Is Your Law Firm Preparing For the New Generation?

Is Your Law Firm Preparing For the New Generation?

Law firms are always evolving and growing, but according to the new Obelisk Support report, entitled, ‘World in Motion: why the legal profession cannot stand still’, the next generation of legal professionals now expects the sector to prioritise sustainability above all else. Back in January 2021, accounting giant EY wrote an article on why the pandemic generation, Gen Z, as the largest generational cohort in history will shape the next normal and it is imperative that business leaders grasp their ambitions and expectations if they want to thrive. More recently, Deloitte’s annual 2023 global survey of Gen Z and Millennials revealed that while work/life balance and employer progress diversity, equity, inclusion, societal impact and environmental sustainability is improving, many in the profession are still not happy with the societal impact of their employers. The survey found that less than half of respondents believed that their employer had a positive impact on society.

In this article, we will explain the findings of the Obelisk Support report and how by focusing on the four key pillars of purpose and profit, environment, access to the profession, and ethics, law firms can drive the changes the profession needs to see.

The focus of the ‘World in Motion’ report The background of the Obelisk Support report is the rising interest in environmental, social and governance (ESG) within the legal sector and the question of whether ESG is now genuinely starting to eclipse profits per equity partner (PEP) as a primary focus. As the report highlights, this shift is evidenced by the fact that BT Group renewed the place of Addleshaw Goddard LLP on its legal panel specifically because of its commitment to diversity and inclusion. In addition, they cite Microsoft’s longstanding law firm diversity program which incentivises law firms with a bonus of up to 3% of their annual fees if they meet their strict diversity targets. Given this background, the Obelisk report looks at the extent to which sustainability is now a major focus for modern law firms based on interviews with junior law professionals. To get to the bottom of the matter, Obelisk asked participants about how they feel the profession is progressing when it comes to culture and ethics, their own priorities, and whether those in the most senior roles are actually listening to them. The Obelisk Support report identifies four main pillars which it believes are needed to support the new legal ecosystem based on proper sustainability:

1) A balance of purpose and profit

2) Being actively climate-conscious

3) Enhancing accessibility to the profession, and

4) A stronger focus on professional ethics

Pillar 1: Achieving a balance of purpose and profit

The report points to the growing number of law-focused organisations that are actively pushing for greater environmental change, including General Counsel Sustainability Leaders (formerly Lawyers for Net Zero), Legal Sustainability Alliance, Lawyers Are Responsible and the Chancery Lane Project. The publishing of guidance by the Law Society in 2023 entitled, ‘The impact of climate change on solicitors’, aimed at helping law professionals to “pre-empt the climate change risk” to their organisation and doing “business competently and compliantly” is further evidence of this.

More and more law firms are reviewing their commitment to the environment and making decisions about the type of work they take on as a result. As the report explains, “Turning away clients for ESG reasons is now ingrained at Bates Wells, the London law firm that was the first legal practice in the UK to become a B Corporation, a global movement that seeks to balance profit with purpose”.

The issue for law firms is achieving a balance between purpose and profit, especially given the widespread view that everyone is entitled to legal representation, even if they are pumping chemicals into our waters and pollution into the atmosphere at the rate of a small nation. As one participant in the report explained, she is aware of a vegan lawyer who refused to do work for a fishing company. This illustrates the point that even if everyone is entitled to legal representation, more people are willing to refuse to do unethical work because it does not align with their values. The challenge of achieving balance may be much harder for profit-focused private companies with shareholders compared to trust or partner-owned firms.

Pillar 2: Being actively climate conscious

The Obelisk Support report discusses the growing pressure on firms to ‘step up to the plate’ when it comes to being actively climate conscious. It points to the open letter written in 2022 by the climate change charity Plan B.Earth and the Good Law Project which said that lawyers should be ethically obliged to advise clients of the serious risks, legal or otherwise, of pursuing activities that risked exacerbating climate change. It also points to the report by the organisation Law Students for Climate Accountability entitled ‘The Carbon Circle: The UK Legal Industry’s Ties to Fossil Fuel Companies’. The report looks at the role that top-ranked London law firms play in exacerbating the climate crisis and highlights the fact that 55 firms have facilitated £1.48 trillion in fossil fuel projects.

One of the keys to becoming more climate-conscious is helping lawyers and law firms understand how their work impacts the environment. The report also highlights how much clout in-house GCs have when it comes to environmental governance and recommending change to senior leadership. The reality is that as things stand, GCs will need to significantly boost their education in this area in order to facilitate this change within their organisations.

Pillar 3: Enhancing accessibility to the profession

Despite all the noise, it is still the case that not enough is being done to enhance accessibility to the legal profession. While the majority (53%) of those working in the legal profession are female, as the report explains, this is not apparent in the upper echelons of management. Currently, only 18% of females in private practice are partners, and this has not increased much at all in the last 15 years. The report also highlights that those from Black, Asian and minority ethnic (BAME) backgrounds make up 18% of solicitors and a quarter of BAME solicitors are partners (compared to 35% of White counterparts). In addition, BAME Solicitors are three times more likely to be sole practitioners which further illustrates the lack of accessibility to large law firms.

There are several initiatives and movements intended to change the tide of accessibility for the better, including the Social Mobility Pledge, 10,000 Interns Foundation, Race Fairness Commitment and the Women in Law Pledge. According to the report, more and more law firms are signing up to the ‘Mansfield Rule’. The Mansfield Rules is an annual certification scheme that originated in the US and measures the extent to which law firms have considered “least 30% women, racial and ethnic minorities, LGBTQ+ lawyers, and disabled lawyers for leadership and governance roles, equity partner promotions, formal client pitch opportunities and senior lateral positions”.

Pillar 4: A stronger focus on professional ethics?

When it comes to the final pillar of ethical behaviour, the report points to the comments of the Law Society’s 2022/23 president, Lubna Shuja who stated, “Leadership is key. We must see personal behaviours and virtues across the profession – including at the senior levels – which create an environment that supports, rather than prevents or suppresses, ethical behaviour”. She also said, “The culture in any organisation is so important – its openness and propensity to share mistakes, misgivings and learnings, rather than fostering a practice of blame and dismissing concerns”.

Many lawyers and Solicitors feel under pressure to undertake work even if it conflicts with their personal ethics. Again, the challenge for the profession when it comes to ethics is achieving a balance between the work that is taken on and the values of the individuals doing that work. As the report states, “It is, of course, nonsense to suggest that all younger lawyers are, or should be, motivated solely by higher ideals and should only be engaged in legal work with a social justice or similar purpose. Just on a practical level, the salaries on offer in the City are obviously attractive to those weighed down by student debt”. The direction of travel is clear however, the newer generation will continue to push for progression towards more ethical behaviour and targets and law firms will need to understand how to deal with this.

Wrapping up

No one is suggesting that meeting the needs of the new generation will be straightforward for the legal profession, but it is necessary to achieve long-term sustainability and profitability. The Obelisk report only touches on a few of the challenges that law firms will face when trying to erect the pillars necessary to achieve success in this area. If there is one message that comes out of this report it is to start talking and creating a strategy for genuine change today. As Obelisk’s CEO, Dana Denis-Smith puts it, “A legal profession that matches these new priorities of purpose, equality and environmental awareness needs to be at the heart of this. And the legal businesses that reflect this will be the trusted partners of their clients”.

Albion Legal provides a range of added-value products and services, from bespoke employment disputes insurance cover to white-labelled HR software. To discuss any points in the above article or to find out how we can help your business, please phone 0113 2471 717 or email our team.