Law Firms as Model Employers. A Checklist Concerning Law Firm Personnel Practices: The Basics and Beyond
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1 Law Firms as Model Employers A Checklist Concerning Law Firm Personnel Practices: The Basics and Beyond by T. Jeff Wray Fulbright & Jaworski L.L.P McKinney, Suite 5100 Houston, Texas Telephone: (713) Telecopier: (713) tjwray@fulbright.com American Bar Association Annual Meeting San Francisco, California August,
2 Law Firms as Model Employers A Checklist Concerning Law Firm Personnel Practices: The Basics and Beyond by T. Jeff Wray 1 If you were to ask any partner in a law firm to name the firm s chief asset, chances are that he or she would reflexively answer, our attorneys, or more accurately, our people. In any professional service firm, the talent of the persons associated with the firm is the chief product of the organization, and the ability of those persons to work together toward the firm s goals is the key to the success of the firm. If, on the other hand, you were to ask any partner in a law firm to name the goals and initiatives of the firm for the coming year, it is far less likely that he or she would respond with a topic centered on the partners, associates, and support staff of the firm. Instead, you are more likely to hear of new services, client needs to be addressed, and the like. That is to be expected, because the focus of any good service provider is of necessity on the customer. It is a given that the firm s own house is in order. The task of law firm management is not only to keep the house in order, but to ensure that the talent is there to meet the needs of clients in the future. Basic to that task is ensuring that the firm affords a working environment which attracts and helps retain the best attorneys and professional assistants. It begins with compliance with the various labor and employment laws, which regrettably is not always the case in law firms. No firm wants the distractions or potential for adverse publicity which accompanies an employment-related charge or lawsuit. Good law firm personnel management goes beyond mere compliance, however, to implementing practices and policies which, because they meet the needs of the persons in the firm, permit the focus of those persons to remain on service to clients. The following is a checklist for dealing with minimum legal requirements and more. It is not meant to be all-inclusive. Indeed, entire books are available for employers to use in conducting self-audits of their employment practices. Rather, the following Basics section focuses on problems which frequently are seen in law firms and other professional service providers, and remedies for those problems. The subsequent Beyond the Basics section contains personal observations and ideas regarding how firms can position themselves to become model employers. Logically, the best judge of whether a particular firm qualifies as a model employer should be the employees of that employer. If the employees of a firm are very satisfied with all aspects of their worklife, then the fact that the employer may not offer a benefit afforded at other firms (or valued by human resources mavens) would appear to be inconsequential. Likewise, one would hardly call a firm whose employees are generally dissatisfied a model employer, 1 Partner, Fulbright & Jaworski L.L.P., Houston, Texas. 1
3 even if it offers a panoply of benefits and currently fashionable programs. Accordingly, a firm which desires to be a model employer perhaps should focus on enhancing communication rather than on specific programs or benefits. If it builds an environment where communication flourishes and is responsive to the feedback it receives, the attorneys and support staff will let their needs and desires be known. Civil Rights and Diversity The Basics Most Common Problems in Law Firms: Absence of training; attorneys who fail to abide by firm policies. 1. Publish policies regarding the firm s commitment to providing equal employment opportunity and to diversity. 2. Publish a policy against all forms of harassment (not just sexual harassment) containing a complaint procedure that allows a victim to by-pass the harasser, and which assures an absence of reprisals. 3. Republish EEO, diversity, and harassment policies on a regular basis. Your intranet or system makes this easy and extremely cost-effective. 4. Train all attorneys and other supervisors on the requirements of the law and firm policy. As many personnel problems (and lawsuits) are the result of rude behavior rather than a violation of the law, also conduct lessons in civility spell out, for example, that attorneys are expected not to raise their voice when dealing with other attorneys or other employees. Those who do not need the lessons will probably recognize those in your organization who do. 5. Enforce the policies against any self-anointed demigods who think the rules do not apply to them. No rainmaker brings in enough business to pay for the harm to the organization in retention and recruitment (let alone punitive damages) caused by unchecked harassment or other discrimination. The Employment Relationship Most Common Problems in Law Firms: Failure to communicate expectations; failure to communicate dissatisfaction with performance before termination. 1. If employment is in a state where employment at will is permitted, and the firm intends that relationship, that should be spelled out in offer letters or other hiring documents. 2
4 2. The firm should use a structured performance review system providing feedback to attorneys and support staff on a regular basis, at least annually. Some top firms engage in semi-annual evaluations. 3. Evaluators should be trained in the importance of candor and accuracy in evaluations. A system for ensuring feedback, either from the evaluator or the committee or administrator responsible, should be implemented. Wage and Hour Matters Most Common Problems in Law Firms: Non-exempt employees who work in excess of 40 hours without receiving overtime; failure to keep records of hours worked; legal assistants classified as exempt employees who fail to meet duties test for exemption 1. Even the smallest firm is subject to the record-keeping and other requirements of the Fair Labor Standards Act (FLSA) and state wage and hour laws. Ensure that the firm has a system for non-exempt employees to record all hours worked (usually a weekly timesheet signed by the employee) and retains records for the period required by law. 2. Advise support staff to record all hours worked. Ensure that attorneys understand that the firm s policy is to pay for all overtime worked and that they may not permit employees to work without reporting hours worked. 3. Classify legal assistants as non-exempt employees and pay them overtime unless you are sure you can prove that they meet the duties test for white-collar exemption under FLSA and any state law. This has been an area of interest for the Wage-Hour Division, with mixed results reported. 2 Clearly, persons denominated legal assistants who are performing primarily clerical tasks are not exempt. 4. Ensure that salaried employees are not docked for absences of less than a day, or for absences for illness of less than an entire workweek, as that will negate exempt status under FLSA. This is most often a problem when an exempt employee asks to be docked rather than have his or her Paid Time Off, sick leave, or vacation time charged. (Employers may charge such plans when an exempt employee is absent, and may dock the employee when time allowed under a bona fide sick leave plan has been exhausted.) 2 Revisions to the Department of Labor s white collar regulations which were proposed earlier this year eliminate the requirement that administrative employees customarily and regularly exercise discretion and independent judgment. Firms will wish to evaluate their classification of legal assistants in light of the final rules, which had not been published as of this writing. 3
5 Beyond the Basics 1. With any program, success begins with commitment from the top. Accordingly, if the firm desires to be a model employer, its leaders need to articulate that position in terms consistent with the firm s culture. Employees of law firms, including attorneys, are no different from those in other industries in that they appreciate hearing from the employer that the organization is committed to providing a good working environment, values people, and solicits employee input. 2. Regularly use committees or ad hoc task forces to identify and examine quality of work life issues and make recommendations to the firm governing body. Committees should be diverse in composition and should include partners at all levels. In most law firms, the leadership tends to come from the older generation, and younger attorneys, particularly those with younger children, may have very different worklife needs and ideas. Committees should also include associates and support staff, or at a minimum be charged with obtaining input from associates and support staff. Rotate membership regularly to ensure communication with all constituencies of the firm. 3. The firm should take advantage of the experience and training of its labor and employment lawyers. A labor and employment attorney should be on every committee with responsibility for making decisions or recommendations affecting firm employees, not only because those attorneys should be able to identify any potential discrimination or other legal issues, but because they are more used to dealing with perception and communication issues than non-litigators. They are used to helping clients make decisions which are not only fair, but which will appear fair if challenged, and can employ this expertise to assist the firm in its efforts to communicate with its employees. 4. For the same reasons, one of the firm s labor and employment partners should be designated as the resource person for the administrative staff in each office. Administrators should be encouraged to discuss issues which they perceive may be a problem with the attorney, even if no legal issues appear to be evident. 5. Administrators should be encouraged to participate in their local human resource organizations, and not solely those which include law firms. The best ideas for innovative practices are more likely to come from business than from other firms. 6. For the same reason, firm labor and employment and other attorneys should be attuned to asking clients about any new practices and programs. Most clients will be pleased that you asked and happy to help you emulate. 7. The firm promptly should take advantage of the opportunities its employee benefits and tax attorneys are familiar with. Some firms adopted 401(k) and tax-free medical savings plans years after their attorneys were assisting clients in their implementation. 4
6 8. Conduct exit interviews for all employees. The firm or office head should conduct such interviews with respect to departing attorneys, and seek candid comment regarding all aspects of the departing attorney s worklife. Similarly, even if the firm has strong administrative management, it would behoove firm leadership to participate in exit interviews of support staff on an occasional basis. Conclusion There is nothing inconsistent between being a model employer and a model provider of legal services. On the contrary, those firms which provide an outstanding working environment are those which are likely to attract and retain the brightest and most dedicated attorneys and professional assistants, which is a prerequisite for outstanding service to clients. 5
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