances were now able to offer attractive working conditions. In addition, this time provided employees with new freedoms and flexibility: they saved time through not having to commute, there were fewer dress codes, there was no direct supervision by superiors but flexibility for their own working rhythm, fitness, shopping, child care, etc. So far, so good. This could arguably be called Generation C19 (Covid-19) or Generation WFH, who are demanding remote work.

The “dark” side of New Work: The real workspace at home has shrunk to less than 1m². Furthermore, some other things have to be taken into account:

Firstly, employees appear to be blundering into the comfort trap. Understandably, they do not want to surrender their newly gained freedoms and flexibility any longer. In this way, however, they voluntarily reduce themselves to being transaction machines who only want to process orders. This entails them lessening their complexity and thus becoming more exchangeable. Additionally, employees should also consider the so-called “proximity bias”, which has already been observed in some American law firms. This means that associates who work in the proximity (i.e. in the office) are assessed more favourably than those who are encountered through the screen every now and then. This might become relevant when it comes to the next wage rise and promotion round.

Secondly, for the reasons stated above, employers are finding it difficult to get employees to return to their workplace after two years of corona and WFH. Some managers will have to resign themselves to the fact that employees can and must also be led and trusted at a distance. Other employers again may even consider this to be a perfect opportunity to reduce office space and set up open-plan offices in order to cut costs. But this is short-sighted, as well – unless the only thing demanded from employees is to process pending issues while disregarding everything else. If office space has been lost, though, it is likely to become difficult to get it back later on.

Finally, it must be taken into consideration that fundamentally, we human beings have remained cave dwellers: we need direct exchange (no: not via WhatsApp or Zoom). Many elementary interactions, creativity and innovation processes take place spontaneously between people on site. And this also applies to the establishment of a relationship of trust, in particular, which after all is of crucial importance to lawyers, who want to be “trusted advisors”. Thus this is not about whether employees should or have to return to the workplace; it is merely about determining the right extent in order to do justice to the requirements on either side while keeping an eye on the concomitant risks.

Prospects

It is incumbent upon employers to initiate a constructive dialogue with employees which optimally takes both sides into account in order to avoid the disadvantages connected with WFH. Transparency and mutual consideration may help to ensure that the human relationships that are important for work are not unnecessarily encumbered. They can work together reinvigorated instead, for both sides will depend on each other in the future, too. This brings us back to leadership skills and the imperative investment in human resources – with or without a focus on technology (for lawyers: Legal Tech). For only in this way will employers succeed in the frequently mentioned war for talents.