Talent management in law firms

Tese de doutoramento, Psicologia (Psicologia dos Recursos Humanos, do Trabalho e das Organizações), Universidade de Lisboa, Faculdade de Psicologia, 2017Talent management has been addressed both in the literature and by practitioners as the differentiator for meeting the new-millennium requests. Following this trend, law firms have been implementing talent management for supporting the building of a workforce ready to deal with fast-changing markets. Since the new millennium, law firms have been immersed in a cut-throat competitive environment. The rules of lawyering have been altered. The lawyers’ job profile have broadened from legal skills towards business development and managerial skills that do not fit their profiles. Articles, seminars and books have widely spread, unveiling the importance of managing talent in law firms, but the definition of talent management and even the talent concept remain unclear. The majority of firms have adopted the exclusive approach to talent, fitting in the traditional up or-out career model, that prioritizes the role of a small group of more talented lawyers for the firms’ success; but other firms have engaged in more inclusive approaches that value the talents of all lawyers. Empirical evidences for assistant such an option are not available. A gap may be found between the recognized importance of talent management for law firms’ sustainability and the lack of empirical evidences for supporting practitioners. Aiming at contributing for filling the identified gap, this thesis proposes to clarify the talent concept and to support the building of practices for the identification and management of talent in law firms. Alongside with talent management, legal profession theory frames the research setting. The role of lawyering in law firms is addressed in this thesis. Law firms are knowledge intensive organizations composed by knowledge workers who own the means of production. Knowledge is found among law firms’ most important assets, besides client and reputation. Law firms rely on lawyers’ knowledge to provide advisory services to clients. Differently from commercial organizations, law firms have a partnership model. Partners are the owners, managers and producers, which impacts the career features. Career is core to the business model. The career path, defined only by the firm and followed by the lawyers, configures a climber type. Most lawyers join the firm as intern aiming to climb the career ladder towards a partnership that is restricted to a 10% minority. The majority of lawyers leave the firm by own initiative or are counselled out, because different career configurations are not available. For gathering evidences from law firms, this project includes four empirical studies. The first one consists of a pilot study aiming at undercover talent management state of the art in law firms. Five questions were answered by 29 European and Latin American countries. Descriptive statistics were used to analyse the responses. Results confirmed the importance of talent management for law firms and the value indorsed to high performers. The lack of consensus regarding the talent concept emerged in the answers as well as the lack of talent identification methods. Scarce information regarding lawyers’ career preferences emerged too. This information in conjugation with the literature review provided the basis for establishing the research questions. The talent concept, skills for career success, high performers and peers’ profiles, talent identification methods, and career in law firms, are the five main topics explored in the three papers comprised in the project. Talent management was addressed from different and complementary perspectives in the papers: the first and second papers evidenced talent as a construct with substantive existence and addressed the building of methods for talent identification and prediction. The first one – A new approach to talent management in law firms: Integrating performance appraisal and assessment center data – proposed and confirmed the adjustment of a new approach to talent identification that consists of averaging performance appraisal and assessment center ratings for differentiation of lawyers according to overall talent, and in-depth identification of lawyers’ talents, according to the three broad dimensions of lawyers’ profile (hard skills, soft skills and productivity). Sixty-one senior lawyers from a Portuguese law firm were comprised in the sample. Evidence of both a general performance factor and two additional factors were verified using principal component analysis, and varimax rotation verified the three broad factors with job profile’s three broad areas. Predictive validity of assessment centers in relation to performance appraisal was verified with pearson correlation. Comparisons between assessment center and performance appraisal ratings were analysed using paired-sample t-tests and a kernel density function. The second paper – Is talent stable enough to be predicted? A longitudinal study of lawyers’ appraisals – suggested and confirmed the stability of performance rankings over time. A longitudinal design was applied for examining 8 years of appraisal ratings in a sample of 140 lawyers from a Portuguese law firm. Principal component analysis revealed the substantive existence of talent and statistical analysis confirmed stability of performance rankings, in particular among senior, and more tenured lawyers. A recursive feedforward neural network was developed to model and simulate performance rankings over time, thus enabling talent prediction. At last, the third paper – High performers are not superheroes: Bridging exclusive and inclusive talent management approaches for law firm sustainability –, examined the attributes required for lawyers’ career success in law firms in relation with the high performers and peers’ profiles. A broad array of competencies for a lawyer’s career success was revealed to be necessary, whereas high performers have a narrow focus on legal skills, being demystified as superheroes. Their peers add value too by focusing on quality, and having more adaptable mindsets and more relational approaches. In this study 358 participants from 12 law firms of 12 countries were enrolled. Descriptive statistics were used to examine the importance of competencies and abilities for career success and independent sample t-tests assessed the attributes that distinguished high performers from peers. Hierarchical regression verified that innovation is the best predictor of high performance in law firms. A definition and a framework for talent management that bridges the exclusive with the inclusive approaches are proposed taking in the findings of the project: Talent management in law firms consists of the identification and management of a diverse pool of talent, integrating the most talented individuals and the talents of the workforce, thus contributing for business readiness and sustainability. For achieving such result it is proposed to define the firm competency framework according to the business setting. Stakeholders of law firms such as universities, the Bar and clients should be welcomed to provide inputs. Innovation is proposed to incorporate the framework. Performance rankings during the junior level is upheld. Identification of the most talented for the lawyering role as well as the identification of each lawyers’ talents is proposed by averaging appraisal ratings with assessment center ratings. The use of the neural networks is proposed from the middle professional level onwards, when performance rankings are more stable. Talent prediction may prevent the redundant process of appraising lawyers every year against the same profile for ranking purposes. Time spared in the process may be reinvested in career planning and feedback. Personality questionnaires and ability tests may provide additional information for promoting awareness, which is critical to engage lawyers in career self-management. The proposed framework does not impose a law firm’s business model revision. Law firms have a successful model that encompasses allure and prestige. Talent management must support the business model by incorporating added value both for the firms and lawyers. By using the proposed framework law firms may benefit from mapping and forecasting the talent need for business readiness, while lawyers may benefit from a more individualized approach to their talents and careers: different job profiles that lead to different career paths is upheld, according to each one’s profile. The integration of other professionals beyond lawyers in the firms’ talent pool is also suggested. Career self management may be the trigger for successful implementation of talent management in law firms. Organizational psychologists may contribute for this implementation