However, does your tax & accounting firm know precisely what its work limit is? And can you say with certainty how far under or over that limit the firm is operating at any point in time during the year? If not, then “capacity planning” may be the management concept you’ve been looking for.

What is capacity planning?

Put simply, “capacity planning is the process of determining the maximum amount of work an organization is capable of completing during a specific period of time,” says Heather Sunderlin, a senior consultant in Thomson Reuters’ Tax & Accounting group. “If I have a one-cup measuring cup, it can’t hold a gallon of water — and the same holds true with accounting firms.”

During tax season, for example, many one-cup firms take on a half-gallon of work and hope there’s no spillover, even though a mess is inevitable. However, a firm that has engaged in capacity planning already knows exactly how much work it can handle given its existing client base and staff capabilities. There is no need to guess, and when crunch time comes, managers don’t have to bite their nails and hope their staff can rise to the occasion — because they will already know the answer.

With that knowledge comes control and power.

“Knowing with certainty how many billable hours are available and whether the firm is over or under their maximum capacity can help firm leaders determine when they need to hire people, and at what skill level,” Sunderlin explains. “It can also help managers understand how to delegate work more efficiently, and, if the firm has identifiable skills gaps, whether [those gaps] can be filled through learning and development.”

Capacity planning also can help in giving firms a long-term look at their strategy going forward, she adds, noting that “capacity planning can force a firm to take stock of its current client base, determine whether to off-board clients that are no longer a good fit, and on-board clients that are more closely aligned with their ideal client persona.”

In these and other ways, a firm that engages in capacity planning has much better information available to help it execute its business strategy and manage its growth, Sunderlin says, adding that in this way, staff burnout also can be avoided and morale improved.

What does the capacity-planning process look like?

The goal of capacity planning is to figure out how many billable hours are available at each level in the firm, and how close (over or under) the firm is to hitting that number. The basic process looks something like this:

1. 1. 1. Determine the number of available hours at each level of the firm by counting the number of total hours (i.e., number of staff x 40 hours/week x the number of weeks), then subtract holidays, paid time-off, short workweeks, and other non-billable time commitments.
      2. Determine how many of those available hours are realistically billable.
      3. Calculate the firm’s total capacity by multiplying billable hours at each level by the number of staff members at that level. For example, if the Total Available Hours for each staff member during the busy season is 600, and 95% of those hours are billable, the total billable hour goal for each employee at the Staff Level is 570. If there are five employees at the Staff Level, then the firm’s Total Capacity at the staff level for the busy season is 5 x 570 = 2,850 hours.
      4. To determine whether the firm is under capacity (can take on more work) or over capacity (cannot take on more work), you simply need to know how many hours employees have been assigned during the busy season and compare the target number. The same process can be repeated for managers and senior-level executives.

Project management is key

To get those numbers, however, reliable project management (PM) is a must.

“PM allows a firm to see what work is scheduled in a given time frame, which is critical for capacity planning calculations,” Sunderlin says.

Indeed, one key indicator that a firm could benefit from capacity planning is if they aren’t managing projects, tasks, budgets, and assignments, and don’t have numbers available for calculating capacity. Because if a firm doesn’t have those numbers, says Sunderlin, “it means the firm likely has no idea what their workload is in relation to their actual capacity.”

If the firm has accurate capacity-planning data, however, Sunderlin says a firm’s management can:

• • • make more informed hiring decisions;
    • delegate work more efficiently;
    • develop training to fill skills gaps;
    • evaluate the quality of its clientele; and
    • develop a better barometer for overall stress and morale in the workplace.

Not a one-and-done solution

For capacity planning to work, however, Sunderlin cautions that it “should be a continuous and ongoing part of the management process, not a one-and-done calculation.”

A firm’s capacity isn’t static — it is always fluctuating, she explains. Some people get sick. Some work faster than others. Some get bogged down by problem clients. Some work too hard for their own good. By gaining an understanding of these variables over time, capacity planning makes it possible to ensure that employees aren’t overwhelmed, and it also helps firms avoid the trap of “taking on too much work and hoping it will all get done, somehow, some way,” which is a perfect recipe for unnecessary stress, Sunderlin says.

“Ultimately, capacity planning focuses on a firm’s most important assets, which are its people,” she explains.

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, in a spot poll of roughly 30 in-house lawyers in the San Francisco Bay Area in September, all of them indicated that their companies and teams were either fully remote or hybrid.

Yet, despite the prevalence of remote or hybrid workplaces, the potential biases that can impact staff members who are working mostly remote or hybrid still remains. The types of biases include: i) implicit bias, which is a form of bias that occurs automatically and unintentionally and affects judgments, decisions, and behaviors; ii) proximity bias, which is the tendency to favor people who are closer in time and space; and iii) affinity bias, an unconscious bias that causes people to gravitate toward others who appear to be like them.

For those employees who are negatively impacted by these biases in a hybrid setting, management’s poor behavior can be experienced as microaggressions. This can be keenly felt during remote of hybrid meetings, especially if those running the meetings ignore remote attendees, don’t invite the more introverted or junior people to contribute, avoid eye contact, or allow extroverts to consistently dominate the conversation.

Management should also be careful not to ignore virtual meeting invites or consistently reschedule remote meetings because ignoring emails, video call invites, recurring meetings, and more — especially when done by key partners — is a form of bias that can prevent people from doing their jobs well in a remote-first world.

Forging partnerships with other corporate functions

Chief legal officers (CLOs) have an influential role to play in mitigating this bias not just within their team as a manager, but more importantly across their company through the creation of policies, norms and behaviors. Here are some of the ways CLOs are attacking bias at the company level:

• • Setting expectations that human resources (HR) need to work closely with the law department — This includes not only forging an organically strong relationship, but establishing a top-down expectation that HR should look to the company’s law department as a key input and decision-maker for company policies and approach. This should be a priority, given the important role of the department in mitigating biases company-wide, suggests Megan Niedermeyer, General Counsel & Corporate Secretary at Fivetran, who joined the software company during the pandemic as its first legal leader.
  • Focusing on policies and practices that can help reduce bias — These exercises include pay equity audits, which analyze median compensation for each level by department, location, function, and team to understand if those employees with underrepresented identities are receiving lower salaries. Niedermeyer says this was one of the first tasks she tackled with outside employment counsel when coming to Fivetran. In addition to pay equity audits, in-house counsel should be adequately involved in the performance review calibration process, reviewing both median timing to promotion and pay increases for each level by team. In this way, the law department can determine if bias is creeping in and can use this information for sensitive conversations if this is occurring, she says.
  • Leveraging technology to build a culture of feedback — Similarly, CLOs as the chief risk officers of their companies by default, can impact how a return-to-office policy is going, especially when some corporations have had a policy that they’ve had to review or roll back. Niedermeyer explains how she used a strong partnership with HR and a technology platform to increase employee feedback on how the return-to-office process was going, as well as allowing anonymous reporting of incidents to obtain better data on potential negative cultural hot spots. Indeed, workplace harassment in the digital realm, which can be as high as 40% of those who experience work-related harassment, is an unfortunate side effect of more remote working.

Modeling inclusion as an aspect of C-level culture

CLOs, through their conduct and leadership style, can be a model cultural promoter for demonstrating inclusion, which proactively can create a feeling of psychological safety and this, mitigate biases. Alexa Summer, CLO of Rho, suggests ways this could be accomplished, such as:

• • Tailoring management style — Summer customizes her engagement approach with each person she works with, including her peers, direct reports, members of the company’s law department. Specifically, Summer says she seeks to understand what the motivations, goals, and preferences for communication are by asking questions to create a give-and-take, flexible atmosphere that offers a joint approach to problem solving.
  • Repeating expectations of work performance — To increase and maintain trust and transparency, Summer says she often reinforces expectations of performance in hybrid work situations through one-on-one meetings with her direct reports. This ensures that she and her employees maintain a consistent understanding of work requirements and performance goals, especially in a dynamic remote working world where everything evolves quickly.

The management behaviors that advance a culture of trust, respect, and inclusion while mitigating bias in remote and hybrid work are pretty much the same as those that comprise a great leader. Most of the time, this just requires adapting these behaviors to a different paradigm — in this case, one of a remote-first mindset.

While there is no single formula for creating an effective hybrid legal team, there are four essential strategies that legal leaders should pursue to increase the performance and success of hybrid teaming:

1. 1. 1. Create psychological safety
      2. Build belonging and inclusion
      3. Make communication intentional
      4. Prioritize well-being

Create psychological safety

Psychological safety is trust at the team level and a foundational practice of effective hybrid teams. Psychological safety is the belief that employees can be themselves, ask “dumb” questions, share partially formed ideas and respectfully disagree with colleagues without the worry that they will be embarrassed, singled out or otherwise penalized.

Lawyers in a high-trust environment generally feel more comfortable sharing their knowledge and speaking up. Lawyers in psychologically safe environments are also more likely to identify or admit to errors and mistakes earlier. Trust also makes it more likely that lawyers will feel comfortable giving necessary feedback to others on the team. These are critical to a profession that doesn’t sell anything tangible — clients buy legal advice, which must represent the collection of the team’s expertise.

These behaviors will help legal leaders increase trust on their hybrid teams:

• • • Team members should be consistently reminded of the shared common goal and the outcome leaders are seeking to achieve for clients.
    • Legal leaders need to be both accessible and approachable. In a hybrid environment, team members need to feel both the digital and physical presence of leadership.
    • Leaders should offer encouragement — caring and kindness are the new leadership currency in law.
    • Leaders should also celebrate small wins by encouraging lawyers to share examples of small successes during the past week. Tracking small successes has been shown to be a powerful form of motivation.
    • Leaders should also acknowledge the limits of their knowledge. The legal matters that lawyers work on are complex and rarely have a simple answer. Saying, “I’ve not seen this issue before” or, “There isn’t an easy answer to this — let’s discuss it together” signals to team members that leaders will leverage the collective expertise of the team when needed.
    • Finally, leaders need to pay attention to how they listen. Legal leaders often listen to fix problems, and lawyers generally like to listen to win; however, leading effective hybrid teams requires empathy — “humble curiosity” that promotes listening to learn and understand. You can activate humble curiosity with communication cues like, “tell me more about that/say more about that” or “walk through that with me.”

Build belonging & inclusion

Belonging is the need to feel connected to others and to feel like a part of groups that are important and significant to you. One of the biggest challenges legal leaders mention about hybrid work is how to consistently mentor, give feedback and otherwise build the relationships that spontaneously happened when everyone was in the same office. Belonging is such an important psychological need for lawyers that it has been shown to be among the top three drivers of lawyer well-being and motivation. It’s also critical that new professionals feel a sense of belonging quickly.

A good first step is to think about your goal for the interaction and the type of information to be discussed so the best channel to facilitate the relationship can be used. Communications experts call these channels “rich media” versus “lean media.”

A good first step is to think about your goal for the interaction and the type of information to be discussed so the best channel to facilitate the relationship can be used. Communications experts call these channels rich media versus lean media. Rich media include social and collaborative tools, video and face-to-face interactions that are often used for discussions where back-and-forth dialogue is required or when team members must discuss and interpret information and come to an agreement. Lean media are documents, email and texts, and these are often effective methods of communication when new information needs to pass from one person to another (e.g., letting someone know the meeting time was changed to 10 a.m.). Phone calls fall in the middle of the rich versus lean media continuum.

A group of general counsel recently noted the following strategies helped recent hires build strong relationships quickly:

• • • Allow new lawyers to shadow senior colleagues in meetings.
    • Schedule meetings with key partners across the company, which also helps lawyers appreciate the broader company culture.
    • Schedule extra time in one-on-one meetings to discuss non-work-related topics.
    • Set up virtual coffee chats to celebrate personal and professional wins, ask questions and seek feedback about legal matters that lawyers are handling.

Other ways to build belonging include providing greater responsibility to more junior lawyers for tasks that are both visible and important to the organization, and structure unstructured time so that team members can talk about non-work-related topics as they continue to get to know each other.

Make communication intentional

Hybrid legal teams need to communicate in a very intentional way to make sure remote participants don’t feel excluded. The rich media versus lean media analysis from above also applies to team communication.

Team communication norms should be discussed and agreed upon at the beginning of the matter. Teams should discuss practices like how information learned during in-person conversations will be delivered to remote participants and by whom.

Hybrid teams also need to be aware of proximity bias — the tendency for partners or those distributing the work to reward the people with whom they interact in person. Leaders can combat this by coordinating days in the office — for example, requesting that everyone comes in on Tuesday, Wednesday, and Thursday. They can also make sure remote participants speak first on calls, so they aren’t forgotten or left out.

Leaders may also need to be more methodical in how they track distribution of work assignments so as not to inadvertently exclude remote lawyers.

Leaders may even want to have the entire team participate on a call remotely, even if some of them are in the office. This helps to limit the conference room “side conversations” that are common with hybrid teaming. Remote participants can inadvertently feel excluded when they join a call only to see several people huddled together in conversation.

And perhaps most importantly, leaders should clearly communicate expectations and timelines to thoughtfully manage people’s expectations.

Prioritize well-being

Our collective well-being has been significantly challenged since the start of the pandemic, and it’s an area in which lawyers have struggled for decades. Legal leaders have reported remote and hybrid work models have made it even more difficult to know when lawyers and legal professionals may be suffering from burnout and stress.

It can be difficult to recognize the signs and symptoms associated with burnout, but here are some early indicators: procrastination, a drop in productivity, getting sick more frequently with low-grade illnesses like colds and headaches, every curveball is a major crisis (having an outsized negative reaction to a small, basic request), mood changes, inability to concentrate and being detached from things they typically enjoy. Everyone on the team has a responsibility to watch for these warning signs and to invite a conversation (provided you have the right relationship with the person) if they are noticed.

The pandemic changed the way many lawyers and legal professionals want to work. Hybrid teaming is now the expectation of many talented professionals — a model (and a skill set) that legal leaders will need to continue to embrace and practice to retain their top legal talent.

The COVID-19 pandemic and resulting lockdowns and government closures changed the way we were allowed to communicate, limiting personal contact and requiring the use of all alternative means. Ultimately, this advanced our overall ability to communicate and interact remotely. More than 30 states suspended in-person court proceedings for weeks or months after the pandemic hit in March 2020. New Jersey, Connecticut, Delaware, New Mexico, and Alaska mandated their use; and states including New York, California, and Texas urged use of virtual proceedings while suspending conflicting court rules. The pandemic may have forced government’s hand, but many courts and related agencies rose to the challenge in understanding new ways to use technology to ensure that people’s rights were preserved and protected.

A failure to provide adequate protection of citizens’ rights leads to more than a clogged court. There are civil implications, such as allegations of civil rights violations and expensive court cases. For example, a lawsuit, brought by San Francisco’s public defender against the San Francisco Superior Court on behalf of nearly 400 remanded prisoners goes into details about how defendants’ constitutional rights to a speedy trial could be being violated by delays and backlogs due to an overburdened and technically-stagnant court system.

As pandemic restrictions are lifted, courts must balance the benefits of traditional means of adjudication against valuable opportunities to use more advanced means. Governments must evaluate the merits and protection of rights afforded in both the use of traditional communication and virtual appearances. The goal of the court is to preserve rights, and it has become obvious that a hybrid model (using virtual and in-person options) is the best way to make sure individuals have the most opportunities and options to exercise their rights.

Participation & access are key

One of the major hurdles to access to justice, of course, is participation in the process, which can include transportation issues, childcare, time off of work, and many other issues that some people can afford to take for granted. The use of the courts’ time to issue bench warrants, dismiss for want of prosecution, and entering default judgements only to have to appeal and re-address the same issues, is an inefficient use of the limited funds allocated to the judicial system. Texas Chief Justice Nathan L. Hecht clearly explained this as the “new normal”, saying: “We really are determined to take what we learned in the pandemic and build on it.”

In Arizona, judges and other state court officials reported increases in case participation rates in 2020, which they attributed to the move toward remote proceedings. For example, there was an 8% drop year-over-year in June 2020 in the rate of default, or automatic judgments indicating an increase in participation. In Arizona’s largest county, Maricopa, the failure-to-appear rate for eviction cases decreased from nearly 40% in 2019 to approximately 13% in February 2021.

It is a critical net step for the courts and access-to-justice advocates to evaluate each change that was made in an effort to get through the period of crisis and determine which changes are critical to maintaining a properly functioning court system. While this answer will inevitable be complex, it will ultimately make the justice system better and save time and money. In many states this process has already begun.

In June 2020, the state of New York created the Commission to Reimagine the Future of New York’s Courts, a group of judges, lawyers, academics, and technology experts that is studying how courts operated during the pandemic. In April 2021, the group issued technology recommendations to “improve the efficiency and quality of justice services during the ongoing health crisis and beyond.”

As the nation enters a period of post-pandemic recovery, all government agencies have an obligation to grab hold of the lessons and technological advancements that were brought on by the pandemic and subsequent crisis. Using these lessons to create a more just court system is one way to not waste that crisis and struggle it caused.

The issue of toxic behavior in law firms, tax & accounting firms, and corporations is a cause for concern among diversity, equity & inclusion (DEI) advocates and other professionals because it means that roughly one-third of employees within these organizations are experiencing a lack of inclusion and belonging.

However, some believe the current paradigm of DEI with its top-down approach and its priority on individuals with a single underrepresented identity will not adequately address this type of systemic exclusion, while others believe in an integrated strategy of all three components with an increased focused on belonging.

Problems with the current ways DEI is framed

Stephanie Felder, Director of Professional Development and Diversity at Groom Law, is a proponent of the combined approach. “I don’t think it’s quite that black & white as the need to focus on diversity versus belonging,” says Felder. “Both are important, but until you level the playing field and eliminate the exclusionary practices, processes, and systems within your organization, you can’t actually build diversity or belonging.”

Helen May, Director of Belonging@Work, is one of those who calls for an overhaul in assessing and addressing issues of belonging and inclusion based on the human experience. Organizations and human resources in the years leading up to the pandemic evolved to emerge as “bureaucratically diluted of the human element, including diversity and inclusion,” she explains, adding that the current DEI paradigm causes greater division because of the prevalence on setting and achieving targets and too much focus on “othering” large sets of people.

By focusing on a single underrepresented identity, many white men feel othered even as those with underrepresented identities already feel othered in the current environment. In addition, the current DEI approach does not sufficiently address intersectional needs of those with more than one underrepresented identity.

Another challenge concerning the current DEI paradigm is that it is driven mainly in a top-down manner rather than from the bottom upward though the organization. When approached primarily through a top-down perspective, the root causes of what is driving a sense of exclusion are difficult to identify, says May. Because a lack of belonging tends to stem from exclusive behaviors by individuals from both majority and minority groups, it is hard to work out exactly where within management the sources of the issues are occurring, she argues.

Pursuing inclusion through a belonging lens

May advocates for a revised approach to inclusion through the lens of belonging and well-being that uses human-focused questions as a starting point. These questions include:

• • • What is going to make people perform at their very best?
    • What is going to make everybody create that psychological safety they need?
    • What is going to protect well-being and foster a sense of belonging?

Working through the lens of belonging by default is intersectional because it is human-focused, she explains. “We live in a very intersectional world, and it disincentivizes people with other identities to participate, despite many efforts in the current DEI paradigm to invite ‘allies.’”

Using the belonging and inclusion lens, small networking groups within the overall firm or company are created as a safe place for people to have discussions that focus on people empowering themselves and empowering others. Curiosity is used to explore individuals’ unique qualities and experiences as a way of being within the organization and community that has a responsibility to protect the well-being of everyone, regardless of who they are or into what demographic they fit.

How to execute a belonging strategy

Using belonging and well-being as a fundamental context, May says organizations should start with a future vision of culture that defines a framework to attract the right sort of talent at the board level. Then, once the board is in place, it should then in turn focus on identifying individuals who display these culture framework attributes as part of the board’s succession plan. The board also needs to partner with future board members to outline how to empower employees based on activities and behaviors. Along the way, existing systems of promotion and performance evaluation are left alone.

To demonstrate the positive results from this approach, May describes how one client emerged through this process as an employee-owned business with a four-day work week and unlimited paid time off because it asked employees what they wanted. Those next-in-line for the board have evolved into a hub of the community rather than being seen at the top, directing down.

She says that a key part of the solution is to have first-line and middle managers appoint someone to ask the following questions “until it becomes a habit to ensure inclusion is weaved into every process, including performance evaluation, promotion, recruitment, training, and onboarding system.” These questions include:

• • • Who have we forgot to consider while we’re making this decision?
    • Who might we have disadvantaged with the action we’ve just decided upon?
    • Is there anybody else that we should ask about this decision who may be able to give us an alternative perspective?

The result allows law firms, tax & accounting firms, and corporations to build their culture through behavior and habit because people will start skewing their decisions in the in the right way by default without it having to be a formal process.

These recruitment and retention headaches risk triggering broader operational resilience concerns and require employers to adapt to changing work culture and expectations.

Asia skills shortage “particularly acute” post-pandemic

Consultancy firm PwC has described the skills shortage across Asia as “particularly acute” based on findings from a recent survey in which 18,000 employees based in the Asia-Pacific region participated. Similarly, findings from a report released by Poly Research in March found that 60% of organizations surveyed in the Asia-Pacific region believed that they faced the risk of losing staff and being unable to attract new talent, compared with 53% in Europe, the Middle East, and Africa (EMEA) and 53% in the Americas.

Skills shortages in the region have further brought into focus how recruitment and retention risks could impede the ability of businesses to expand. Data center operators in the Asia-Pacific region will face challenges in expanding capacity to meet demand over the next few years, due to skills shortages, according to research conducted by automation company ABB and Data Center Dynamics.

More than 40% of respondents said data center construction in the region has not been able to keep up with demand during the pandemic. The unavailability of specialist skills was named as a major contributing factor, along with access to specialist sub-contractors and trades.

“Quiet quitting” and “lying flat” receive attention

Following the Great Resignation during the latter part of the pandemic, labor and skills shortages have emerged. A survey of 52,000 workers in 44 countries conducted by PwC found that 20% of workers plan to quit their jobs before the end of this year, suggesting that talent retention will continue to be a concern for employers.

Many countries are also grappling with regional attitudes towards job dissatisfaction. Across Europe, Canada, and the United States, a phenomenon known as “quiet quitting”, in which employees intentionally do the bare minimum to complete their job duties, is prompting companies to look for mitigating options.

A survey of 15,000 workers conducted by U.S. workplace researcher Gallup in June found that more than half of the respondents described themselves as “not engaged” and could be considered quiet quitters. Further, 18% of respondents described themselves as “actively disengaged,” the highest percentage since 2013.

In fact, workers in Europe ranked at the bottom for workplace engagement, compared with their peers around the world. Gallup found that only 14% of workers in Europe said they were engaged at work, compared to 33% in the United States and Canada, 24% in Southeast Asia, and 17% in East Asia, Australia, and New Zealand.

In China, a budding movement of “lying flat” and rejecting high-pressure work culture in favor of a minimalist anti-consumption lifestyle has gained momentum over the past two years. Initially spawned from backlash against high-stress overtime work that is a hallmark of corporate culture at Chinese companies in the digital economy, lying flat has spread beyond the tech industry and could have longer-term impacts on economic growth in China.

Considerations

As today’s skills shortage poses recruitment and retention challenges that could result in wider business continuity risks for organizations, corporations must endeavor to understand how regional attitudes towards work are evolving in order to adapt and mitigate their risk exposure.

In western markets, discussion over quiet quitting is prompting some employers to review job responsibilities for employees, with a view toward expecting only what is formally outlined. This shift in expectations is likely to have a wider effect on corporate cultures, with businesses moving towards more transparent and prescriptive methods of performance evaluation.

In China, regulatory reform and pressure from authorities have prompted many technology companies to cut back on overtime and be more mindful of their compliance with Chinese labor laws.

Businesses around the world are becoming increasingly aware that upskilling their workforce is their best option to mitigate retention risk and shore up skilled labor. Equally important — yet less emphasized during the tail-end of the pandemic — is the need to factor employee well-being into talent retention planning. Overlooking employee job satisfaction potentially risks losing valuable resources spent on upskilling key employees to competitors.

To date, most employers had used a gentle nudge approach for RTO because of the need to retain employees. Even now, flight risk among accountants and lawyers continues to remain at 30% and above and is even higher for those professionals from underrepresented groups. Indeed, the flight risk for lawyers of color in most cases was at least five percentage points higher, according to a survey of 1,500 legal associates, and in the case of Black lawyers, it was 12 percentage points higher.

Further, the process for returning to the office for employees, in particular those from underrepresented backgrounds, also is tricky. Working remotely provided a huge relief and improved mental health to employees with diverse identities because many did not encounter microaggressions as frequently as when they were in the office, pre-pandemic.

This means, however, that many employees are facing a potentially lose-lose situation. They might have to sacrifice their mental health to return to office; or if they seek to continue working remotely, potentially sacrifice their career progression because of management’s tendency to favor those people who are closer to us in time and space. This is known as distance bias or the “out-of-sight, out-of-mind” concept.

Without effective awareness and proactive tactics on the part of management to mitigate distance bias, those professionals who the most vocal, most visible, and present in person may inadvertently be regarded as “high-potential” over others who are more introverted and prefer to work virtually — yet, work just as hard with better results.

Here are some ways to reduce the impact of distance bias:

1. Conduct “stay” interviews regularly

Managers who proactively initiating conversations to get to know team members on a deep level are laying the groundwork for better retention of these employees. Managers may not feel comfortable with doing this at first; so, it is best practice to provide managers with a template and guidance on how to effectively administer these kind of stay interviews.

Bill Bradshaw, head of Diversity & Inclusion at Withum, said managers conducting such interviews with employees should include three questions:

• • • How are you really doing?
    • What can I do to support you?
    • What can I do to ensure you have a rewarding career here?

Consistently asking these questions builds trust, helps the employee to feel appreciated, and assists the manager in supporting the employee in exploring career opportunities. Remember, however, it is important to note that employees may have different timescales on trust-building — some may take months, while others just days.

2. Brainstorm “inclusive” norms and behaviors within teams

Another exercise is to crowd-source inclusive ways of behaviors and expectations within the team for those in the office and also for those working remotely. Start with these questions:

• • • What does an inclusive team look like at the firm?
    • What would be some of the observable behaviors to demonstrate inclusivity?
    • What are one or two things that people should be doing to show inclusivity?

For those managers who may be hesitant, Shane Lloyd, Head of Diversity, Inclusion & Belonging at Baker Tilly, recommends posing additional questions to the team that bring in the “client lens” to give more focused insight for managers, partners, and executives.

• • • Start with the question, “If our team were known as the most inclusive in our organization, what behaviors would we observe?”
    • Follow that with, “If we were known as the most inclusive organization among its clients, what would our clients be saying?”
    • Next ask, “What belonging challenges are we likely to encounter?”
    • Finally, engage in a group discussion on the question, “What behaviors resolve these belonging challenges?”

Questions such as these provide direct insights for leaders on how they can effectively foster the conditions that bring to life the responses provided by employees while offering a kaleidoscope approach to viewing efforts of inclusion. “We want to understand these important dynamics from a variety of vantage points — individual contributors, groups, leaders, and clients,” Lloyd adds. Additionally, normalizing conversations about belonging challenges and discussing them openly allows teams to think about how to effectively address those experiences when they arise. Although it seems counterintuitive, openness around discussing belonging challenges is an evidence-based practice that contributes to fostering an inclusive climate.

3. Have an on-call “belonging” coach for executive leaders

This service allows managers to have a resource available to learn more about microaggressions or help them navigate among the different managerial challenges they are facing. These coaches can also help managers shore up their vital personal communication skills. Based on the “warmLine” service implemented by Intel in 2016, Baker Tilly used a similar approach for employees and now plans to do so for managers soon, according to Lloyd.

Withum took a different approach and hired a full-time coaching team to serve the entire organization, which included the option of offering full-time roles from the business teams that sit within the talent management function of the firm. Specifically for managers and senior managers, the coaches helped executives increase their effectiveness in managing a team of people from diverse backgrounds, while delivering superior business outcomes for clients and helping to fulfill outside-of-work commitments.

Remember that different engagement strategies are necessary to manage employees who work in-person, hybrid, or remotely, and for many managers those differing strategies are not intuitive. On way managers could engage remote workers would be, for example, to create the virtual equivalent of “water cooler” chats by hosting open hours for employees to drop in.

4. Enhance performance evaluation documentation requirements

Keeping quality records on performance over the course of the working relationship (not just during performance evaluation time) is also key. Adding and aligning all of the critical work that employees do for leading employee resource groups, or for vital endeavors like coaching, mentoring, and sponsorship are important investments to recognize as part of the overall value that each individual brings to the organization every year.

At the same time, managers should encourage employees to keep track of their own performance successes and other feedback regularly. This is important ingredient when it comes to performance evaluation time. Then, the manager and employee can compare records, and this action helps to reconcile differing recollections of events and mitigate distance bias.

Overall, the best way to retain all employees is to equip leaders with the tools they need to ensure their own accountability for keeping their finger on the pulse of all team members. Following these aforementioned steps can help guarantee that this happens.

The reason for the consternation is that since 2020 the office working norm has been turned on its head, and it’s been too long to go back to normal. In fact, normal has pretty much dematerialized. So, instead of getting back to a normal that is no longer possible, the RTO has become a wicked problem for many leaders.

Yet, a wicked problem isn’t evil in itself. Simply stated, a wicked problem is one that cannot be easily fixed and for which there is no single solution. However, it’s more than that. A wicked problem is the kind of problem that boasts unrecognizable, incomplete, contradictory, and insidiously changing requirements. Further, the unpredictable nature of a wicked problem means that it is often difficult or impossible to divine a solution in which people have much confidence. Complex interdependencies result in efforts to solve one aspect of the problem, revealing or creating other problems.

The RTO is the ubiquitous wicked problem. The flexibility in work location that lawyers and accountants are able to enjoy only serves to amplify the options and number of decisions leaders must make. It also means that leaders who desire an RTO must figure out how to do so without spurring resentment and resignations. There are numerous reports of accountants and lawyers threatening to quit if they are forced to come into the office when other employers aren’t making that a requirement. And, of course, the changing economy may affect that.

The wicked nature of the RTO problem is really about leadership. A leader’s efficacy, especially in difficult times, affects how team members feel about their work and the organization more broadly. Thus, although leaders may be exhausted by the plethora of return-to-office issues, for their team to be successful, they need to be mindful of each decision’s impact.

It’s not just the answer to how many days per week, the mandatory versus strongly suggested nature of the return, who gets exceptions from what, RTO incentives, and whether the return is universal or task dependent. Everything a leader does — including how they do it — creates, reinforces, or destroys morale and culture.

A 7-step process for leading an RTO

To effectuate change that is not necessarily welcome, leaders must cultivate buy-in among the managers, professionals, and staff within the firm. Here’s how they can do it:

1. Clarify why — If leaders accept that the hard-fought education level of lawyers and accountants is evidence of commitment and an intrinsic motivation to serve clients, leaders must also accept that industrial-revolution style command-and-control concepts such as timecards and surveilling the factory floor don’t apply to their workplace. Add to that the fact that technological advances of recent years now mean that people can work from just about anywhere.

So then, why do leaders care where people work? As a leader, you must be able to answer this question so that your people don’t complain that the RTO is a perfunctory time-waster. Identify meaningful benefits such as the opportunities for conversations in hallways or over lunch, and in face-to-face meetings range anywhere from nice-to-have to critical to firm culture, mentoring, and the functioning of the team. Be specific, thoughtful, and consistent in implementation of the RTO and other policies to eschew skepticism and resentment.

2. Create safety & invite discussion — An important aspect of culture is whether team members feel safe enough to express concerns, question leadership, and offer alternative solutions. Foster discussion with team members so that you can address any concerns. Not only does this lessen the sting of an RTO for the resisters and increase buy-in for all, but you convert the RTO problem into a team problem.

3. Ease into the RTO — Obviously, give plenty of notice that an RTO is imminent. Consider easing into the RTO by requesting cameras on during virtual meetings — and be sure to follow this example yourself. This practice is especially beneficial in the absence of a full RTO or if some workers remain fully virtual. No one wants a detached culture.

4. Establish expectations — A leader’s clarity concerning expectations is critical to trust and perceptions of fairness. Even before the RTO, set core hours for meetings and availability, team-wide work-from-home days, and time without meetings.

5. Address the real problem — An RTO is not a substitute for trust. You either trust team members to do the work or you don’t. If the work is not getting done, address that. Consider that the struggling team member may need training, coaching, or other support. Don’t conflate the cause of performance issues with working from home. Answering the question of Why? with any response that smacks of distrust would be toxic.

6. Be flexible and adopt a problem-solving mindset — Remember, RTO is a wicked problem, which means that the next challenge may surface before the next corner. Leaders must remind themselves that RTO is an ongoing challenge and avoid wedding themselves too intensely to a particular aspect of their RTO strategy. Whatever comes up, avoid frustration by focusing on finding the next solution. Accept that RTO and the balance between working from home and the office is likely to evolve.

7. Be calm, patient, and make the next decision — When the need for change or an exception does arise, stay calm and patient. Your demeanor is one of the most important determinants of team culture and success. Make the time to listen, consider, and respond clearly and decisively.

Leading through change isn’t always easy. That said, if you trust this seven-step process and your team, then both you and they will be more cohesive and effective. More than anything, an RTO effort is a time when insightful, decisive leadership is crucial for success.

Not surprisingly then, a recent conversation with over 30 law firm managing partners from across the world, including Thomson Reuters’ CEO Steve Hasker, quickly moved on to the crucial question of talent. Using Thomson Reuters’ Market Insights research, we were able to form a much clearer picture about why lawyers are leaving, which firms are able to retain their talent, and why.

Lawyers looking elsewhere

The sheer number of lawyers considering moving on from their current firm is staggering. Our research indicates that 21% of client-nominated Stand-out Lawyers (mostly partners) and 46% of associates are Unsure, Somewhat Likely, or Highly Likely to leave their current firm within the next two years. In our discussion, the managing partners talked at great length about how their firms are feeling the strain that this challenge puts on already stressed practices. While clients have largely been shielded thus far, this pressure is leading to some tired teams and overworked professionals. Further, many of the managing partners talked about how the time and process to replace lawyers that leave has become much longer and more complex.

Indeed, several firm leaders in the discussion noted that they’ve seen a change in why their lawyers are leaving — while many firms have lost their professionals to competitors or to in-house positions, they are now increasingly seeing people move on with no plan at all.

Looking to the recent “Stay or Go” report from the Thomson Reuters Institute, which explores the attributes of those law firms that have a history of retaining their talent and those who have not, shows that the Stay firms are historically able to retain their talent and even slightly improved their turnover rate in 2021 compared to 2019.

Now, this is where things get interesting. The Stay firms not only had historically higher billed hours per timekeeper, but they also managed their compensation in a much more sustainable manner.

Clearly, the Stay firms have figured out the magic that not only retains their talent but keeps them busy, while continuing to achieve a sustainable pay rate. In essence, the Stay firm lawyers are highly engaged at their firms. When looking at the most engaged lawyers, there are very clear factors that they have told our Thomson Reuters researchers that they like about the firms for which they work, namely: People/Colleagues, Culture, Quality of Work, Collaboration, and the Firm’s Values. All these engagement factors are linked to the quality and ability of firm leadership and the depth and inclusiveness of the firm’s culture.

Finding the best path to retention

Discussion of this data among our managing partner group led them to reflect on the best practices in which firms could engage to keep their own lawyers satisfied and staying at the firm. Almost immediately, the group agreed that the pandemic and remote work had made it much harder to engage with younger professionals within the firm.

For example, remote work made mentoring — and especially those more difficult career-shaping conversations — different and more challenging. Even those younger professionals who would have historically been on a good growth track are now questioning their path to a great degree. This means that now, law firms are having to “sell” the idea of partnership like never before. Indeed, several law firm leaders on the discussion noted that their lawyers are more critical of how they are spending their time now, and in particular, those with long commute times are more reluctant to sacrifice large parts of their day on travel.

Firm leaders noted that firms generally have become more flexible with how they allow their lawyers to work, although this looks different across geographical jurisdictions. For example, some firms have pursued a hybrid model whereas others have successfully mandated an in-office presence, with flexibility on Fridays. Those firms that have not mandated in-office presence are not seeing the return-to-office environment at the level they’d like, so they are trying to incentivize in-person work through free food, coffees, and social events, several leaders explained.

Managing partners also acknowledged that the full effect of the pandemic and remote working and how it affects associate development likely won’t be known for some time.

Yet, in another sense, the pandemic and the move to remote working carried some benefit because it improved law firms’ ability to communicate internally, and allowed for greater consistency between offices because of the resulting breakdown of geographic barriers and silos that naturally occur in an in-person environment. Not surprisingly, the managing partners also acknowledged that the full effect of the pandemic and remote working and how it affects associate development likely won’t be known for some time.

Another theme that reoccurred in the discussion was that lawyers need a sense of purpose that’s linked to the work they do in order to become highly engaged. Progressive law firms are involving associates in conversations that are shaping their firm’s culture and values, and are helping associates find their best fit and purpose by rotating them among different practices and mentors. In fact, several law firm leaders on the discussion said they were seeing an increasing need for transparency on how their younger lawyers can advance their career growth into partnership or leadership roles.

One area on which the managing partners did not come to a consensus on was who in the law firm is responsible for lawyer retention. There are many resources that are accountable for recruiting, but it was not so clear who was responsible for retaining lawyers. Indeed, lawyer retention is a relatively new phenomenon for law firms as, historically, lawyers have spent their entire career at the same firm. So, as firms begin tackling the lawyer retention question, defining who is responsible for lawyer retention is an important part of that question to answer. Interestingly, leaders emphasized the growing importance of the line manager in retention — a factor that has increased in the post-pandemic environment, with firms trying to encourage line managers to figure out what it is that their team members need and to ensure that those needs are being fulfilled.

The law firm leaders also reflected on the importance of spreading out the client relationship among many lawyers and other professionals within the firm to ensure that there are multiple points of contact between the firm and its clients. Thus, in the event that one lawyer leaves, the client relationship can be more easily maintained. In essence, the group noted, the fundamentals of account management are even more important during this ongoing war for legal talent.

As this vigorous conversation showed, strong leadership is key to retaining lawyers, preventing client disruptions, and preserving a firm’s culture.

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You can gain a deeper understanding of how research can be applied to your firm, here.