Driving Firm Performance with a Culture of Training

Deloitte maintains a campus in Texas dedicated to the professional development of its employees called Deloitte University. McKinsey steers new hires into a weeklong boot camp and regularly provides training opportunities to its consultants. What signal is your firm sending inside and out about its culture of training and development? As a corporate trainer who often works with law firms, I regularly hear attorneys state that their on-going training consists of attending whatever continuing legal education course that is approximately relevant, irrespective of quality and professional development goals. That is to say, the professional development culture of many law firms is historically weak.

This is frustrating for attorneys. After all, they chose a profession that requires higher education and the pursuit of knowledge. The law profession is filled to the rafters with driven, curious learners looking for a challenge. Yet, the historic lack of focus on developing a culture of continuous training and development like other knowledge-worker-driven industries has and continues to have a negative impact on law firms and the legal profession at large. One New York Times report places depression and alcohol abuse within the legal profession at 28% and 33%, respectively.[1] Clearly, a large number of participants in the legal field suffer from depressed engagement and morale. Professional development programs can help address and ease some of the professional pressures thought to contribute to these afflictions.

Organizational and managerial research is clear that engaged workers are more productive and provide higher levels of service to clients, resulting in 17% higher average profits for firms fostering higher worker engagement.[2] For decades, employee engagement efforts have centered around carrot-and-stick style motivation schemes. Research increasingly demonstrates that if a firm wants better client service and higher profits, financial incentives are not the best or only path to get there. The financial carrot tends to work best in what are often termed mechanical tasks, like those common in industrial settings or jobs comprised mainly of rote tasks. While the practice of law certainly has some rote tasks, as practically all jobs do, the essence of practicing law is not mechanical in nature and requires greater creative effort. Research has shown that when work is more creative and requires higher cognitive thought, financial incentives have been shown to impede performance.[3]

Financial carrots might actually be sticks guiding certain employee behaviors that detract from long-term profits unless thoughtfully managed. The technology giant Google makes it a policy to pay bonuses to team members of failed projects, believing that paying only profitable performance incents employees to perform tasks that do not deviate from prior-proven or management-blessed actions. When this occurs, problem-solving becomes formulaic and banal, two words not closely aligned with positive morale and employee engagement. In fact, many successful Google products and services in the marketplace today are there because Google’s management took thoughtful steps to not let actions aimed at boosting performance inhibit the firm’s long term success, while celebrating employee efforts and lessons learned from shuttered projects.[4] Google uses its financial carrots to reward effort, learning, and long-term results.

Given the cloud of uncertainty around industrial age carrot-and-stick solutions to employee engagement, firms in the information age are wise to seek alternative solutions to improve morale and employee retention, and in return improve client service levels. The good news is there is an already well-defined path to improved employee engagement, higher employee retention, and happier clients. It starts with cultivating and investing in a culture of learning and development.

The reason cultures of learning yield such success for companies that implement and support them is simple. It provides the individual employee with the goal of mastering something. Goals and mastery fill people with a sense of purpose and worth. When facilitated by their employer, this investment in learning strengthens a bond that goes beyond the transactional agreement of labor for a paycheck. The investment in professional development and training opportunities says to employees: “We care about you, your happiness, and your professional future.” In return, the firm receives a more engaged, more valuable employee. Again, lawyers often came to the law because they are curious learners seeking a challenge and purpose.  

 To better illustrate this point, let us look outside the law profession for a moment to see how other firms with strong learning cultures achieve greater results.

Zappos, the online shoe retailer, was founded in 1999. It came into existence at a time when the majority of its peers were going bankrupt due to burst of the dot-com bubble. In its infancy, Zappos was not much more than an idea hocking a commoditized product online. A pair of Nike Air Jordan’s size eleven are the same whether they are purchased at Footlocker, a local sporting goods store, or from Zappos.com. Yet, in order to survive and thrive, Zappos needed to win over customers by providing superior customer service. Zappos’s CEO Tony Hsieh describes this as “delivering the Wow.” A cursory look from the outside might make a skeptic say “Anyone can take returns for a year and give free two-way shipping.” Yet, it goes beyond that.

In Hsieh’s book Delivering Happiness: A Path to Profits, Passion, and Purpose several anecdotes convey what is meant by “delivering the Wow,” such as stories of customer service reps forgoing normal rules of speech to make the customer more comfortable or arranging pizza deliveries for customers that had mistakenly dialed Zappos’s helpline. The level of service, independent decision making, and customer centric practices started with the training program created by the company. Time management, finance, leadership, and presentation training are made available to all Zappos employees, regardless of department. The genesis of the idea for training beyond specific job functions was that promotions, transfers, layoffs, and resignations occur as an everyday event in modern corporate life. The best way to prepare for them is by developing a well-educated, well-rounded and skilled workforce.

Broad-based employee training accomplishes four objectives. Training and professional development:

1.      Provide for a reservoir of talent to plug future holes;

2.      Develop skills that allow employees to see the business logic of executive decisions beyond just their role and their department;

3.      Demonstrate to employees that the company and its executives care about employees and their career advancement; and

4.      Empower employees with broad based skills and values that enrich client service levels.

The result of Zappos’s culture of continuous training and development was cemented on October 31, 2009 when internet retailing giant Amazon bought Zappos for $1.2 billion. Zappos’s culture of delivering their clients the Wow started with investing in their employees. By building better trained, better educated employees, they created internal fans of the company, which in return created high levels of engagement and customer satisfaction, which lead to repeat business in an otherwise commoditized business. In the legal field, where differentiating one’s services is as difficult as ever, the value of this lesson becomes even greater. A firm can either be known as the law firm that practices in a rote fashion, devoid of creativity, but good at telling clients ‘no,’ or a firm can foster a culture of continuous development that equips legal staff with the foundation of tools and experiences to better understand their clients’ businesses, needs, and challenges and come up with thoughtful, creative solutions.[5]

For firms like Zappos, Deloitte, and McKinsey, the culture of learning and development triggers not only a more engaged and happier employee but also serves as a strong recruiting and business development tool. It helps create a virtuous cycle. New learning and training opportunities rank second among priorities for workers under the age of 35, according to a recent study.[6] On the business development side, employing highly-skilled and happy employees often makes the best pitch for new business. Talented professionals want to work with other talented professionals on winning teams. Strong professional development programs are a billboard to both potential recruits and clients alike.

Many law firms already embrace professional development, especially for new associate hires. Learning and development cannot begin and end there. In order to improve employee morale, law firms should seek to tap the very drive and curiosity that brought many of its practitioners to law school and the legal field in the first place. Human-capital-driven firms like Deloitte and McKinsey do more than just grasp this concept: they institutionalize it in their practice. Any law firm looking to compete over the long run and differentiate itself should aim to institute a strong culture of learning and professional development.

 

[1] Statistics were reported on February 4, 2016 in “High Rate of Problem Drinking Reported Among Lawyers,” Elizabeth Olson, The New York Times.

[2] Studies cited include: “Becoming Irresistible: A new model of employee engagement” Deloitte Review 16; and 2014 Recognition Trends Report, Quantum Workplace.

[3] For a deeper dive into the literature and what truly motivates Individuals read Drive: The Surprising Truth About What Motivates Us by Daniel H. Pink.

[4] For more on this practice, read How Google Works by Eric Schmidt and Jonathan Rosenberg.

[5] For more on Zappos’s culture and history pick up Tony Hsieh’s Delivering Happiness: A Path to Profits, Passion, & Purpose.

[6] Sources include: “Millennial Employees Confound Big Banks,” The Wall Street Journal. April 8, 2016; and 2014Recognition Trends Report. Quantum Workplace.