For firms to understand how CSR and Responsibility can benefit them and society is relatively straightforward. Similarly, reporting on what you’re doing as well as some of its impact can be straightforward. Whilst it might take cultural change as well as expense to move to a Responsible way of working, there are frameworks (such as the United Nations Global Compact or the Sustainable Development Goals) that can be followed. Similarly, as mentioned in more general business terms in the first article of this series, the Impact Assessment process used to become a Certified B Corp (as only two firms – Radiant Law and Bates Wells – have done in the UK) provides a solid foundation for integrating a responsible way of working across all areas of the organisations, as well as for reporting on performance.
Moving to a truly purposeful way of working, however, presents challenges for the vast majority of law firms.
First, it requires a move from focusing on the tactical to considering the strategic. Purposeful law firms establish their Purpose and filter it down through every element of their activity.
Second, it requires a unified culture where the value of all stakeholders (internal and external) is recognised and their views listened to.
Third, it requires complete integration of purpose within all areas of the firm, rather than it being siloed within the marketing team or a dedicated CSR team. It needs to be considered across all areas of strategic planning and budget.
Fourth it requires a clear understanding of how you want to make the world a better place. This is a fundamental element that even the most progressive firms appear to be struggling with at the moment. There is a growing voice amongst both firms and trade associations that for the business world to become more purposeful – for clients to be helped to be more responsible and purposeful, by their legal advisors – laws and regulations need to change. Many so-called purposeful law firms see themselves as champions of these legislative changes and view this as their purpose. While there is no denying that, in some cases, legal changes are long overdue and essential (similarly regulatory and taxation changes) this can smack of CSR for the 21st Century, rather than actually being about making a positive, material difference. The cynic could question whether they’re doing it because they believe in the difference it will make or actually because they see it as an opportunity for good PR (rather like the sponsored cake bake of old-style CSR), thereby positioning themselves as ‘thought leaders’ and experts.
The most effective way to create systemic change, within the legal sector has to be, surely, for lawyers to be excellent at what they do, helping their clients to be better and passing on best practice. It may appear controversial but perhaps firms don’t only have to work for social enterprises and charities to be truly purposeful. Perhaps it isn’t necessarily bad to work for oil and gas companies, or technology monopolies as long as you are using your expertise to help them to be better. As Alex Edmans put it: “It’s not the healthy that need a doctor, but the sick”.
So, what’s next?
As we enter a post-COVID economy there will be plenty of law firms planning to slash CSR budgets in a bid to recover from financial losses. Indeed, we may see several of those working on CSR within marketing teams, top of the list for redundancy. In its purest form I might well argue that this is a correct course of action. Limiting the firm to just a CSR policy and programme is unlikely ever to be more than an expense. But slashing this and failing to respond to the bigger picture would be catastrophic in more ways than one. Moving through Responsibility to Purpose isn’t about ‘giving back’, it’s about fundamentally changing the ways a firm operates, advises its clients and contributes to society (both internally and externally). Done properly – and with experts leading the charge – it spans all areas of work and focus, from HR and finance to client relationships and even legal service provision. Done properly, moving to a Purpose business model should increase value, not just in terms of the firm’s bottom line but for our recovering society as a whole.
Investor Larry Fink, of BlackRock, has over $6.3tn of assets under management. He wrote to US CEOs in 2018:
‘With governments failing to prepare for the future people are looking to companies to deliver not only financial performance, but a positive contribution to society, benefiting customers and communities as well as shareholders.
‘Without a social purpose companies fail to make the investments in employees, innovation and capital expenditures needed for long-term growth — and above-par returns to the likes of BlackRock.
Further evidence to support this theory came from DDI’s 2018 Global Leadership Forecast results, which highlighted several financial advantages to organisations that define their purpose and act on it.
‘In a survey of 1,500 global C-Suite executives, DDI found that those companies who both define and act with a sense of purpose outperformed the financial markets by a whopping 42 percent.
Those companies who talk a good game—that is, they have defined their purpose but don’t do anything about it—performed at the mean of all organizations.
And those without a purpose statement and who obviously do not act or behave with a sense of purpose underperformed by 42 percent’.
This has a direct relevance to the ways in which the legal sector should plan its recovery from COVID-19 and future growth. Rather than cutting CSR budgets and forgetting about ‘giving back’ until good times, now is the time to invest in those very professionals partners are considering making redundant. But instead of limiting them to managing marketing and PR activities, firms should consider opening the door to a wider, strategically relevant conversation.
Our case study firm, Mishcon de Reya sums this up as:
The COVID-19 pandemic has highlighted the transformative changes of which we are capable through individual and collective action for the common good. The world of business will never be the same and there has never been a more important time to re-evaluate our values and purpose.
Post-COVID the very best way that law firms can support their clients is in being truly excellent at providing the best, most relevant advice. I would argue that this means not only looking at Responsibility (which may, far from costing firms money to implement, generate cost savings, economies and more effective productivity) but also Purpose (which builds on this cost saving to include opportunities for growth). If the recent crisis has shown us anything it must surely be that the current way of working cannot continue. Six months ago the majority of law firms considered homeworking unsustainable. Now look at us all! Perhaps, therefore, now is the time to recognise that CSR is dead and Purpose holds the key to widespread recovery, transformation and success.