8 Tips for Conducting Layoffs With Compassion
/As the legal market evolves, there will be necessary shifts in job design, staffing levels, and skills needed to be an effective contributor. No matter how hard we try to retrain and redeploy valued employees (and we are, aren’t we?), law firms and law departments will inevitably need to part ways with some of their lawyers and professional business staff. And of course during rocky times, a period possibly signaled by the current global pandemic, nearly all businesses will need to adjust their workforce. The right way to go about this necessary but potentially messy business is with compassion.
Be Transparent. The first step is to acknowledge that tough times require business owners to make tough decisions. It’s incongruous and disingenuous to pretend, particularly in the face of overwhelming evidence of economic upheaval and systemic market change, that the organization is spectacularly out-performing both its competitors and its own lofty internal expectations… but using this time to get rid of under-performing employees and malcontents that the indulgent leaders have allowed to tarry for too long. In a recent communication, the leaders of Qantas, the Australian national airline, concisely and compassionately laid out the unassailable rationale for a devastating layoff.
In the last recession, a number of law firm leaders published rosy outlooks while announcing layoffs of under-performers. Such fabrications weren’t credible then. They’d be even less credible today. Frankly, the key message the law firm leaders would be conveying is that they’re incompetent financial managers during good times, allowing clients and colleagues to bear the brunt of their inaction in dealing with under-performers. The message they should clearly convey instead, if the circumstances call for it, is that the firm is making necessary adjustments to align its workforce with current demand. Let’s trust our employees and customers with the truth.
Be Ready. For well-oiled businesses, a layoff or reduction in force (RIF) is not a one-off, but simply another, albeit less frequently utilized, business process in its employee acquisition, development, and retention tool kit. Poor performers exist in all organizations. Healthy organizations acknowledge this by establishing for all roles clear accountabilities, performance metrics, performance review processes, and detailed protocols for identifying, escalating, and ultimately taking action when someone is not meeting expectations. It’s unwise to allow these situations to linger, but occasionally there are strategic reasons to batch a few of these. Simply wanting to avoid an unpleasant conversation is not viable, and should forever eliminate the supervisor, and the Human Resources manager who allows this, from future promotions until they fully grasp their own job responsibilities.
Have a Process. Does your law firm have position descriptions with requisite accountabilities for each staff position? For each associate? What about partners, do they adhere to a common set of values and principles that not only clearly define what it means to be an owner of the business, but do they also take actions that demonstrate living these values each and every day? Does your law firm have a performance management system that includes annual goal setting and periodic progress review? Do you offer internal training, or have a ready list of external resources, for your lawyers and business professionals skills development? Do you have a standardized approach to measuring and documenting performance? Does your incentive plan align with your performance management program. Or, can a lawyer act like an asshole, take actions that are more selfish than selfless, but so long as they generate a solid book of business, they get paid and left alone?
Rely on Experts. If the answer to any of these is no, then when it comes time to conduct a layoff, you’re going to get it wrong. You’re likely to combine dealing with under-performers with shifting resources around with appeasing politically well-connected insiders and possibly even clients, and you’re going to create a cacophony of mixed messages. Tackle these critical human resources challenges now. Rely on competent human resources professionals to guide you. Some of you have very nice HR people who can administer the above, but who can’t design or implement what’s needed. You may need to upgrade, or bring in some short-term assistance.
Use a Scalpel, not a Hammer. It’s also inefficient to tackle a layoff as an exercise in equality. Don’t ask every group or practice or team to tighten their belts an equal 10%, or advise leaders to reduce their headcount by an equal amount. That sort of unsophisticated management can be done in a spreadsheet and doesn’t require business acumen. It’s as nonsensical as addressing an automobile flat tire by inflating all tires equally rather than putting air solely in the one that needs it most. Good business leaders have a nuanced understand of the resources needs of their various teams, and they know that some groups rely heavily on paralegals, while another has a high technology footprint, and still another is highly leveraged with associates, even as another delivers the work primarily at the partner level, and so on. Avoid taking an “across the board” approach and instead adjust staffing levels based on the impact to each individual product line. Don’t starve the growth engines while allowing complacent groups to continue avoiding necessary process improvements. Inevitably you’ll have to deal with thorny political issues, but make those the one-offs rather than the norm.
Keep the Keepers. Think very long and very hard about downsizing a critical resource, someone who is so spectacular, such a hero, that the organization is simply better off with her in it. While we need to look at different groups in isolation, we also shouldn’t overlook when we have star performers in one area who are significantly more valuable than lesser performers elsewhere. It can be more complicated, but it’s often better to retrain and redeploy excellent talent than to let them go while retaining lesser talent elsewhere.
Invest Accordingly. Layoffs can be costly, but the short-term financial impact of a decent severance package with job search assistance can be dwarfed by the potential long-tail cost of treating employees poorly as they depart, thereby generating lifelong animosity. In today’s smaller and more-connected legal marketplace, that associate you lay off today might be your key client’s new relationship liaison tomorrow. That nice fellow in IT who was shown the door three weeks prior to reaching another vesting level in his 401k might live next door to your top competitor’s recruiting partner. And legal journalists take a lot of calls from disgruntled ex-employees who might otherwise feel compelled to maintain family secrets if they have a reason to do so.
Preserve Dignity. And absent documented threats by an outgoing lawyer or employee, there’s almost no good business reason to surprise people with a midday layoff notice, and then escort them to their desks to gather their personal effects and out the door in full view of their colleagues. Even the worst performer should be allowed some dignity and privacy, so be even more generous with valued contributors whose only mistake is being present when economic conditions require some tough decisions.
The firm’s ultra conservative general counsel and traditionalist human resources professionals will often urge an “instant sever” policy in all cases, in order to eliminate all risk and/or to avoid accusations of unfairness. It’s perfectly reasonable to terminate access to firm networks and confidential files in certain situations. After all, even the most ethical contributors might be inclined to copy a client list on the way out the door. But there’s a whole range of options available to protect the firm’s assets while providing sufficient time and access for the employee to depart in an orderly and dignified manner. Avoid the one-size-fits-all approach, both ultra conservative and ultra cruel, of the cardboard box parade.
There are plenty of examples of organizations performing poorly in these situations. If you’re involved in planning for a layoff, tack a photo of your kindly grandfather, your beloved mother, and your free-spirited child on the bulletin board. As you plan each action you're about to take, consider how you'd explain yourself to them. Better yet, consider how you'd react if one of them called you to describe the manner in which they were laid off today. There are pretty good odds that this conversation will take place at some point... act as if you’re the one receiving rather than making that call. Because you never know.
Related articles on this topic can be found here and here.
Timothy B. Corcoran is principal of Corcoran Consulting Group, with offices in New York, Charlottesville, and Sydney, and a global client base. He’s a Trustee and Fellow of the College of Law Practice Management, an American Lawyer Fellow, and a member of the Hall of Fame and past president of the Legal Marketing Association. A former CEO, Tim guides law firm and law department leaders through the profitable disruption of outdated business models. A sought-after speaker and writer, he also authors Corcoran’s Business of Law blog. Tim can be reached at Tim@BringInTim.com and +1.609.557.7311.
