Let’s call a spade a spade. Lawyers don’t have the best reputation for being ‘nice people’. There are endless jokes about sharks, arguments and hatchets that pop up with even the simplest Google search. Yet, as consumers question, increasingly, the role that business has in shaping society – in contributing to a systemic inequality – law firms are being forced to consider their approach at two levels: first, as businesses themselves and second as advisors to countless organisations and professionals. In the previous article in this series I looked at the basic concepts of green and social washing as they apply to business generally. Now we can begin to look at these issues in a more legal sector centric way.
Doesn’t Corporate Social Responsibility do the job?
Let’s examine three crucial terms: Corporate Social Responsibility (CSR), Responsibility and Purpose. There are multiple definitions for each so, unsurprisingly, the legal profession – a system that grounded in fact, clarity and absolute terms – can struggle to know what to do for the best. So let us establish three clear definitions and create an understandable link – a pathway – through from CSR to Purpose that firms can follow.
Corporate Social Responsibility acknowledges that a firm has a responsibility to society. It sets out ‘aims for the organisation to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethically-oriented practices’. However, it is limited in its impact. CSR is often a separate, siloed discipline more closely aligned with marketing, brand management and PR than organisational strategy.
For example, even a law firm that only works for tobacco companies and oil companies could engage in CSR if it donates some of its profits to charity, but CSR is limited and many consider it to be ‘greenwashing’ – absolving the organisation of socially or environmentally questionable activity. Indeed a 2015 report published by Harvard Business Review set out, clearly, that CSR is not designed to impact on business performance, so this is where Responsibility comes in.
A responsible firm aims to serve society through its core activity and how it manages itself. A firm that only works for tobacco and oil companies cannot be responsible, no matter how much it engages in CSR. A ‘Responsible’ law firm acts in the genuine interests of its clients and does not generate unnecessary work to earn more fees. It would not advise a client on a legal, but immoral tax-dodging scheme. It would seek proactively to recruit workers from an ethical and diverse pool of applicants, would publish clear and truthful Gender Pay Gap reporting alongside extended diversity reporting, invest in technology to reduce paper use, aim for energy efficiency, and consider schemes for more environmentally-friendly travel. While CSR focuses on ‘redressing the balance’ through planting trees or sponsoring internships from an inner-city school, Responsibility seeks to change the way things are actually ‘done’.
Purpose takes Responsibility and turns the light outwards. While Responsibility is the general idea that a company should serve society through its core activity, Purpose is the specific way through which it will do that and effect change. In practical terms, a purposeful law firm would seek out ways to change how the legal sector recruits and retains, would work in partnership with other firms and law schools to develop skills and qualifications and increase opportunities, access to jobs and training opportunities, and would deliver genuine excellence in every aspect of legal work, seeking out ways to support clients in being more responsible and purposeful themselves. This last might mean delivering innovative commercial advice that promotes and develops impact investment, establishing a niche expertise in supporting organisations that are changing the way healthcare or education are delivered, or by working for oil and gas companies (shock-horror) in such a way as to help them be more ethical in their dealings.
Through this analysis we see that CSR might have a moderate impact in terms of brand reputation and recognition. Responsibility can have a notable impact on organisational efficiency. Purpose, however, is the only one to have a true strategic impact on growth, bottom line and social value. It is the only one that truly engages with the concept of a business’s not only making the world a better place by its existence, but becoming more successful as a result.
Understanding silos and the pitfall to avoid
Silos present one of the biggest challenges to developing a Purpose culture. In a law firm CSR is usually contained either within the marketing team or assigned to a dedicated employee. It is afforded a budget for philanthropic and social contributions but often there is little link between strategic objectives and the ways in which CSR spends this money. In short, CSR all too often operates almost autonomously because partners don’t see the value. If this is the case, then small wonder that there is no appreciation of Responsibility and Purpose as being different. The silo mentality grows.
In a review for this article it came to light that only five of the Top 100 UK firms employ dedicated specialists – as opposed to PR/marketing professionals or fee-earners/operational directors with committee responsibility – to focus on CSR. Furthermore, among those in the Top 100 that term their work CSR or Responsibility there was widespread confusion and blurring of boundaries as to where they were on The Pathway. By the terminology set out in this article, we could see that, in fact, the Top 100 list contained only eleven Purposeful law firms, with thirty-three being Responsible and the remaining sixty-six delivering only CSR. The responsibility for this must surely lie within the silo mentality.
This simple, somewhat anecdotal study, highlights how the majority of Top 100 firms consider CSR and Responsibility as separate from any strategic decision-making. There is a marked lack of joined-up strategic focus on this subject and, as a result, it is hard for firms to see the genuine benefits and to understand why practises should move from its being an expense (CSR) to its being a strategic investment (Purpose).
Only eleven Top 100 firms made any reference to materially changing how their clients operate, transforming the world of business and creating a sustainable future within core areas (Purpose). Only these eleven firms were able to demonstrate a top-level strategic understanding of Purpose and how it should impact on all areas of the organisation. Sadly, though, even of these eleven firms, only two were able to report on performance in such a way as to show how their commitment to purposeful business had added value not only to all stakeholders but had supported the firm’s growth and overall success.
Let’s hear that again. Only two out of 100 firms appear to have realised that moving to a purposeful way of working makes more money. There is clearly much work to be done in the legal sector. In part three I will look in greater detail at where we might begin, and give an example from the real world.