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SRA Guidance on Workplace Culture

Posted: 28 Feb 2022

The SRA recently published guidance on workplace environments in law firms[1] (the ‘Guidance’) which highlights some of the risks facing the legal sector and provides some useful advice.

The report cites that the SRA “have received complaints that some firms have an unsupportive, bullying or toxic working environment and culture”. This may not be a surprise to some, but the world of work has changed, and many employers have already recognised that, in order to attract and retain the right talent, there are other ways of running a business. The Guidance presents a stern warning to firms: “We will take action if we believe that there has been a serious regulatory failure”. It is interesting that the industry’s regulator clearly feels there is enough of an issue with toxic cultures in law firms that express guidance and sanctions are needed in this area.

The looming threat of breaches of the Code of Conduct for Firms (the ‘CCF’) and the Principles provides motivation to reassess but is not the only threat to employers. Whilst the so-called “Great Resignation” has not yet materialised to the extent expected at the end of 2021, it remains a real risk to recruitment and retention of workers into 2022, and is by no means limited to the legal sector. In the legal sector alone, we are seeing huge increases in pay offers in order to entice workers to join or return[2] but many say that this is unsustainable given the workload expected in return, not to mention the difficulties that a long hours culture creates from a wellbeing, diversity and inclusion perspective.  Now more than ever, firms need to investigate other ways of incentivising workers to stay[3]. Many media sources point to millennials and Gen-Z’ers paving the way for this mass reshuffle and this matches findings by LawCare’s 2020/21 report[4] (the “Report”) which found that participants aged between 26 and 35 showed the highest burnout scores[5].  

Workplace Culture

The Guidance highlights the need to consider Paragraph 2 of the CCF more holistically. Paragraph 2 refers to “effective governance structures, arrangements, systems and controls to ensure that they and they staff can comply with all applicable regulatory and legislative requirement, as well as managing all material risks to their business.” This should be read as including systems to support staff. The SRA highlight that failing to protect staff or creating an environment where breaches cannot be reported comfortably, creates greater risk of breaches and prevents effective management of them.

Law firms do seem to be behind in the movement of employers to improve workplace culture, and consider the benefits of properly supporting their staff so they can achieve a balance whilst progressing their careers. What can a law firm do? Ensure that workers know who to go to and when, in confidence. Make sure workers know that there will be no repercussions for reporting breaches and dealing with breaches in a more constructive way so that workers who do make mistakes feel more comfortable bringing these up rather than covering them up. A top-down approach is also key – there is no point driving cultural change within any business if the leaders do not subscribe to it themselves.

Effective Supervision

Paragraph 4 of the CCF provides that firms need to ensure that there is proper supervision in place. This supervision should extend beyond checking in on case progression and should also check that staff are not overwhelmed.

What can a law firm do? As stated, supervision needs to extend to checking that staff do not have excessive workloads and are properly supported. One finding in the Report was that regular catch-ups were the most commonly cited measure available which participants found helpful. However, these catch-ups were often inefficient. The Report also found that a significant amount of those with managerial responsibility were not given management training. Ongoing managerial training programmes on a variety of related leadership topics such as leading high performing teams, ensuring team wellbeing and development, and dealing with difficult situations, coupled with a top-down leadership approach to driving a supportive culture will contribute to more effective discussions with team members. And in turn, regular catch-ups to assess workloads and wellbeing would likely assist in this supervision mandate.

Treat staff with fairness and dignity

Principle 6 and Paragraph 1.2 of the CCF provides that firms must ensure that employees are treated with fairness and dignity, including freedom from discrimination, bullying, harassment and victimisation. This involves creating an environment where complaints will be dealt with fairly. Not investigating such complaints could lead to an allegation that a firm has failed in its obligations under Principle 2.

What can a law firm do? Firms should have appropriate policies in place. Equally important, firms should implement and adhere to these policies. The SRA advise that “Firms should keep evidence to show that such policies are being followed and the action they have taken when such issues have arisen.”

Conclusion

Workplace culture is shifting more generally and workers’ priorities are changing. Regardless of the Guidance – creating a good work environment is an important matter for employers if they want to retain talent going forwards. This also involves actively listening to employees’ concerns and feedback and ensuring they receive a considered response.

If you would like to implement new policies or, more generally, would like advice on improving the workplace culture in your business, Spencer West LLP would be delighted to assist.


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