Baker Mckenzie Case

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Baker and McKenzie Case

What do you call a bus full of lawyers driving off of a cliff? A good start.

1.Strategy and Human Capital Implications
Baker and McKenzie (“Baker”), the largest law firm in the world by headcount, is about to implement a new talent management program referred to as “The Framework.” As a whole firm, Baker is positioned very well in the global market, as they are able to provide legal services to clients in 38 different countries. While they are currently the leader in provider inter-country legal support to client, they are slowly losing their market share as other large firms are expanding globally. Just as well, Baker is losing some clients as they are finding the firm’s services to be very expensive as compared to some of Baker’s competitors. Due to these market factors affecting the legal field, the need for recruiting and retaining highly talented professionals.

“The War for Talent” comes to the forefront of many firms human capital management concerns. Traditionally, an associate who joined a law firm would rarely switch to another firm (referred to as a lateral move). However, the industry-wide trend has been that 78% of associates will transfer to a different firm within five (5) years of joining their first firms. These associates cite many reasons for leaving, but the most common were long hours, lack of meaningful assignments, and unfriendly work environments.” Just as well, associates at Baker and McKenzie may have to wait upwards of seven (7) years before their first promotion to Junior Partner, and additional five (5) years before making “Senior Partner.” This lengthy period before a promotion paired with a lack of dedicated development program can lead to a large amount of attrition of lower level associates. Attrition is not just a problem at the associate level. Industry wide, many partners are being poached by other firms. This can be due to a number of factors, but usually the deciding factor is compensation. Additionally, some firms were firing or demoting equity level partners due to a failure to meet expectations.

On the recruitment side, a number of law students and law schools have come together to try and communicate to firms that incoming associates have expectations beyond compensation. Generally it was assumed that associates solely sought to be compensated for long hours of work they would do; about 100 students from top law schools around the nation have come together to tell law firms that the upcoming generation of associates has a different set of expectations. These students had four simple core requirements: that becoming an attorney at a top firm did not mean losing a commitment to family and the community, a reduced billable expectation to make partner, balanced hour expectations, and that expectations of new-associates of the firm are made clear. The students indicated that they would be willing to take a lesser compensation in order to meet these criteria.

Baker’s current strategy for its Human Capital in the future is to implement a program referred to as “The Framework.” The Framework was developed with the help of consultants from KPMG and PriceWaterhouseCoopers and is based off of their surveys and interviews with current associates, partners, and those who were exiting the firm. The Framework was developed under a chairman who is to be replaced by John Conroy. Conroy is a great supporter of the framework and believes that it could be the basis of the firm’s talent management at every level from recruitment onwards. By utilizing the Framework, Baker should be able to address its human capital needs and effectively develop and retain strong talent—essentially allow their firm to win the “talent war.”

Alongside the Framework, Baker has been addressing their compensation structure of partners. The original formula of the firm awarded partners for their individual accomplishments, thereby turning individual partners into...
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