Following the COVID-19 pandemic and the rise of remote working, workplace culture in law firms is now, more than ever, under the spotlight.  Earlier this year, the Solicitors Regulation Authority (“SRA”) conducted a workplace culture thematic review, which gathered views from organisations, firms and individuals in the legal sector, including more than 200 law firm employees across small, medium and large firms. A quarter of respondents felt that their firm did not have a positive workplace culture.

SRA raising the bar

The SRA has now confirmed that it expects firms to be creating a psychologically safe environment in which employees feel able to speak up about worries and concerns. In future, this means that a failure to create and maintain a positive workplace culture may lead to an increased risk of breaching the SRA’s regulatory requirements. This is particularly significant in light of the recent announcement of plans to increase the SRA’s fining powers from £2,000 to £25,000. As well, SRA guidance is soon to be amended to make clear that where there is a regulatory finding of sexual misconduct, discrimination or any other form of harassment it must result in suspension or strike-off (rather than a fine) unless there are exceptional circumstances.

The SRA is currently consulting on further rule changes that would see a new obligation on the regulated community to actively challenge inappropriate behaviour. This has raised a question mark over the difficulties that junior staff, in particular, may face in raising concerns and challenging senior colleagues. Firms will be expected to do their part to enable such challenges to be raised.

A positive workplace culture

Workplace culture will ultimately define the behaviours, attitudes and values of leaders and employees at your firm. A poor culture can affect employees’ personal wellbeing, ethical behaviour, competence and the standard of service provided to your clients. On the flip side, a positive culture will reduce turnover of staff and help to attract new talent. It can even make your professional indemnity renewal easier.

The SRA’s report characterises “positive” workplace cultures as those with the following qualities:

• Inclusive with core values that are lived by everyone
• Authentic leaders that lead by example and model positive behaviours
• Avoiding “blame culture” and instead encouraging an open, “speak up” environment
• Rewarding and recognising all aspects of work and achievements
• Regularly engaging with employees and seeking their feedback
• Supportive, collaborative teams with opportunities for social connection

What firms should be thinking about

In light of these recent regulatory developments, here are our top tips for law firms:

• Due to the new obligation on individuals and firms to challenge behaviour falling short of the SRA’s standards, there could well be an increase in the number of complaints in your firm. Your managers / partners and HR team need to be upskilled as soon as possible, so that they are prepared to deal sensitively with tricky grievances and disciplinary situations when they arise.
• Ensure that employees are aware of the appropriate channels for reporting concerns. For example, could you implement a confidential mailbox, hotline or a “listener” programme to provide support? Many respondents to the review commented that they did not know how to report incidents within their firms.
• Clear messaging about firm values and training about ethical behaviours for all partners and staff is essential. Only 48% of respondents to the survey agreed that their firm’s values and visions were widely understood by employees.
• Think about introducing peer support or buddy systems, especially for junior employees, so that colleagues have informal routes to discuss their concerns.
• A key issue identified by respondents to the review was concerns being handled badly, for example, complaints being disclosed to other colleagues or forwarded directly to the subject of the complaint. Consider whether your investigations are managed professionally by people with appropriate expertise, training and knowledge. You may want to consider bringing in external investigators for particularly serious or complex matters.
• There is a likelihood that the SRA will begin to look more closely at a firm’s investigations and the outcomes following complaints. Records should be kept of issues which were raised and how they were addressed. Review these periodically to identify and address any problematic themes which may emerge.

The SRA’s principles require firms and individuals to act in a way that encourages equality, diversity and inclusion, to act with integrity and to uphold public confidence in the solicitor’s profession. As the SRA’s fining powers increase and complaints may result in suspension or strike-off, the stakes are higher than ever to ensure your firm is fostering a positive workplace culture.

Don’t hesitate to get in touch with your usual Lewis Silkin contact to discuss how we can help.