For most lawyers and law firms, their business strategy is three words long: “Do good work.” The assumption is that individual effort and intelligence are all that it takes to succeed. If it were ever true, it isn’t anymore. Today there’s a breakdown in trust and an uptick in blame that’s getting in the way of “good work.”
A Culture without Trust
Law firms use fear and blame to command conformity and discourage any form of risk-taking. This breeds lack of trust within peer groups, which stymies experimentation and the free flow of information, and turns learning opportunities into potential blame games. Lack of trust and fear of blame also breeds lawyers who are detrimentally risk-averse and believe that they’re not trusted with resources, information, or decisions. This culture without trust has real business consequences.
The Trust Tax — or Dividend
In The Speed of Trust, CEO Stephen M.R. Covey, argues that there’s a “low-trust tax” and a “high-trust dividend” based on trust between managers and employees, and companies and the people they serve. Trust affects two measurable outcomes: speed and cost. High trust means low cost and high speed; whereas low trust means low speed and high cost. This shows up on the bottom line. High-trust companies outperform the S&P 500 by 25%—they also lead in revenue growth. (This boost is the high-trust dividend.)
The low-trust tax should be unsurprising. Research shows that employees don’t feel trusted by their managers. Workplace productivity suffers because these employees who don’t feel trusted exert less effort. Low effort and low engagement combined with high-turnover is an obvious recipe for poor business outcomes. But the reverse is also true. Employees who feel trusted exert extra effort and perform at a higher level thus contributing to higher revenues.
Killing Trust with Blame
So how do we empower employees to be forward-thinking, knowledge-sharing, and innovative? Empowerment starts with trust. And trust comes from the top.
Unfortunately, firm managers have largely been raised in the traditional management model, which is focused on paternalistic rules enforcement. This focus on rules has caused us to conflate accountability with blame. Though both involve responsibility, they come from different sources and work toward different goals.
- Accountability is internally-driven. Accountable employees take on responsibility for the results of their efforts—good or bad. They’ve internalized the firm’s mission as their own and seek to fulfill it through their work. They feel confident enough in their position to tackle difficult work, and sometimes fail, but take those lessons learned to improve future results. Accountable employees learn from the past and focus on the future.
- Blame is externally-generated. Managers usually assign responsibility for bad outcomes to employees with the goal of punishment and deterrence. With blame, because fault lies with individuals, there’s no incentive to identify lessons learned. For managers, the focus is on the past; for employees, the focus is on hiding future mistakes.
Empowered employees are trusted to work autonomously (or to collaborate) and are accountable for the results. This freedom is highly valuable and can lead to breakthrough innovation. Though lawyers tend to work alone, they’re not truly autonomous or empowered. Appearances can be deceiving. While a law firm may tout independence and a culture of accountability, often it’s a culture of blame. Blame—or fear of it—kills trust.
The Effect of Blame on Innovation
When firm managers confuse accountability and blame, they (unwittingly) elevate the importance of conformity and risk-aversion. The immediate impact is that employees feel they’re not trusted and so they’re less motivated. For associates, this means they bill fewer hours, and managers respond by punishing failure to meet billable hour targets, which reinforces the negative cycle.
But the long-term impact is more important — and it’s what kills innovation before it can begin. In this environment, employees are discouraged from proposing changes; and collaboration and knowledge-sharing become a risk. Employees spend more time protecting themselves from other employees rather than working with them. They operate in self-preservation mode, hoarding knowledge and hiding experiments. If anyone is trying new things, that experience and those lessons learned are siloed and secret. This prevents the law firm from leveraging knowledge and building upon it—which is a key contributor for breakthrough innovation.
How to Build Trust
To gain the financial benefits of the high-trust dividend and lay the groundwork for innovation, managers must lead the charge to build trust. According to an analysis of 360 assessments of 87,000 leaders, three key traits are the foundation for trust in business:
- Positive Relationships. Managers must demonstrate interest in the concerns of others, cooperate and resolve conflict, and give feedback in a helpful manner.
- Good Judgement/Expertise. Managers must show they have deep expertise, good judgment, and the ability to anticipate problems.
- Consistency. Managers must follow through on the values they espouse, honor commitments, and exceed obligations.
But those traits may not yet exist in firm managers, so to build up those traits or to rebuild trust in a business, Covey suggests there are three keys actions to take:
- Declare Yourself. Managers should skip the unproductive guessing game and spell out what’s important to them, what they believe, how they work, and what to expect from them as a leader—and seek to hear the same thing about the other person.
- Demonstrate Respect. Managers should show respect for others’ feedback and contributions. Repeatedly. Recognize those contributions in public and in private.
- Deliver Results. Managers must do what they say they will and deliver the results they declare. This gives employees the confidence to follow the manager’s lead.
Repeating these three activities will help build the three essential trust traits.
When managers build (or rebuild) trust, they move toward a culture of accountability and away from a culture of blame. Trust makes it easier to share and consider viewpoints, which improves decision-making and learning from others’ experiences. And trust in others encourages them to ask how they can contribute to achieving the law firm’s desired results. This cultural shift will improve near-term revenue and profitability and create a culture where innovation can thrive.
Lawyers should update their strategy to: “Empower others to do good work.” But this requires trust and a change in law firm culture. Though some changes can be driven from the bottom up, for it to work, cultivating a culture of trust must come from the top—and there’s no room for blame.