Corporate Culture: Your Competitive Advantage

David Maister has written almost despairingly of the absence of trust and other aspects of enlightened management in the business of law (e.g. in American Lawyer earlier this year). He suggests only shifting client needs will change things:

Many firms have collections of great lawyers. The time may be coming when clients will expect them to go beyond this and become effective organizations. Without a prior, explicit agreement on minimum standards, and the resolve to enforce them, many law firms will not function well as firms but will remain what they are today: bands of warlords, each with his or her followers, ruling over a group of cowed citizens and acting in temporary alliance—until a better opportunity comes along.

So it’s especially intriguing to run across the occasional exception to the pattern.

Trust and Law Firms

I had the pleasure of speaking last weekend to the partners of Bennett Jones LLP, Canada’s 13th largest law firm at about 300 lawyers, plus staff.

They ranked number 6 on Hewitt Associates’ list of Best Canadian Employers. That puts them ahead of other Top-50 Canadian employers like Enterprise Rent-a-Car, Johnson and Johnson, and Procter & Gamble.

Their #6 ranking was up from #18 in 2005; up from #26 in 2004; #34 in 2003. And, I believe, no other Canadian law firm has ever made it to number 50.

Hewitt makes clear the financial implications of best employer practices. In Canada, best employers have 20% better five year total returns to shareholders than do their industry comparables. In Australia, growth rates of best employers are double that of the rest, and in Asia, they’re 50% higher. Lower employee turnover, higher engagement rate, etc. Others have also written at length about such issues—again, Maister, as well as Jim Collins and Marcus Buckingham.

Bennett Jones’ partners are visibly collegial. Chairman John Cordeau and Managing Partner Hugh MacKinnon lead their speeches with statements of the firm’s values, and their commitment to enforcing them—particularly collaboration—for growth from their original regional and energy-industry base. As they put it, “we used to think that our competitive advantage was energy. We now think it’s our culture.” I think they’re right.

Bennett Jones doesn’t prove Maister wrong, they probably support his point. Market-based realities—the need for talent attraction and retention, the need to grow into new markets and to integrate—can drive even law firms to embrace management practices shown to work elsewhere, if they have leadership willing to make the commitment.

Who’d a thunk it, eh?

UPDATE: On December 29, 2006, Bennett Jones was voted #4 in Canada’s top 50, up from #6 the year before when the above article was written. An even more remarkable performance. Congratulations to them.