RSS Feed
Finance
London Calling? Beware the Cultural Small Print
December 2005
At one point during the height of diplomatic efforts to present a united front between the US and Britain over the reasons for invading Iraq, Jack Straw, the British Foreign Secretary, slipped in the eyes of the US State Department.
Colin Powell joked that he would he would have to ‘have a word’ with his counterpart. As anyone who has lived or worked in London knows, no phrase can strike greater fear into the heart of an Englishman. Its very understatedness (quintessentially British of course) is the essence of its ominous power. Being told that someone needs to ‘have a word’ with you is never a good thing because that ‘word’ will usually be a bad one. It is the phrase that bosses utter when they are particularly irate and particularly bothered. Powell of course knew this, and had the State Department’s accumulated years of ‘Britgruntling’ and cross-cultural expertise to tell him so.
But law firms, typically, do not. When dealing with the London offices of US law firms, the extent to which cultural differences – of which the story above is a good if facetious example – are underestimated is often amazing. The language is the same - up to a point - and, at least in a broad context, Brits get it: hard work and application within the context of free markets generally produce the goods.
There is a real danger, however, in assuming that because of this everything else is the same. It is not. A lot of nonsense is talked about the ‘culture’ of a firm, or indeed of the profession. Most of it misses the point, but that does not detract from the fact that culture, properly understood, is paramount. It is not, as many lawyers assume, some sort of fluffy but not very practical concept; it’s fact. Get it right and it is the glue that binds people together. Get culture wrong and the consequences are disastrous.
The London market has seen firms go to the financial wall precisely because the US/UK tie-up did not work culturally. There are more who, unless they take stock, look likely to head that way. A glance at the US firms who are generally regarded as having succeeded in the London market reveals that they have not been micro-managed from the
States with a ‘one size fits all’ mentality. Instead, the successful London offices have carefully anglicized their strategies for dealing with their people within the limits of their existing strategic aims.
It’s difficult but by no means impossible. As the number of US firms looking to grow or acquire a London or European presence begins again to increase, partners, management teams and human resource directors would do well to follow such a lead. The stakes are too high not to.
Experience points to three core differences. The first is expectations. British lawyers want and expect slightly different things from their American counterparts. The psychological contract has a quite different gloss in London from that in, say, New York, DC, Boston or LA. The differences range from the detail of personal development and growth, to assessment and appraisal, to pay and bonus structures to vacations – and everything in between.
Firms underestimate their importance at their peril. US firms who arrive in London with a suitcase full of money and not much more often return home to find themselves doubly empty-handed; the money has gone and so, within far too short a time and because there was nothing further to retain them, have the attorneys. This is because as a generation both American and British lawyers are saying “yes of course money is important, but it’s not the only factor.”
Research done by Couraud Consulting indicates that for lawyers in their 20s, 30s and 40s, financial recompense consistently ranks below personal development and growth when it comes to taking decisions about jobs and careers. What constitutes personal development and growth of course varies: from individual, to firm, to nation. The hallmark of truly successful multi-national firms is recognizing these differentiations in the psychological contract and – even if only to a limited extent – responding to them accordingly. The hallmark of the failures is treating the issue as at best a luxury and at worst a distraction. Nothing is ultimately as distracting as a firm’s lawyers decamping to rivals for want of a different approach.
Second, British lawyers are different from their American counterparts when they emerge from their academic cocoon. Legal education here (at both university and post-graduate level) still fails to encourage a truly commercial approach. As a result, lawyers’ abilities to manage and engage with clients is often left wanting, as UK-based general counsel consistently remark. The increased commoditization of the English legal market which, whilst high-value, is ultimately small when compared with that of the United States, means that only committed, engaged and truly commercial lawyers will continue to be instructed. Too few US firms in London have recognized this, and assume that their English lawyers will naturally think as commercially as their US counterparts. The resulting knowledge gap displeases clients and attorneys alike, and both look for alternative providers.
Third, law firms’ human resource facilities are different in Britain from in the US: sometimes worse, sometimes better; often more imaginative but also often less sophisticated. The idea that people are law firms’ only assets has hit home only recently in the UK, so the pool of good, available HR professionals is quite small. Often, firms pay fancy prices for one of the many plausible wannabes who fall outside of that pool, and live to regret it, sooner, or later, and very often both.
London is the financial center of Europe, with very strong commercial links with Asia and around the world. It should be a strategic objective for any ambitious law firm. The secret is to understand its people.
Robin Bynoe is a partner at Charles Russell LLP, a City of London law firm – www.charlesrussell.co.uk, and a member of the Advisory Board of Couraud Consulting, a specialist management consultancy working with law firms on their people strategies – www.couraud.co.uk.