Facilitating work-life balance can help businesses be more innovative, says Oxford research

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Creating new roles and career paths to allow for flexible working and better work-life balance isn’t just ‘accommodating’ to staff demands but can help make businesses more innovative, according to research from Saïd Business School, University of Oxford.

This division of labour is a win-win scenario for the professionals – Partners, Counsel and PSLs – and for the employing firm

‘While some firms find it challenging to change working practices in response to staff demands for flexibility, our research shows that taking a proactive, creative approach to work-life balance and career-pathing can benefit longer-term competitiveness,’ said Michael Smets, Associate Professor in Management and Organisation Studies at Oxford Saïd. ‘Businesses not only get to retain valuable talent but by organising it in new ways they can enhance their capacity to deliver the innovations that their customers seek. This is especially true in sectors where innovation is driven by people and knowledge, rather than technology infrastructures.’

In an Academy of Management Perspectives paper, Career Pathing and Innovation in Professional Service Firms by Namrata Malhotra (Imperial College London), Michael Smets and Tim Morris (Oxford Saïd), researchers explored this phenomenon in a group of organisations currently caught in a ‘perfect storm’ of pressures for both more innovation and more work-life balance: London’s elite law firms.
Their study looked at five firms that have adapted their traditional ‘up-or-out’ career path (where junior professionals compete with each other to move ‘up’ the ranks from Associate to Partner or ‘out’ to another employer) by introducing two new salaried roles: Counsel and Professional Support Lawyer (PSL).

This adaptation came as a response to growing resentment amongst younger lawyers, who have become increasingly sceptical of the ‘prize’ of partnership and unwilling to put in the gruelling hours necessary to win it. The new roles enable firms to permanently retain talent below the Partner rank and offer more work–life balance by offering more predictable working hours. However, as the study shows, they have also had the unanticipated positive consequence of increasing innovation capacity.
Innovation in knowledge-intensive firms organisations emerges from practice: from people with different types of knowledge and experience coming together to address new and different challenges presented by their clients. Under the traditional tournament model, however, this proved difficult because Partners were constantly making trade-offs between time spent mentoring Associates and sharing their specialised knowledge; standing back and looking at existing processes in different ways; building relationships with clients and winning new and interesting business; and meeting stringent targets for billable hours.

But the new roles of PSL and Counsel are able to mitigate these trade-offs and smooth the path to both operational and technical innovation. They help law firms both to generate new, cutting edge solutions and roll them out with greater efficiency and lower cost.

PSL

The research shows how PSLs are able to increase the time spent supervising and sharing knowledge with Associates engaged in routine work, an area in which there is typically a very high ratio of Associates to Partners and a tendency to emphasise throughput rather than enhancement. By drawing on and sharing their own experiential knowledge with Associates, PSLs are able to stimulate counterfactual thinking (asking ‘what if?’) and develop new ways of delivering these more transactional services to clients.

In addition, PSLs offer vital support to fee-earners by keeping them up-to-date on new legal developments and providing helpful legal interpretations, a valuable input to trigger legal innovations.

Counsel

Counsel, too, share some of the job of mentoring Associates, freeing Partners up to win new and interesting business which will stimulate innovation. They are a valuable reservoir of tacit knowledge, able to offer counterfactual thinking to help Associates tackle complex client problems and generate technical innovations.

In addition, they do fee-earning work commensurate with their experience and billing and are active in client relationship management. They liaise with existing clients and Partners to ensure that engagements are accurately defined and client expectations met. This is another area of learning they are able to share with Associates and thus share the load with Partners.

‘This division of labour is a win-win scenario for the professionals – Partners, Counsel and PSLs – and for the employing firm,’ said Tim Morris, Professor of Management Studies at Oxford Saïd. ‘The firm not only gets to retain talented and expensively-trained professionals, but also enhances its capacity for innovation; Partners are able to share some of their mentoring and other duties, freeing them up to build relationships with clients and win interesting business; and the Counsel and PSLs continue to do interesting and challenging work, maintain their status, and yet have time for family and other commitments.’

‘All businesses today face pressures to incorporate greater demands for diversity, gender balance, flexible working and innovative forms of team-working,’ said Namrata Malhotra, Associate Professor in Strategy at Imperial College London. ‘Our study offers an optimistic perspective in proposing that it is possible to find creative solutions which not only solve contemporary staffing challenges in the short term but have positive consequences for the longer term competitiveness of the firm. Frankly, if law firms can do it, then everyone can.’

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Tom Pilsworth
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