Human Resource Plans and Organisational Context: A Case of Clifford Chance - Assignment Example

1. Carry out a PESTLE and SWOT analysis of a London law firm, clearly identifying how these factors may affect Personnel/HR planning. Company Profile Clifford Chance of the UK is expressed as being a “truly integrated law firm”, giving crucial legal advice to financial organisations, commercial firms, and state and regulatory entities. Its ultimate goal is to provide thorough, high quality legal advice that is borne out of technical expertise and a clear understanding of the business environment in which its customers are niched. It has 28 offices in 19 nations spread across the America’s, Asia, Europe, and the Middle East. Moreover, it provides profound, locale-specific advice, with a distinctly international approach. Its lawyers give sound legal advice globally and locally; under common law and civil law systems; in regional and overseas transactions; on daily operations and the most demanding ordeals. The organisation revolves around six international practice areas, namely, banking and finance; capital markets; corporate, mergers and acquisitions; real estate; tax, pensions and employment. There are dedicated, expert teams that are tasked to deliver the most perceptive advice. Its vision is quite lofty: “to be the world’s premier law firm”, which underlies all of its corporate strategies. It intends to attain this goal through consistent investment in knowledge management and information, and by sustaining an organisational culture that permits people to consistently high standards of customer service in all its satellite offices. Currently, it is the biggest law firm worldwide, and it acknowledges its responsibilities that go beyond its customers’ work. By actively engaging in its pro bono program, arts, and charitable initiatives, its workforce is encouraged to develop solid foundations with the communities in which it operates (Clifford Chance website, 2005). The following paragraphs present the PESTLE and SWOT analyses for the firm: PESTLE Analysis Political The Labour Party has expressed its intentions on the use of offshore jurisdictions. It has undertaken a full overhaul to counter what it assesses as offshore loopholes. The strongest criticism is reserved for offshore trusts and companies where Labour argues there is continuing abuse (The Lawyer, 1996). Undoubtedly, the benefits of the present taxation system for those domiciled outside the UK are considerable, nor that their collective voice in making representations to protect those benefits is strong. For Clifford Chance’s human resource planning, this means more ease at attracting international, rare talent because of the legislation on a substantially reduced tax rate. Economic The Lawyer.com (in Bryne, 2005) as extended its yearly coverage of the UKs top 100 firms by turnover to include the next 50 largest. These are organisations with turnovers of between approximately £5m and £15m, with partner numbers of between 10 and 40. It is the most thorough and specific review of this dynamic group of firms ever. These groups reflect the UK’s economic vitality. This is the group that has the rising stars locally, regionally and nationally. There may also be one or two whose best days are behind them. Gateley Wareing, Lester Aldridge and Harbottle & Lewis all featured in last years Top 100, but only Harbottles was a mainstay. But the firms turnover has been all but static for three years – an issue that has been resolved this year (Bryne, 2005). Many, if not all, of these firms may be confronting the challenge that the opening up of the legal market may represent and will be realigning their strategies. The Rising 50 may increasingly opt for the business which is traditionally the arena of their larger competitors in the top 100, where growing capability, refocusing existing resources on more profitable business and competitive pricing would offer a strong proposition (Bryne, 2005). This would have an impact on HR planning in terms of attracting and retaining talent. Since competitors of Clifford Chase are slowly catching up in terms of size, filling up manpower requirements would necessarily be more competitive and more demanding. Social One trend that Clifford Chase should be wary about is the phenomenon of attrition (Begum, 2005). Denton Wilde Sapte (DWS) has suffered the largest turnover of associates among the UKs top 50 law firms, with almost a third of its junior lawyers resigning during the last financial year. Last year, 32.07 per cent of assistants left DWS, compared with a 14 per cent average assistant turnover rate at the UKs top 50 firms. The alarming figures are presented in the first-ever survey of assistant attrition rates, which was carried out by The Lawyers sister title Lawyer 2B. DWS expressed that this turnover rate is attributed to the departures of teams from the firms technology, media and telecoms and insurance departments. Other law firms that performed badly in the survey included Ashurst, which had an assistant turnover rate of 26 per cent. Meanwhile, Allen & Overy (A&O) and SJ Berwin each had an attrition rate of 25 per cent. A&O and Ashurst declined to comment (Begum, 2005). For the HR planning function, this implies that candidates have the bargaining power in whether or not to accept a job offer, since their posts and skills are highly marketable. Moreover, this indicates that Clifford Chance has to be more competitive in the compensation package that they offer to prospective candidates. “Law firms have to be very prudent about looking after their associates because, as confidence in the market picks up, people will start moving around again”, says Joanne Street, a business manager at Hays Legal. Technological Southall (2005) cites the possibility of e-conveyancing and e-litigation. On knowledge management, law firms in general are still largely in a state of flux and have not thought through their business solutions. Other developments include the development of paperless files by the Legal IT Innovators Group (Southall, 2005). Based from UK’s Land Registry, the goal of e-conveyancing is to "utilise advances in technology by creating a system that reduces the delay and anxiety which can be experienced in the house buying process". An instance of how predominant this perception has become is seen on the PSA Property Forum (www.psa.co.uk, 2005). The plan was to feature a working e-conveyancing system based in England and Wales by 2006, although this has been modified to "2006 to 2008" (Perry, 2005). Potentially, this system will allow the electronic conveyancing of documents; majority of conveyance processes and communications to be on-line; simultaneous completion and registration, thus removing the ‘registration gap’; electronic fund transfers to coordinate payment of fees and balance transfers; and increased availability and transparency of chain information. The implications of this change ought to be analyzed thoroughly, considering the formidable technological issues that may come with it and exert an impact on the HR planning function. Legislative For several years now, the majority of UK law firms have not required incoming partners to pay for goodwill, but have skewed profit-sharing towards those who have been partners the longest. However, now there are forces at play - age discrimination, the Clementi reforms and tax - which could signal the end of lockstep and the return of payments for goodwill in some firms (Ashford & Bevan, 2005). Although widely practiced, lockstep has not been without its critics. The main issue is that lockstep does not sufficiently reflect current contribution to profit, whether by marketing success or fee income. It is conventionally the younger partner, who is at the bottom of the lockstep and who has had particular success in, say, fee income, that normally progresses the merit argument. A new factor that merits consideration next year is the age discrimination legislation. Many suggest that lockstep is by nature, age discriminatory. It is, of course, a basic feature of the lockstep system that the more long-serving partners have a greater share of profit and that they are typically older. This is likely to make those firms which are not prepared to take the risk of discrimination consider a prompt change to a purer merit-based system. (Other firms may take a calculated risk that no partner will object to a system that will ultimately benefit them.) Assuming all partners contribute equally, a merit system erodes from senior partners the benefit of a guaranteed greater profit share, which lockstep offers. Favourable tax outcomes, with proposed regulatory changes in age discrimination and modernisation of the profession, may all be factors in favour of the capitalisation of goodwill. Although many lawyers will earn a regular and reliable income over their professional lives, many have wondered and some become jealous with the prospects of their clients realising a substantial capital gain. This will definitely have an effect on the manpower planning function, particularly in the attraction and retention of new partners. Environmental A groundbreaking legal watchdog has been created, charged with ensuring governments abide by a new international convention on environmental decision-making and information dissemination. The Compliance Committee of the presently reinforced Aarhus Convention will, from October 2003, have the right to hear out complaints from individual citizens and non-governmental organisations (NGOs) that their governments are not complying with its terms (Nuthall, 2003). A memorandum from the UN Economic Commission for Europe (UNECE) asserted that the committee would "be obliged to make a determination on these cases. The development of an innovative compliance mechanism under the Aarhus Convention has been of particular interest to international lawyers." NGOs and governments can nominate candidates for the committee, who would henceforth serve in a personal capacity. Information held by the committee would only be confidential in some situations, such as when the person complaining wishes to stay anonymous. UNECEs director of the Environment and Human Settlements Division Kaj Bärlund said: "Its crucial that we put more emphasis on implementing [international] agreements that have already been adopted (Nuthall, 2003)." In view of these, Clifford Chance may require hiring more manpower with expertise in this line / area, and may find it more difficult to do so because such expertise may be scarce. SWOT Analysis Strengths Undoubtedly the company is competitive in terms of size, being the world’s biggest law firm. This implies a more complex HR planning process – integrating the factors of technology, culture, globalization and reach, among others. Clifford Chance has a distinctly strong corporate social responsibility agenda. As an organization, it has a pledge of making a worthwhile positive contribution to society; it carries out this thrust by enhancing access to justice, and managing its impact on the environment. It also upholds a community affairs programme for pro bono legal work; community education and charity initiatives; and support for the arts (Clifford Chance website, 2005). This will definitely facilitate the placement of manpower in its HR planning as more and more young individuals are becoming increasingly aware of the importance of this facet in employer choice. It also has an explicit set of corporate values, to which its employees advocate. It attributes its rapid success to its core values of ambition, commitment, quality, community; and employees can attest to the fact that indeed these values are upheld and lived by the firm’s top management (Clifford Chance website, 2005). Related to this is the fact that it enjoys good standing among prospective lawyer applicants throughout the world. This is again attributed to by the fact that they have an internally equitable and externally competitive compensation package. This facilitates the task of satisfying its manpower complement requirements. Weaknesses Griffiths and Jordan (in O’Connor, 2003) have described the internal politics of a firm that more frequently than not may be likened to the Tory Party – “the plots, the turf wars, the leadership rumours, the media obsession…”. The same day the firm had revolted against a proposed new compensation scheme, rejecting proposals to revamp the lockstep. Only 70 per cent of partners voted in favour of the new system, a tragic 5 per cent short of the majority needed for its implementation. The outcome was a crushing blow for the firm’s management, and in particular for the compensation review committee. Already, the rejection of the scheme has presented fatal to the firm’s intent of attracting and retaining US rainmakers (O’Connor, 2003). One other weakness is the fact that the organization seems to be suffering from information overload. There seems to be a common observation that the company is encouraging growth for growth’s sake. Clifford Chance ought to be more clever by effectively learning fro boom-and bust cycles (Southall, 2005). Hodgart (in Southall, 2005) notes that it is cost savings rather than increased fees per fee earner that is causing the seemingly improving law firm outfit profit margins. Still another weakness that the firm must address on is the fact that competition and the motivation to increase profitability. This requires that the company be able to hire more proficient, proactive and competent strategic leaders within the firm, with both its core and support businesses (North, 2005). Its HR planning process including its selection of top executives – chief operating officers, chief financial directors, and chief information and technology directors – are not yet fully systematized. In other words, the system is not yet fully competency-based. Because of the lack of this overriding anchor, there is a ripple effect on succession. No clear line of succession is laid out for most of these firms. For numerous global law firms, these functions have substantially been modified and will continue to change as more organizations become more open to using structures more similar to corporate management (North, 2005). Opportunities One opportunity that Clifford Chance can take advantage of is working towards a single back-office platform, since its different satellite offices now work with different performance management systems under varying jurisdictions. It may also want to consider the complete convergence of e-mail systems onto Microsoft Exchange 2003 and the implementation of a web content management system to create a global intranet for the organization. Another opportunity would be to encourage Clifford Chance’s CIO to take on a more strategic role. The evolution of this particular role has been distinctly noted by Gerard Neiditsch of Mallesons Stephen Jaques in Australia (winner of the 2005 Legal IT Forum’s International CIO of the Year Award), as follows: "In 2000, CIOs all around the world were in the midst of an information and societal shift which, like all major changes, leads to confusion and exaggerated expectations. It was unclear what changes these new internet protocol-based innovations — not just the web, but Voice over IP, mobile data and multimedia services and so on — would deliver. With the almost instant deflation of this bubble in 2001, the status of a CIO as a ‘prophet of great things’ suffered a major blow. Many have not recovered their position at the ‘executive table’." "If anything, CIOs now need to think through the consequences of technological change more diligently, and work with other members of the executive more closely to influence the business strategy of their organisations. This is as true for law firms undergoing fundamental change in the face of a shift in buying patterns as for their colleagues in many other industries (North, 2005)." In terms of HR planning impact, this points out the imperative of carefully nominating and selecting a CIO with a strong strategic perspective. Threats One probable threat to the organisation is the world’s largest law firm merger of DLA and Piper Rudnick Gray Cary. The global chief information officer, Daniel Pollick, asserts that it is not yet a full financial merger, and that the greatest challenge is to be able to synergize “two very autonomous and deeply thoughtful IT functions – and aligning them so that they think the same way. (Kieran, 2005). They are already half-way through a three-year, three phase plan that involves first, “gluing things together”; second, aligning strategy and processes in key areas; and third, is the full convergence of IT systems (Kieran, 2005). 2. Identify the specific ways in which the Personnel function contributes to the overall success of an organisation. Based on the Conference Board research of Mercer HR Consulting, almost two-thirds of HR executives expressed that their companies are involved in the HR transformation process described as the "re-creation or re-invention of the human resource function" (Mercer Consulting, 2002). Line and HR executives concur that the five major human resource goals are: developing leaders, recruiting and retaining a quality workforce, increasing workforce productivity, aligning compensation with business strategy, and developing employees. Moreover, the Personnel / HR function is perceived as taking a lead role in three major areas, namely, reward and compensation structures, leadership development, and culture change programs (Mercer Consulting, 2002). These functions point to the fact that HR has a critical role in ensuring and sustaining a motivated and empowered workforce (SPI Technologies, 2003). With these, HR can perform a very strategic role by drafting programs that are anchored on the company’s competitive strategy, organizational readiness for globalization, structure for international operations, experience in managing international operations, and local countries’ legal and cultural environments (Mercer Consulting, 2002). 3. Describe how an organisation can monitor the composition of its workforce (i.e. numbers, skills, grades, ethnic origin, etc) and identify the purposes that such monitoring fulfils. Suggest how a computerised personnel system does/can help with monitoring and planning the workforce. One way for an organisation like Clifford and Chance to monitor the composition of its workforce is to employ an integrated HRIS; more than specialized software, it conventionally provides a more thorough, integrated solution. This encompasses multiple HR functions apart from workforce planning: including benefits administration, self-service, and training administration, all in one (Copeland, 2004). The HRIS approach has been particularly appealing for small to mid-sized companies who intend to have a cost effective means of streamlining multiple HR functions. The main advantage of an HRIS system is the “integration of multiple HR functions under a single roof, making it very easy to access and analyze a wide range of company data.” 4. Suggest how this information on the workforce can be used to plan future human resources. The manpower planning module of the systems sends the recruitment process owners an alert 2 months from date of recruitment for a position as specified in the manpower plans. The recruitment module will have configurable interview evaluation sheet to match the competencies of each job, do a salary comparison after interfacing with the compensation module to come up with a win-win compensation strategy (GlaxoSmithKline Consumer Healthcare, 2005). Moreover, the automating all internal HR processes will HR personnel to allot maximum time on analysis and decision-making and play a more strategic role in Clifford Chance. The HRIS solution will be meaningfully integrated with the Intranet as well as the backend ERP. The Intranet offers numerous other workflow like leave management, travel management, on-line meeting rooms/guest house bookings and a variety of other features. Such an HRIS system will allow the construction of an effective database that may be used for manpower planning, and for several other uses, including self-service, on-line performance reviews, applicant tracking, succession planning, and metrics (Copeland, 2004). References “Clifford Chance: a truly integrated law firm.” Retrieved on November 15, 2005 from the Clifford Chance website http://www.cliffordchance.com/home/default.aspx Ashford, P. & Bevan, S. (2005). “Season of goodwill.” Retrieved on November 15, 2005 from The Lawyer.com website http://www.thelawyer.com/cgi-bin/item.cgi?id=117654&d=122&h=24&f=46 Begum, H. (2005). “Dentons posts worst rate of assistant attrition in the UK.” Retrieved on November 15, 2005 from http://www.thelawyer.com/cgi-bin/item.cgi?id=117577&d=122&h=24&f=46 Bryne, M. (2005). “The rising 50: law firms to watch.” Retrieved on November 15, 2005 from The Lawyer.com website http://www.thelawyer.com/rising50/movingonup.html Copeland, B. (2004). “Leveraging HR technology for business success.” Retrieved on November 15, 2005 from http://bostonworks.boston.com/nehra/060704.shtml Flat, K. (2005). “Managing global change.” Retrieved on November 15, 2005 from the Legal Week website http://www.legalweek.net/ViewItem.asp?id=26505 GlaxoSmithKline Consumer Healthcare. (2005). Revolutionizing the concept of e-HR. Retrieved on November 15, 2005 from http://66.102.7.104/search?q=cache:mzM194ox99UJ:www.wipro.in/itservices/enterprisesolutions/casestudies/gskfinal.pdf+HRIS+and+manpower+planning&hl=en Mercer Consulting. (2002). “The human resource revolution in global companies.” Retrieved on November 15, 2005 from the Mercer Consulting website http://www.merceric.com/summary.jhtml;jsessionid=FUXT5XL4KOMCKCTGOUFCIIQKMZ0QUI2C?idContent=1062825 North, J. (2005). “Taking charge of strategy.” Retrieved on November 15, 2005 from the Legal Week website http://www.legalweek.net/ViewItem.asp?id=26510 Nuthall, K. (2003). “UN creates watchdog to police environment regulations.” Retrieved on November 15, 2005 from The Lawyer.com website http://www.thelawyer.com/cgi-bin/item.cgi?id=99574&d=11&h=24&f=23 O’Connor, J. (2003). “Review of the year 2003: Clifford Chance ructions.” Retrieved on November 15, 2005 from The Lawyer.com website http://www.thelawyer.com/cgi-bin/item.cgi?id=107951&d=11&h=24&f=23 Perry, R. (2005). “E-conveyancing: promise or reality.” Retrieved on November 15, 2005 from the http://www.venables.co.uk/n0309econveyancing.htm Property Search Agency. Retrieved on November 15, 2005 from the PSA website http://www.psa.co.uk/ Southall, D. (2005). “Tomorrow’s world.” Retrieved on November 15, 2005 from the Legal Week website http://www.legalweek.net/ViewItem.asp?id=26499 SPI Technologies. (2003). “Ensuring a motivated and empowered workforce.” Unpublished manuscript. The Lawyer. (1996). “A boost for the UK economy.” Retrieved on November 15, 2005 from The Lawyer.com website http://www.thelawyer.com/cgi-bin/item.cgi?id=93273&d=11&h=24&f=23 Watts, A. (2005). “The age of reason.” Retrieved on November 15, 2005 from The Lawyer.com website http://www.thelawyer.com/cgi-bin/item.cgi?id=117654&d=122&h=24&f=46 Read More