A firm partnership

by 10 Nov 2009

Michael Rose and Susan Ferrier of Allens Arthur Robinson tell Sarah O’Carroll how they managed their people through the downturn and how they plan to lead a frustrated workforce through the upturn

There has been a significant mood shift within the global workforce over the last 18 months, believes Allens Arthur Robinson chief executive partner Michael Rose, particularly among lawyers. Accord ing to Rose, the attitude of the workforce has gone from one of anxiety to one of frustration. He believes that dealing with this mood shift will be one of the greatest people challenges facing companies moving into 2010.

Anxiety to frustration

Rose, winner of the Neller HR Champion (CEO) Award at the recent HR Leadership Awards, describes how he and his HR team plan to handle these changing attitudes among lawyers and the workforce in general.

“At the beginning of the year, there was an awful lot of press around very significant cuts in numbers at law firms around the world,” says Rose. “So there was a high degree of anxiety among lawyers at the end of last year and beginning of this year. What was pleasing for me was our approach to frank communication and let ting people know what was going on. I think it dealt with that anxiety and helped people understand the environment and feel more confident about what was going to happen next.”

The current feeling of frustration, he believes, stems from the fact that a highly mobile group of people – most of whom commenced their careers with a sense that there’d be a degree of mobility within their career and that they’d live and work in various places during the early years of their career – did n’t get to realise many short-term ambitions because of the economic conditions over the last 18 months.

“My sense is that there is a large degree of frustration now. I don’t think this is an issue specifically for our firm – I think it is for every industry and organisation,” says Rose.

This frustration among people will soon lead to a large degree of movement, says Rose. However he also believes that this will not be a big concern for him or his HR team.

“Everybody everywhere is going to be getting up and mov ing and so, just as there might be a lot of people wanting to go to the market, it also seems pretty likely that the market is going to be pretty buoyant with people,” he says.

For Rose, the bigger challenge in relation to workers’ frus tration is how to let people know that management recognises that sentiment, and also that management understands how staff members are feeling and is doing something about it.

“There’s a need to keep careers engaging and vital and challenging – even though the environment isn’t turning up as many challenges as it once did,” he says. “So part of our planning is to look at how the downturn has changed the experience that everyone has and whether there are ways in which, within the current market conditions, we can ensure that some of the frustration that people must be feeling is addressed.”

According to Susan Ferrier, director, people and devel opment at Allens, engagement surveys over the past three years have shown that individuals want to be inside an organistion that has strong leadership and a clear direc tion and strategy around where the company is heading. Aligning these business goals with personal goals can also help alleviate any frustration caused by the restrictive economic conditions.

“We’re going to be doing a lot of work around careers so that people have a lot of information about careers and resources and what they look like,” says Ferrier. “And this must be aligned with the overall business strategies.”

Core people strategies at Allens

One of the reasons Rose believes he won the award for Best HR Champion was because of the belief and recog nition that people are central to what the firm does.

“People talk about being ‘people businesses’, but when people deal with law firms the only thing they want is the experience and judgment of people,” he says. “There fore our clients want to benefit from the experience and judgment of people and that derives from their training, on-the-job experience and also their personal character and values.”

Therefore, he says, the core people strategy within Allens is simple: select a broad and diverse range of people, offer them excellent experience and learning, and create an envi ronment where people’s own personal values and the firm’s values work together in a way that motivates and inspires.

“That sounds a bit high level, and a bit imprecise, but that is a basic notion that runs through how we set up our people strategies and how we work with them,” he says.

Over the past two years the company introduced two broad programs which support these ideas.

“We have stepped up our investment in learning, in the support side as well as for partners and lawyers,” says Fer rier. “And we’ve probably [directed] the majority of our spend around building skills around feedback.”

According to Ferrier, effective conversations and rela tionships are vital in carrying through these values and goals.

Diversity is another area which the company has focused on over the last two years. The firm built and is in the process of implementing a reconciliation action plan and has reinvigorated its Women In Allens program.

“This strategy is really focused on what the firm is going to look like in 20 years’ time,” says Ferrier. “I think the firm will look very different in 20 years both ethnically and [in terms of] gender base and it’s very important to reflect that in our workforce.”

Redundancies and flexibility in the downturn

According to Ferrier, inclement economic conditions nat urally led to a change in people strategies – some had to be put on hold and others implemented more quickly. Vol untary redundancies, flexibility and open communication helped carry the firm through the difficult period.

“The absolute first strategy was one of pretty constant and very frank communication,” says Rose. “We got very quickly to a point where people trusted that any decisions made weren’t going to be something they were surprised by and I think people became confident that we were work ing our way through market changes in a sensible and structured way.”

Redundancies were not something the firm looked to go into as a kneejerk reaction to the changes in the mar ket, says Rose. Instead a voluntary redundancy program was introduced.

“We think our voluntary redundancy program was designed very well so as to provide a generous incentive to peo ple who were considering a career change anyway and I think that the success of that program does indicate that it was well designed and appropriately targeted. I think our staff regarded it as a very positive move instead of a softening up measure as a response to the market change,” he says.

A total of 115 people were made redundant within the firm. As the company enters 2010 – and with a possible upswing in the market in sight – Rose says the possible spectre of a shortage of good people is not a big concern for the firm and that it does not regret the decision to let these people go.

“Our redundancy program was ‘about right’ is how I’d describe it,” he says. “We actually did say ‘No’ to some people who had applied for redundancy because we wanted to keep them. We are still carrying people to some capacity – which gives us some flexibility in the event that conditions change quickly. We are very happy with the outcome, which reflects the careful design and implementation of the program.”

A flexible work option was also introduced and was taken up by 8 per cent of the organisation. This was run in conjunction with the voluntary redundancy and also took a tailored approach.

“There was a significant take-up across all our offices,” says Ferrier. “We did a briefing process throughout the whole firm, briefing all lawyers about what it could look like and my team worked with partners throughout the business. In order for flexibility to work it has to be very much business-led and [focused] around business needs. It can’t be just filling out a form.”

There was no specific demographic that snapped up the flexibility offer, according to Ferrier, and she explains it went right across the board.

“There [was a spread from] young people who wanted to do something else on their day off to senior men who also wanted to scale back and perhaps spend more time with their children,” she says. “Flexibility is a long-term sustained business practice now and I think that generationally people who are between 20 and 30 will want to work very differently from the old traditional style of work.”

Biggest people challenges for 2010 and into the future?

Ferrier believes that one of the key challenges for law firms in the next few years will be pressure to embrace globali sation, mergers and strategic alliances and with it, she says, will come another set of challenges – including mobility and cultural challenges.

“When business activity amongst our clients returns to pre-crash levels it won’t necessarily return to the same places it was before,” adds Rose. “Here in Australia we’re seeing a greater emphasis on the Queensland and Western Australia economies – and most law firms tend to be concentrated in NSW and Victoria. The [ability] to get good people to where the clients most need them to be is something that law firms will have to get better at working at in the future.”

Another big challenge, Rose believes, will be the issues of pay and performance

“Traditionally there has been a very loose linkage between pay and performance in our kind of firms and pay tends to ratchet up, on a seniority basis at least. That model really solidified in law firms over the last 10 years or so and was a reflection of the pressure in the market for lawyers,” says Rose.

“Most of the firms have salary freezes in place and it will be interesting to see if that model re-emerges or whether there will be greater reliance on performance-related remu neration – including incentive-type remuneration, which is generally not widely used in the legal profession.”

Courage to address emotions

One of the most important aspects of leadership, says Rose, is to have the courage to address sensitive issues. He believes, after discussions with other CEOs and indus try experts, that there is a need for greater recognition of emotion and feeling in the workplace, particularly around the notion that people need to feel proud, valued and secure.

“Things like that don’t turn up in strategic plans but turn up in how an organisation performs,” he says.

“I sometimes think that when people talk about the ‘courage of leadership’, the kind of courage they’re talking about is the courage to recognise what many people label as the ‘soft issues’ of leading people. But they are, in fact, really quite important issues, usually difficult issues to talk about – and difficult issues to get right.”

Judges' comments: Michael Rose

Allens Arthur Robinson is a large law firm. Considering the highly professional and demanding nature of this workforce it is no mean feat for the firm to have a 91 per cent positive response from its employees saying they believe the firm is well managed in its annual employee survey called "MyView".

Chief executive partner Michael Rose has been instrumental in ensuring that people strategy is not only clear to the senior leaders, but also at every level of the organisation. He has championed a principled approach in responding to the GFC, at the same time as not losing focus on the company's great initiatives around areas such as work/life flexibility, diversity and being the first law firm to launch a reconciliation action plan. Rose has been personally committed to the success of these initiatives and has worked closely alongside the HR team to drive them through.

Rose takes time out to provide input to the HR team. He regularly attends their meetings and personally thanks the team for their contribution to the success of the company. He makes public statements both supporting and recognising the work of the HR team. Rose is truly a role model of a great business leader championing HR.

About Michael Rose

Rose is the chief executive partner of Allens Arthur Robinson, based in Sydney. He leads a team of executive partners and corporate services directors responsible for overseeing the firm's professional practice, client relationships and business operations in the nine countries in which the firm operates.

Prior to this, Rose was the head of the firm's litigation and dispute resolution department and a commercial litigator specialising in large-scale commercial disputes. He has acted for clients in significant disputes throughout Australia and in the United States, Europe and several Asian jurisdictions. His clients have included Twentieth Century Fox Film Corporation, Dow Corning Corporation, Estée Lauder, Export-Import Bank of the United States, Aristocrat Leisure Limited and Sports & Entertainment Limited.

Outside the firm, Rose is the Chairman of ChildFund Australia, an international aid and development organisation that supports more than 55,000 children and their communities in developing countries. He is also a member of the Education, Skills and Innovation Task Force of the Business Council of Australia.


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