Indeed, “Second Chance” or “Fair Chance” hiring — when done right — is good for business. Companies can fill workforce gaps and reduce turnover, increasing productivity and cutting on-boarding costs. This practice also has community benefits and is a place where corporate value and social values dovetail. When people with criminal records are employed, economic activity and new tax bases are created, and public safety increases.

A 2021 survey of human resources professionals found that 81% believed that the quality of workers with criminal records is generally the same or better than workers without records, with nearly identical hiring costs. Studies have also shown that retention rates are higher, turnover is lower, and employees with criminal records are more loyal to their employers once hired.

Recent job openings reports from the U.S. Bureau of Labor Statistics showed thousands of open positions in accommodation and food services and in manufacturing — just two of the many industries in which talented people who happen to have criminal records could fill the labor gap.

Offering a second chance

Second-chance hiring is good for employers’ bottom lines in whatever industry they operate. Fortunately, many more business leaders are also recognizing the significant value in second-chance hiring. The Second Chance Business Coalition, led by Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co., and Craig Arnold, Chairman and CEO of Eaton, has brought large businesses into the space.  Corporations such as Walmart, McDonalds, Verizon, Accenture, and Koch Industries are among more than three dozen companies that have been brought together by the coalition to work on this issue.

When I was incarcerated, no one asked me for money, but nearly everyone asked me to help them get a job after they were released. Today, I work with businesses to help them develop organizational and risk management strategies to better recruit and retain people with criminal records.

A 2021 report from the Alliance for Safety and Justice estimates that one-third of American adults — roughly 78 million people — have a criminal record. The problem is even worse for Black men. A University of Georgia study found that, as of 2010, 33% of Black men had a felony conviction compared to 8% for all adults.

Unemployment also has been an inescapable by-product of a criminal record. The Prison Policy Initiative calculated that the unemployment rate for people with criminal records is over 27%. By contrast, the country’s overall unemployment rate currently stands at just 3.5%.

Expungement as a risk management tool

Expungement, or record-clearing, is a powerful risk management tool for businesses, but the system can vary drastically among states. For example, a minor drug offense in Florida can stay on a person’s criminal record for life, while a much more serious offense that involved prison time may be expunged in another state. When an employer performs a background check, the Florida person who never served a day in jail will be classified as a “felon” while the person who did years in prison will not.

Fourteen states now broadly allow felonies and misdemeanors to be expunged, while another 23 states have narrower expungement criteria for felonies and misdemeanors. Five other states allow expungement only for pardoned felonies and certain misdemeanors, and three states and the District of Columbia allow only misdemeanor expungement. Five states and the federal system have no expungement law. Without broad record-clearing laws, a person with even a minor criminal conviction will always wear that scarlet letter.

Broader expungement laws have risk management benefits as well. This creates additional issues for chief human resources officers, corporate general counsels, and employment lawyers. Most businesses will never learn of an expunged record, which generally adds additional protections against negligent hiring cases and creates no additional work for corporate staff. In contrast, when a background check has a criminal conviction, the business may have to take additional steps before it can hire the person under the Fair Credit Reporting Act, applicable state laws, and its own risk management strategy.

Without expungement, the risk management landscape is largely governed by state law. For example, Colorado law prohibits an employee’s criminal record from being introduced as evidence in a lawsuit against an employer unless there is a direct relationship between the criminal history and the underlying facts of the claim (Colo. Rev. Stat. Ann. § 8-2-201(2)(a)(I)). Florida — a state without a record-clearing process — protects employers from a negligent-hiring presumption in cases in which the criminal-records check “did not reveal any information that reasonably demonstrated the unsuitability of the prospective employee” (§ 768.096, Fla. Stat.).

Hiring and retention are core business functions and are not an option for companies to achieve success. Unlocking this relatively untapped talent pool can help businesses grow and thrive, creating profits for the business and benefits for its stakeholders, employees, and surrounding community.

Hear more about John’s work, his former legal career, and his journey from prison to expert on re-entry into society after prison on Episode 108 of The Hearing: A Legal Podcast from Thomson Reuters.

As a result, these topics will become part of the normal course of business discourse in 2023. More specifically, here are five ESG themes that will be on the horizon this coming year:

1. ESG takes two steps closer in becoming just “business”

At its core, sustainability is about using fewer resources — natural, financial, and human — to generate increased efficiency and effectiveness in business performance, while reducing risk and identifying leveraging opportunities. John Friedman, Managing Director of ESG at Grant Thornton, advocates for the idea of calling sustainability “business” and reframing it in that way, because “no matter what you call it, it is just smart business to understand and manage those things that are levers for attracting more customers and investments [and] engaging your workforce, which all drive profitability.”

To underscore that point, a recent Deloitte study found that more than half of executives said they anticipate benefits from enhanced ESG reporting, including increased employee retention (with 52% of survey respondents citing this as a benefit), improved return on investment (52%), stronger stakeholder trust (51%), elevated brand reputation (49%), and reduction in risk (48%). Indeed, Infosys research found a strong correction between ESG and financial returns and realized financial benefits, including the lower weighted average cost of capital, according to McKinsey & Co.

2. Return to office is so 2022

Hybrid work is here to stay, and employees continue to crave flexibility. In addition, there is emerging evidence that remote working does not automatically mean a lack of engagement based on recent research of metadata gathered from virtual meeting platforms from 10 large global organizations, spoiling one of the major arguments for bringing employees back to the workplace immediately.

3. Employees still maintain an advantage over employers in major markets, albeit a smaller one

The tight labor market is likely to continue in major markets, despite the expectations of a recession in the U.S. and Europe in 2023. A key factor behind this is that labor force participation rates in the U.S. and in Europe continue to shrink over the long term. Further, attracting retirees back into the work force and shrinking net migration rates in the U.S. and the European Union are unlikely to fill in the gaps.

Moreover, one-third of European workers surveyed in mid-2022 said they were expecting to “quit their jobs, even amid the destabilizing conflict in Ukraine, rising inflation, and [as] growing fears of hiring freezes and job losses have created a difficult set of conditions for companies.” Against this backdrop, the European Commission is seeking to attract and retain foreign talent in the region through the Skills and Talents Package, a set of operational and legislative proposals to attract highly skilled foreign individuals, that was established last year.

4. Power skills get the attention of corporate boards

There is a growing need in the nation’s workplaces to rebrand so-called soft skills and instead refer to them as power skills, which can be key to motivating and engaging high-performing teams consistently, especially in the aftermath of the pandemic. In fact, “executives and shareholders are now crystal clear on the value of the human side of leadership, meaning the capability to connect with others, show empathy and compassion, be inclusive and resilient, and excel even in uncertainty.” As a result, boards of directors now want even more involvement in workforce issues.

5. The “S” rising in importance

The momentum of the human side of business has been building since early 2020. In addition, elements of the “S”  are quickly becoming a key success indicator of an ESG strategy. These include workers’ well-being, executive pay increasingly being tied to diversity, equity & inclusion goals, and pay equity and transparency, according to Brian Bueno, ESG Leader at Farient Advisors.

Jenn Ramirez Robson, Vice President of Employment Services at disability inclusion nonprofit Northwest Center, and Gayatri Joshi, former Executive Director of the Law Firm Sustainability Network and Partner at Vorgate Legal ESG Impact, both say that pay transparency and equity are emerging as issues of increasing importance, even as jurisdictions enact additional laws.

In fact, concentrating on the individual well-being aspect of ESG highlights other areas of ESG, such as a critical focus on the environment, Joshi explains. “When we can give respect and equity to all people, the S paradigm will often shift to support E.”

One aspect of how society gains greater awareness of environmental sustainability is through its impact on people, she adds. “When we don’t have equity, we don’t have equal power and choices, and it can translate to whether you can afford to live in a place free of pollution and climate risks or affording healthy food. It’s one of the reasons why the S is so important — we need all those stakeholders to have power and have a say.”

As we enter 2023, business will continue to become increasingly human-centered, and as a result, ESG and workers will keep moving to the forefront, gaining critical attention and importance throughout the coming year.

We spoke to Marsha Huber, Director of Research at the Institute of Management Accountants (IMA), and a pioneer in this emerging area of study since 2014, about the key findings from her neuroaccounting research.

Understanding the brain & how accounting expertise is developed

In the beginning, a novice learner, such as an accounting student, has a lot of technical knowledge and neurons in the brain that contain bits of knowledge. However, these neurons have not yet developed into neural networks that enable learners to connect the dots and weave concepts together. “A novice auditor can follow checklists, but it takes a few years for the neurons in the brain to form networks to fully grasp the knowledge to the point where they can tie concepts together that they could not have done as a novice,” says Huber.

As accountants build their expertise after 10 years in the profession, the neural pathways expand and grow together. This is why an audit partner has the ability to forecast potential problems and determine mitigating plans and actions before they occur.

Huber’s electroencephalogram (EEG) studies of the brain with accounting students and their ability to identify relevant and irrelevant financial accounting terms provides proof. The novices’ brains did not recognize accounting terms that did not fit within a particular financial accounting schema. The more experienced students’ brains, however, did identify the irrelevant terms despite not being asked to do so.

Key takeaways for team managers & accounting employers

By using the insights from neuroaccounting, accounting team managers and accounting industry employers could maximize team performance and engagement among their professional workers. Some of these key concepts include:

Understand learning is nonlinear and grows in spurts — The basics of learning are irregular and vary among learners. Indeed, it takes time to learn, and the brain also learns in context. A novice may not be able to apply learning to different contexts, whereas an expert can. In addition, a learner’s knowledge grows in spurts. Learners often forget what they initially learned, but as time goes by and the brain makes better sense of things, the learner will level up.

Learning can occur during a class for one person, when working in a group for another, and still, working independently for someone else, according to Huber. As knowledge develops in learners, accountants can experience mini a-ha moments when new knowledge breaks through to the conscious mind from the subconscious mind. Insights tend to come when not actively working on the problem.

Increase the creation of “flow” time — Huber recommends that accounting employers create opportunities for employees to experience flow. “Because of neuroscience, we understand that being ‘in the zone’ or ‘flow’ can produce exceptional output,” Huber explains, adding that this practice and bring amazing feelings of energy and focus to work.

Activities that enable flow are having no-meeting days and taking breaks, such as siestas, in the afternoon. Employers should allow employees to block off uninterrupted time to create time for flow.

Investing in time for rest allows for incubation, where neurons can figure out better solutions and develop the neural networks of expertise. In a study that Huber conducted, she found that accounting students napped more than professionals (and other students), hypothesizing that they needed to replenish the energy they expended while learning complex content.

Learning on the job is a recipe for success for accounting professionals, of course, yet it also makes sense to remove the stigma of napping and allow for incubation and the neural networks in the brain to build expertise from the learned experiences during the day.

Understand the brain science of manipulation on accountants’ ethics and decision-making — Finally, understanding the implications of neuroscience indicates that some accountants are more prone to being manipulated than others. “Mirror neurons” in the brain unconsciously will cause some to mirror or imitate the actions of others.

This has implications for the accounting profession. Researchers studied this phenomenon in controllers. In essence, because of the way the brain thinks and functions, friendlier controllers could be manipulated more easily than unfriendly controllers. Controllers that mirrored other people were more likely to make questionable ethical decisions when pressured by others.

Managers of accountants also benefit from neuroaccounting in team assignments — Huber highlights the key takeaway of her work: That managers need to understand better how their teams are wired and play to each team member’s strengths and preferences through four profiles, which are:

1. 1. 1. Clarifiers ask a lot of good questions to get the group moving in the right direction from the start;
      2. Ideators like to brainstorm and explore new ideas;
      3. Developers identify pros and cons and enjoy developing mitigation plans; and
      4. Implementers prefer to focus on execution.

To put this into practice, managers could give new problems to clarifiers to clarify challenges, then, hand the challenge to ideators to brainstorm solutions, who send potential solutions to developers to analyze pros and cons and recommend a way forward to address the problem, and finally, hand it off to the implementers to execute the plan.

As an advocate and researcher in neuroaccounting, Huber says she hopes that an increased understanding of how the brain learns will enable more efficient training practices and help to close the talent gap in finding employees for current entry-level roles in the tax & accounting profession.

“We aren’t using neuroscience to train our people at all,” Huber says. “And if we used neuroscience and understood it, people would learn better, and we would teach better.”

These preferences can be attributed to generational or gender differences, personal style or cultural preferences, individual reluctance to stray from their comfort zone, or feeling for better work/life balance.

If it was not clear before, the conditions and restriction placed upon workplaces during the global pandemic exposed the truth that the mindset of only one way — no options — is neither fair nor ultimately workable. Leaders need the ability to manage people with unique identities and from different generations and holding different performance capabilities. Then, leaders need to customize their interactions to each person’s uniqueness.

In the past, workplace norms were changed most quickly when clients demanded it, such as having women in firms on client teams and in leadership roles, or more recently, for flexible work arrangements. In general, with notable exceptions, clients have tended to be more open to flexibility on how and where professionals work and to diversity and inclusion factors, including generational preferences, than have their outside firms.

Carefully thought out approaches by practice leaders, managers, and the direct supervisors of matter and engagement teams within law and tax & accounting firms can help fuel the feeling that each individual belongs in the organization.

Working through the hybrid challenges

Not surprisingly, hybrid work adds complexity to internal relationships, especially those meant to serve and build connections with clients. Physical limitations — such as not being seen in the room and less opportunity for casual and spontaneous conversations — will decrease some professionals’ opportunities if not proactively dealt with by management. In particular, limits on physical proximity can lead to “familiarity bias” and “proximity bias,” which can lead to an out-of-sight, out-of-mind attitude from firm leadership when assigning work.

Those professionals working virtually also can have fewer opportunities to share their perspectives. That means that intentional effort must be made by managers to ask for their feedback during team and group meetings.

Norms around professional standards can also get murky over time, especially if there is no intentional scheduling of coaching, training, mentoring, and apprenticeship for business development. Without these career advancing practices, employee expectations and any desired upskilling can suffer because employees have fewer informal opportunities to develop relationships internally at the firm and with clients.

Actions for leaders & aspiring leaders

How leaders and managers can resolve the tendency to push employees back to pre-pandemic norms and mindsets that no longer serve personnel and firm goals is a necessary question with complex answers and a variety of related concerns over where and how work gets done. Some differences can raise strong emotions, including: the differing needs and desires among parents and non-parents; and among those workers who enjoy the camaraderie and nurturing relationships of an in-person workplace and those who don’t care about that as much.

Of course, the question of how those employees who are new to the firm, especially newly minted lawyers, can acquire the needed orienting and mentoring is vital, as is how they can make themselves and their skills known to the more seasoned lawyers. For many, it’s not a generational issue as much as it’s being driven by external motivations and the other factors.

To create better outcomes, law firms and tax & accounting firms need to increase their investment in developing managers at all levels. Daily actions of supervisors, such as using team norms for engagement, seeking multiple viewpoints during group settings, and ensuring team members are accountable all should be daily behaviors. Consistently practices, these behaviors can go a long way to establish productive connections and effective micro-cultures of collaboration and respect among their team members.

Tips for leaders and managers

There are several actions and changes in behavior that leaders and managers can undertake now to gauge the work preferences of their employees, including:

• • • ask questions to establish a more accurate view of preferences and needs without assuming that one size fits all;
    • conduct internal research on the expectations and wants of each generational cohort and level of hierarchy through one-on-one conversations or short surveys if possible;
    • encourage cross-generational discussion because the time spent will pay off in many essential ways;
    • assemble a multigenerational group of leaders and high potential professionals to have candid discussions in an environment of psychological safety; and
    • agree on a short list of desired leader attributes.

Importantly, law firms and tax & accounting firms need to realize that their leadership is situational and revisiting the needed leadership attributes and policies every few years (if not more frequently) is a good idea.

While the impacts of the still on-going pandemic are still being felt, adjusting to living with these changes long-term requires a mindset from all generations. Simply demanding that everyone returns to the office full time is not a workable strategy that will allow firms to retain their most desirable talent. Instead, showing an openness to changing needs is most likely to produce the kind of work environment that sustains and retains valued talent and is productive and profitable long-term.

Looking over the past year, three key themes — around client feedback, talent management, and law firm business development — strongly resonated in our columns and throughout the legal industry.

Leveraging client feedback

Learning what clients are thinking by way of formal client listening programs or feedback opportunities was an especially potent manner in which law firms sought to improve their client relationships and demonstrate their value to clients over the past year.

Whether gathering feedback at the client interview stage or in post-pitch discussions, receiving feedback from clients around what the firm and its lawyers did right or wrong, how the firm’s client service could improve, and even what competitors were doing it better may lead to some uncomfortable questions, but such client insight can prove extremely valuable to the firm’s performance going forward.

Further, a two-part series of columns on client listening programs showed how valuable those can be to a law firm’s own bottom line, detailing how clients spend twice as much with those law firms that ask them for formal feedback than with those that don’t. The series also discussed the typical barriers that exist to establishing client listening programs, most significantly, of course, trying to engage firm partners in the process.

Talent & retention

Not surprisingly, finding ways to keep key legal talent was quite possibly the top concern among law firms and other professional services firms throughout 2022 — and our Custom & Advisory columns certainly reflected that.

Indeed, it became clear as the year went on that legal talent had become extremely mobile, and many lawyers, especially younger associates, were switching law firms with increasing frequency in order to find a good fit that met their needs. Interestingly, while the legal industry initially thought throwing more money at these associates would solve their retention problems, it seemed there was much more at stake in the minds of these associates.

Numerous industry surveys showed that among associates, compensation ranked lower as a reason to stay at their current firm. Much more important in their minds was the firm’s culture and leadership, according to our research.

This meant that law firms needed to look for incentives beyond compensation to retain their top legal talent, such as improving how fairly associates are treated and how much they are shown respect by their current firms — both of which ranked very high on the list of reasons why an associate would choose to leave or stay at their current firm.

In our surveys, associates also noted that they are most likely to leave a firm if they perceive a lack of opportunities for career growth. This insight was extremely valuable to those law firms that were concerned about lawyer retention because it gave them one clear area to address by offering more career development, networking, mentoring, and training opportunities. In fact, all of these factors contributed greatly to an enhanced sense of well-being among lawyers, something too that law firms would be wise to promote in order to keep top talent from leaving the firm.

Business development strategy

As the legal industry (and the rest of the world) moved past the worst of the global pandemic throughout 2022, those law firms that embraced remote and hybrid working environments were now confronted with managing clients that had done the same, dramatically changing how lawyers and clients were interacting.

For example, during the pandemic and now going forward, it became clear that videoconferencing was far superior to phone calls with clients, allowing lawyers to better establish rapport more rapidly and greatly enhance the client relationship.

Another Custom & Advisory column picked up on the theme of improved client relationships by suggesting that a business development strategy that’s lodged in how the firm’s value is demonstrated to clients can be a way for firms to differentiate themselves from the competition. Clearly, all firms lay claim to having client-centric service, but only those that make that claim come to life by demonstrating at every touch point within the client experience will truly differentiate themselves, the column noted.

Like with many strong themes that emerged through our Custom & Advisory columns, embedding the demonstration of value within the client experience was not just a good-to-have mantra of today, but rather a necessary component for law firms if they were to continue forward successfully in the current environment.

Clearly, business development doesn’t just begin and end with finding additional ways to serve current clients. Law firms should be constantly on the look-out for new practice areas or service offerings that can help them add business from current clients and attract new ones. For example, the area of environmental, social & governance (ESG) has become a potentially lucrative vein of new business in compliance, corporate work, and risk management matters for those law firms that are early adopters.

As reflected in our Custom & Advisory columns published throughout 2022, the themes of client feedback, talent management, and business development greatly influence firm leaders’ focus over the past year. Moreover, these themes — and others that will be chronicles here — are likely to continue weighing on law firms leaders’ minds into the next year and beyond.

If you’re interested in learning more about some of the research used in our monthly Custom & Advisory column, and how this data can be applied to your firm, please visit here.

Yet, what can managers in the federal government expect for future workplace attrition, and what best practices can they adopt to better attract younger workers to the public sector?

The retirement “tsunami” is still to come

The federal government weathered the COVID-19 pandemic with less volatility than state or local government agencies in terms of employee attrition. Indeed, record job vacancies in the public sector were largely seen as the result of the outflow of workers in local government and public education, according to Bureau of Labor Statistics data from the 18-month period between February 2020 and August 2022.

And one 2021 assessment from The Partnership for Public Service, found that attrition rates hovered around 6.1% within federal agencies, with slightly more than half of those leaving left due to retirement. This number was a slight increase from 2020 numbers of around 5%, but in line with pre-pandemic attrition rates.

Of course, these stable numbers may mean that the tsunami of anticipated federal retirements has yet to really hit.

More concerning figures relate to federal workforce age and incoming federal employees. A 2021 White House report, Strengthening the Federal Workforce, reveals that the percentage of federal employees over the age of 60 continues to increase year over year, while employees under the age of 30 continually decrease as a percentage of the federal workforce.

Younger employees simply aren’t joining the federal workforce at the needed pace to provide adequate succession planning for upcoming retirements. A 2022 Qualtrics survey on federal recruitment of more than 1,000 recent college graduates showed that more than half of those surveyed would not consider a career within the federal government.

Is workplace flexibility the key?

Understanding why a public sector career is unappealing to younger workers is a necessary first step to address the issue. Perceptions surrounding how and where federal work takes place appear to be the culprit.

In the Qualtrics survey, the top three reasons given by respondents on why they wouldn’t consider a career in government included: perceived under-qualification, lack of work/life balance, and experience gaps in their resumés. While many recommendations have been made about enhancing federal recruitment practices to successfully attract a diverse candidate pool, federal agencies would be well-served to highlight the flexibility of work that is already offered within the public sector.

Flexibility in how and where work occurs can be a key factor for attracting and retaining younger members of the workforce within the public sector. Fortunately for recruiting managers, the federal workforce already offers significant flexibility to current and prospective employees.

The federal workforce has adjusted in the current post-pandemic environment to offer remote working options that are either fully remote or in a hybrid fashion. In fact, the Office of Personnel Management’s 2021 Government Wide Management Report found that 57% of federal employee respondents worked remotely at least once a week, up from 23% just two years earlier.

Employee experience matters

Cultivating a culture where employees have the flexibility that they desire to achieve better work/life balance, and where they can feel connected and valued by their managers may seem like a daunting task to many government agency managers. However, managers can ensure that their culture puts people first by implementing several recommend best practices, such as:

Focus on building and maintaining connection with team members through short, regular check-ins — For remote or hybrid employees, managers can pre-schedule intentional meetings with a clear focus area.

Establish “buddy” or mentor programs to link up new and veteran employees within an organization — Programs that match new employees with peers (rather than supervisors) acknowledges the fact that employees may feel more comfortable asking some questions of a peer rather than their direct supervisor. Likewise, the mentor can provide the new employee with valuable insights about organizational culture. Mentorship programs also can be redesigned for remote or hybrid employees.

Offer diverse learning and professional development opportunities — The rise of hybrid and remote work has contributed to “Zoom fatigue” for many. Offering professional development opportunities that are a mix of webinars, in-person, or self-paced learning modules reinforces that employees are valued, while not contributing to the exhaustion that overuse of virtual video conferencing tools can generate.

Understand how your employees learn — Hand-in-hand with the point above, not all humans learn in the same fashion. Four dominant learning styles include aural, visual, kinesthetic, and reading/writing. Implementing learning style assessments into employee pre-boarding can help managers best understand how to most effectively train and on-board new hires.

Remember that team bonding is still important, remotely or in-person — As full-time in-person work continues to decline, some organizations have empowered employees to spend time together outside of work by volunteering, socializing, or even sharing a meal together. A lunch traditionally spent together in-person can be recreated by supplying remote employees with a gift card for food delivery or to a restaurant of their choosing. Managers also can prioritize scheduling a shared meal for hybrid employees when they are in-office.

Finally, it’s important to understand that the federal workforce has not experienced the rapid outflow of workers to the same extent that state and local government organizations have in the post-pandemic era. Yet, that doesn’t mean critical challenges around talent have been avoided for good.

In preparation for the upcoming retirement of aging members of the federal workforce, managers should consider adjusting their management style to be more people-centric and considerate of increasing remote and hybrid work preferences.

Indeed, as global economies moved away from the worst of the pandemic, it seemed early on that 2022 could provide a sense of normalcy, if not a return to traditional business practices. However, the rocky shoals of the war and global economic turmoil soon put an end to that sunny thinking. Yet many professional service firms and their corporate counterparts in the US and around the world found ways to remain profitable, resilient, and forward-thinking enough to allow some positive direction as we all head into 2023.

The Thomson Reuters Institute, through its blog posts, podcasts, market reports, and in-depth analysis, has chronicled many of the changes that swept through the last year, offering insights into how many organizations are adapting and what solutions are being successfully utilized.

If there were trends to discern in this very busy year, it was that twin issues of talent and technology implementation were impacting corporate departments and professional service firms to a greater degree as the year went on. And some of the most-read pieces on the blog site reflected that. For example, one piece that was very widely received described the different power skills that allow employees to flourish in new hybrid work environments; also, the changing regulatory stance toward the practice of law, especially around whether non-lawyers can own law firms, was of keen interest to our readers.

Further, many law firms, government agencies, tax & accounting firms, and corporate departments were beginning to grasp that the technology needed to meet the growing demands of the digital economy was of paramount importance. Indeed, as we moved toward the end of 2022, it was clear that technology adoption and maximizing its use simultaneously was among the biggest challenges and most promising opportunities that organizations are facing going forward.

Key market reports & in-depth podcasts

Throughout the year, it was the goal of the Thomson Reuters Institute to bring together people from across the legal, corporate, tax & accounting, and government communities and ignite conversation and debate in order to shed some insight on the newest industry developments and the most critical opportunities and challenges market participants are experiencing.

You can explore our top trending Thomson Reuters Institute insights that shaped 2022, or you can relive some of our highlights from this year here. And for further coverage of the legal, tax & accounting, corporate, and government sectors, visit the Thomson Reuters Institute.

We did this in part by providing coverage of these topics on the Thomson Reuters Institute blog site — such as podcasts, videos, and key market reports — and by hosting world-class events, which kicked off in Amelia Island at our 29th Annual Marketing Partner Forum, which brought together global law firm leaders and the best strategic thinkers from around the world to discuss the steep challenges facing firms in the legal market; and continued in New York City with our 21st Annual Law Firm COO & CFO Forum, along with many more in-person and virtual events throughout 2022.

As our reach expanded over the year — the Thomson Reuters Institute blog site reached more than 1 million annual page views this year for the first time in its history — our coverage expanded as well. We created two new resource centers on the site, to accompany those dedicated to covering the legal, tax & accounting, corporate, and government areas. Our new resource centers — Environmental, Social & Governance (ESG) and Technology & Innovation — allow us to offer readers dedicated content and insight into those areas.

Throughout the year, the blog site offered a steady stream of analysis and market insight reports that shed light on what participants in the legal, tax & accounting, and corporate fields were experiencing in their respective marketplaces in today’s economy. For example, in the 2022 Report on the State of the Legal Market, we saw that the legal market has remained resilient, even though numerous key challenges remain for many law firms, including a hot market for legal talent that has driven up costs. Even so, the report showed that many law firms have managed the difficult market with a good level of success last year.

On the other side of the table, our reports on corporate law departments and corporate tax departments shed further light on the immense pressure these departments were under from their corporations to transform the way they operate, with special emphasis on working more efficiently and cost-effectively. Indeed, coming out of the pandemic, it appears the dramatic changes undertaken by corporations during that time — especially around talent management and adopting new technology — may only be the beginning.

Also, our series of twice-monthly Insights podcasts offered in-depth discussions throughout the year on topics ranging from the viability of the new cryptocurrency economy to the most common misconceptions in the legal industry around artificial intelligence, and from how financial institutions were managing Russian sanctions to how organizations can benefit from client feedback programs.

Now, as we move into 2023, the Thomson Reuters Institute will continue offering insight into the latest events and trends, bringing leaders together, and mapping out the opportunities and challenges facing corporations and professional service firms going forward.

Looking over the columns for the year, several key themes emerge, such as how firms can best move past the constrictions of the global pandemic and begin to address other challenges like evolving technology and the shifting world economy. Other columns offers firms pathways to improving firms’ practices, increasing efficiency, and becoming a true partner to their clients; while others offered key takeaways, gathered from top legal clients, on the overall legal market.

Thriving in a post-pandemic world

As 2022 began, it seem that the worst of the global pandemic was behind us and law firms and their corporate clients were moving toward what could be seen as a more normal, or at least traditional, way of doing business.

Several Insights in Action columns explored these developments, looking at how chief talent officers within law firms were dealing with the hot labor market, especially around issues such as securing associate retention and staying on track for return-to-office plans.

In fact, several best practices emerged as to how to better retain key talent, including: i) clearly defining how the lawyer’s role fits with the firm’s goals and what lawyers need to achieve to ensure their own progression; ii) offering lawyers more control and flexibility as to what, when, and how they work; and iii) supporting lawyers’ well-being, including offering training and health-related programs.

In fact, concerns over talent continued to resound within the legal industry (and elsewhere) throughout the year. As such, several columns addressed how firms can best utilize or leverage the resources they have to provide the kind of training, work/life balance, and employee well-being for which many lawyers and staff members were clamoring.

How to address key challenges

One column published in October detailed how law firms can best address the reasons that younger associates and others leave the firm they’re currently with to go elsewhere, either to another law firm or in-house to a corporate law department. While being provided with opportunities for career development and growth was cited by many lawyers as strongly related to the satisfaction they feel with their current firm, surprisingly, compensation was not cited as such a strong correlation.

Other concerns, such as being treated with fairness and respect; feeling confident in the firm’s overall strategy and in firm leadership; and having the support of higher-level colleagues, such as partners all were ranked as more important than compensation in lawyers’ decisions to either leave or stay at their current firms, the column noted.

And that is good news for law firms because addressing those concerns is much less costly than simply increasing compensation, even if it can be a bigger challenge. However, throughout the year Insights in Action didn’t shy away from the bigger challenges that law firms were facing and instead offered ways firms could best overcome these hurdles.

For example, a recent column described how offering clients quality legal services is no longer a differentiator that law firms can count on to separate themselves from their competition; rather, offering quality legal service has become an expectation on the part of clients.

That means, as Rachel Heathcote of Thomson Reuters Market Insights, pointed out, is that clients are looking for more from their outside law firms, and the data shows that such issues as responsiveness, expertise, and business-savvy all have increased as firm differentiators in the minds of clients.

“What it shows to me is that everybody is doing service really well, so nobody is standing out for their service — it’s not a differentiator, it’s just table stakes,” Heathcote explains. “So what we have to be careful about if you’re a law firm is that if you are delivering poor service, then there’s a danger of losing out to competitors that are delivering high service.”

Again, the data shows that clients may be seeking more active business value out of their law firm engagements rather than simply a good client service relationship, she adds.

What the legal market revealed in 2022

One of the key values of the Insights in Action columns were their take on the legal market overall and the insights law firms could gain from the market data and client surveys.

For example, one mid-year column addresses the seeming disconnect between clients and those lawyers they designate as a stand-out performer as to where they see the value in their relationship. The column expanded on a survey that had queried clients on what qualities in those stand-out lawyers makes them truly stand out; and, querying the stand-out lawyers themselves, on what they think clients value in them.

While clients rated lawyers’ expertise and technical acumen as top qualities, the lawyers themselves cited their service and close relationship with the clients as their top draws. Clearly, as the column noted, there is room here for law firms to shore up what their lawyers can offer by focusing on what clients are saying is most valuable to them.

Other columns explored other critical subjects, such as how clients are exhibiting growing optimism about their future legal spending, despite the current economic pessimism; and how law firms based in the United States have managed to gain market share in the United Kingdom’s legal marketplace.

Looking ahead to 2023 and beyond, the Thomson Reuters Institute’s Insights in Action column will continue to offer data-driven analysis and market-revealing insights that can greatly help law firms navigate the often-choppy waters of the global legal market.

If you’re interested in learning more about some of the research used in our monthly Insights in Action column, and how this data can be applied to your firm, please visit here.

Yet arguably one of the most long-lived of these conversations — over lawyer compensation — has itself become a knotty problem that has veered from the pragmatic question of what each firm can afford to pay, to what compensation model makes sense for a law firm given its commitments on culture and value.

At the recent 21st Annual Law Firm COO & CFO Forum hosted by the Thomson Reuters Institute, a key panel, The New Romantics: Reimagining Purpose & Compensation in Modern Legal Services, discussed the question of compensation in depth, touching on issues of compensation structure, non-compensation benefits, lateral integration, and investment in staff.

Offering a bit of history, panelist Janet Stanton, a Partner at Adam Smith, Esq., noted that law firms generally got good marks on how they handled the pandemic and its disruption on their business. “Of course, there were issues, and the pandemic seem to have exacerbated some trends that were already in the market,” Stanton said, adding that it was particularly apparent in surveys that asked why lawyers might leave their current firms. Surprisingly, she said, compensation was a distant fourth among the reasons, behind such issues as work/life balance and flexibility.

Structuring compensation

Panel moderator Jeffrey Connor, Chief Financial Officer of McGuireWoods, suggested that how law firms structured their compensation models may be changing as firms try to transition to new ways of retaining and promoting key talent.

Dwight Floyd, panelist and Chief Operating Officer at Eversheds Sutherland (US), said there’s a lot that goes into figuring out what goes into a compensation review, and it’s constantly being re-evaluated as the market evolves. “It’s always under review,” Floyd said. “We’re always trying to figure out better ways to do that and always listening to partners in terms of what they think is important. So we can take different things into account in different ways.”

Panelist William M. Washington III, Chief Financial Officer at Baker McKenzie, agreed, adding that models and priorities can differ greatly depending on where firms are in the market. “For example, our primary goal is to be competitive in every market in which we compete,” Washington said. “And I actually find the US market to be one of the easier markets where we’re able to make sure that we just stay at top in everything that we do.”

It is also important for firms to develop and communicate their non-compensation advantages to potential new hires or laterals, the panel offered, because surveys show those factors can be strong lures and retention mechanisms for top talent. Panelist Shonette Gaston, Chief Operating Officer at Blank Rome, for example, explained that how law firms handle important non-compensation issues like diversity, career advancement, work flexibility, and other advantages has come to matter more than strictly how much money a firm’s lawyers make.

Gaston said she had just returned from a three-day diversity summit the firm hosted for lawyers, staff, and clients that included talk around the firm’s key diversity initiatives, such as going to underrepresented schools and building a program to offer students a chance at becoming a summer associate at the firm. “We have affinity groups, we have training, and we try to make connections when we can,” Gaston added, stressing that this type of integration was critical for new associates and lateral hires, especially those working in hybrid work situations. “We make sure that we’re meeting and spending time with them, and opening the doors for the programs that we have at the firm for them.”

Integration and investment questions

Gaston and other panelists pointed out that hybrid work environment is very different, especially in terms of how new lawyers are integrated. “We still try to make sure that they’re always included in committees, we ask them to participate by Zoom or Teams, and we do ask that they come to their office,” she said. “In fact, we assign everybody to an office, and then each lateral has mentors that are assigned to them through that office.”

Floyd, of Eversheds Sutherland, agreed that remote working has changed the way firms are handling new lawyer integration. “There’s a tremendous number of people who’ve joined our firm over the last two-and-a-half years who have not had the same kind of introduction and integration that most everybody else has had,” Floyd said. “And the jury’s going to be out for a while on what kind of effect that has had.”

Adding another wrinkle to the compensation debate, McGuireWoods’ Connor noted that with non-lawyer professionals being in such high demand, law firms are beginning to change the way they are staffed — perhaps not in the overall ratio of lawyers-to-staff, but in the specific areas in which firms are investing.

Laura E. Long, Chief Operating Officer & Chief Financial Officer at Hanson Bridgett, concurred, noting that her firm, for example, has made a conscious investment in professionals to fill newer roles like business development leaders and pricing experts. “We’re also doing a lot more around project management, and I’ve gotten them to support me in the work that I do, both on the financial side and in operations for a number of years,” Long said, adding that now the firm is starting to transition those duties to its paralegals to allow them to better support the attorneys and the client teams.

“And that’s been really successful,” Long said. “Paralegals are seeing the opportunities for them, and the attorneys are really seeing the value of that support.”

Complicating matters, associates are learning, observing, and practicing their skills in remote, in-person, and hybrid workplaces, so more support than ever is needed. Leaving BD skills to organically develop or providing a few sessions to inspire BD, likely won’t be enough to effectively or fully tap the potential of your firm’s associates to build and sustain thriving practices.

For law firms that want to offer more than aspirational platitudes, here are three strategies firms can undertake to better set up their associates for BD success:

1. Revisit learning & development (L&D) programs

Business development skills are akin to training for a marathon — you don’t run 26 miles without training on shorter distances beforehand. Similarly, law firms should be offering stage-specific learning & development training in business development from day one that should include normalizing BD training as early as possible. Even if associates aren’t expected to generate clients until much later in their careers, gradual introduction of BD concepts, service skills, and communication& interpersonal skills will allow associates to learn, practice, and work on these skills internally before turning their attention outward.

Firms should also build BD elements into non-BD sessions, which helps draw connections to the business of the firm and allows more voices to be heard. During a training session on mergers & acquisitions, for example, the presenter should share specific examples of how these transactions come to the firm, the key relationship aspects, and what factors aside from the legal work are important to clients.

It’s important for firms to use examples and stories in this way to bring the nuances of BD to life, while ensuring diverse perspectives (because BD isn’t a one-size-fits-all approach). Encourage associates to be creative and connect in ways that are authentic to them.

Other L&D methods include:

• • • emphasizing the small, consistent, daily BD skills. One-off grandiose efforts rarely win the race.
    • dispelling the extroversion bias. BD isn’t solely the domain of extroverts — in fact, some would suggest that introverts are often more successful with BD.
    • discussing what BD success looks like in all work environments and recognizing that just because some activities benefit from in-person interaction, doesn’t mean ignoring how BD can be done remotely.

2. Invest in firm systems beyond L&D

L&D programs aren’t the only source of support firms can offer. By using existing mentorship and sponsorship programs, firms can empower mentors and sponsors to strategize with associates on BD skills, provide access to networks, and guidance on approaches. This will help decode the unwritten rules around BD efforts that are most valued by the firm, as well as how these efforts are to be undertaken.

Mentors and sponsors should discuss how to build visibility, credibility, brand, and relationships in both remote and in-person settings. Indeed, sharing, strategizing, and supporting BD skill development is not always achieved through formal programs, unfortunately, and rather is often passed through informal channels. Firms need to be alert to this reality and encourage partners to pay closer attention to who benefits from informal mentorships and sponsorships and who doesn’t.

Too often, affinity bias plays a role in sharing critical development feedback and BD advice. Firm leaders should encourage a broader culture of BD sharing by all partners, For example, the fimr should encourage lawyers to schedule five-minute BD chats after meetings to review the relationship and BD aspects or opportunities with associates.

Mentors and sponsors should also be alert to the BD value of all firm and client opportunities and help advocate for their mentees and protégés. Access is just as important as skill development.

3. Build BD into formal and informal performance and career development conversations

Firms need to be explicit with associates about the expectation to do great work and to develop the foundational BD skills starting now. And this should include nurturing relationships, seizing stretch opportunities, attending networking events, developing client service skills, and more.

Telling junior associates to focus only on doing great work may disproportionately disadvantage marginalized groups. Those with access to networks and mentors will be investing in their relationships and BD skills, and those who didn’t know the unwritten rules and took the firm at its word will look up years later only to discover they’re behind their peers.

Firms need to build BD conversations into all performance and career development conversations while providing transparency and clarity around expectations. Help associates think about their unique strengths and how those might serve BD purposes. Development conversations should focus on actionable advice and hold people accountable for following up.

Firms should remember that remote environments may require more intention and structure — such as regularly scheduled meetings, for example — because there may be less opportunity for serendipitous interactions and informal run-ins with higher-level colleagues.

BD skills for associates should be fostered, developed, and supported from day one. As the legal industry adjusts to remote and hybrid environments, it’s a perfect time for law firms to revisit their BD skills training as well as explore how other firm systems can support associates.

Early, frequent, and intentional BD support has the added benefit of helping associates feel connected to the interests and goals of the firm, which could have associates feeling the firm is more fully invested in them and is seeing them  for their strengths and skills — all of which results in a deeper sense of job satisfaction.