In the corporate world annual reporting has been a staple of the New Year, an opportunity to share highlights and news of financial performance. But in the legal sector, it’s something reserved for a handful of the very largest, global firms, with a handful of others doing round-ups of the legislative year but not their own performance.
We think this is a massive missed opportunity and the COVID-19 crisis has made this even more so. We’ve written a great deal about the shift in consumer behaviour towards more purposeful suppliers. And, in our recent predictions for 2021, we’ve highlighted the likely boost in client engagement and expectations for communication. So, it stands to reason that law firms need to be looking out for ways to communicate with the outside world in a more ethically-focused way. What do we mean by this?
An annual report can be a wonderful opportunity to show readers the sort of firm you are – your approach to doing business. And it’s this that, ultimately, makes the ‘sale’ with potential clients. In a post-COVID world consumers are seeking reassurance that suppliers and advisers share their values and not only talk about them but demonstrate them day-to-day. This is where the annual report should come in handy.
One of the best things about the B Corp Certification programme is that it requires those that reach the hallowed halls of qualification to produce an annual impact report.
Here are some great examples of these:
- Cook – http://cook.blob.core.windows.net/assets/uploads/Purpose_Report_2020.pdf
- Ellas Kitchen – https://www.ellaskitchen.co.uk/static/images/sustainability/Ella-s-Kitchen-GSWD-FY18.pdf
- Patagonia – https://www.patagonia.com/static/on/demandware.static/-/Library-Sites-PatagoniaShared/default/dw824fac0f/PDF-US/2017-BCORP-pages_022218.pdf
But plenty of you out there will be saying that you aren’t far enough down the Purpose Pathway to be contemplating purpose reports and impact reports.
That’s where the combined – or blended report comes in. Take a look at this: https://www.danone.com/content/dam/danone-corp/danone-com/investors/en-all-publications/2019/integratedreports/annual-report-danone-2019.pdf
Frankly, although financial reporting is a legal requirement for any firm, nobody wants to know only how much money you’ve made (unless they’re a shareholder, we suppose). It’s likely they’ll also want to know highlights of key cases you’ve worked on, noteworthy client wins and important press coverage/articles as well as celebrations of key personnel that have stood out, changes internally towards a more responsible way of working, your equality and diversity report, community links and projects, continuing education and other things that not only showcase your expertise but that demonstrate people can trust you.
A B Corporation (and all round decent people – they do our website hosting for us and we can’t recommend them highly enough) Leap, explains their views on Impact Reports versus Annual Reports:
We are moving from the 20th century system of shareholder capitalism (concerned only with financial growth) to a 21st century system of stakeholder capitalism where a business is responsible to all of the people with a vested interest in the company (and on whom the success of the business depends), and the environment that it operates in. An impact report is a 21st century document that covers people and planet, as well as traditional financial performance.
An annual impact report is a public document that shows that it is possible to do good whilst doing good business, and share how it has been achieved. It demonstrates a business’ commitment to transparency and to being accountable to stakeholders rather than just shareholders for its social and environmental impact, past and planned, and facilitates conversations between all involved.
If we look at the blended Danone report (which we think is ideal for law firms to use as a template) we can see that it includes the following sections:
- About Danone – an introduction to the organisation that is an opportunity to communicate value, priorities and approach.
- Key milestones – this includes a wide range of things from organisational changes to new product lines. In a law firm this could include mergers and acquisitions, key cases worked on, major events, awards and so on.
- Interview with the CEO – in a law firm this could also include an interview with a trainee as well, to show how the firm approaches succession planning and CPD.
- Progressing towards our 2030 goals – in Danone’s case this relates to Environmental goals but it could just as easily be other cultural and organisational goals.
- Empowering employees – changes in how employees are managed and empowered, with a view to co-ownership.
- Celebrating 100 years – a look back at what has changed.
- Collective action – things that they’re doing to make a difference now.
It then goes on to have sections on financial performance across each area of the business, social performance (talking about HR) and innovation/technology as well as having an ‘at a glance’ section covering the key headline metrics. All of this could be easily applied to a law firm.
Over the years we’ve helped to write many annual reports but few have included this sort of information and we think that’s a massive missed trick. It’s time for law firms to start realising that the days of CSR are dead. Clients are demanded internal responsibility and external purpose. And your annual report is a golden opportunity to demonstrate all of this.
If you would like help understanding how responsibility and purpose can be better communicated, or producing your annual report, please contact us on firstname.lastname@example.org.