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Is it time to ditch annual reviews?
Blog //02-04-2024

Is it time to ditch annual reviews?

Annual performance reviews are a well-known facet of law firm life. Yet, as we see changing cultures both in terms of digitisation, the make-up of our offices, and the greater need to nurture and retain talent for law firms, many are now asking themselves whether it is time to redefine how we evaluate and coach their legal talent.

In this long-read article, we’ll explore the nuance of traditional and continuous feedback mechanisms and the impact they can have on your staff and your firm.

49% of law firms outlined attracting and retaining top talent as one of their three biggest business priorities. As such, it is now crucial for law firms to look at their processes and see what can be done to attract talent. Quite often older, more traditional methods are not what the new workers are looking for. Something noted by Martin Glover, the HR Director at Morton Fraser, when procuring Performance and Talent software as he joined five years ago, “it was as traditional as you could get. People who work in law firms love process, and they’d been doing performance management this way for a long time. I knew we could do better.”

 

Annual reviews: outdated and stale?

At first glance, the annual review seems a diligent, data-driven practice, structuring feedback within a formalised timeline. But beneath its veneer of routine lies a challenging reality that raises eyebrows for modern legal professionals. Why, you might ask, does the annual review merit such scrutiny?

In a factsheet published earlier this year, the CIPD highlighted several criticisms around traditional performance review practices, including that:

  • reviews are not frequent enough;
  • they focus too much on past performance;
  • they do not often consider future development;
  • feedback is from a single source, usually their line manager; and
  • the process is often too subjective and more bureaucratic than helpful in nature.

 

A year can feel like a lifetime, and the legal field is constantly changing. An event that took place on the first day of the year such as participating in a local charity event and networking could have such a profound influence like connecting the firm to one of its most significant future clients that an assessment at year's end might only mention in passing, rather than truly reflecting the full spectrum of the impact this event had on the law firm, limiting the worth of a once-a-year review.

The fallibility of human memory can also skew annual reviews, our memory is not perfect and can often be influenced by biases such as confirmation bias and the recency effect, for example a highly stressful case that leads to an oversight like missing a non-critical deadline right before an annual review could skew the reviewer’s opinion on an otherwise well performed year. Feedback given at the end of the year can sometimes be unreliable or even unfair, as it may be disproportionately influenced by recent events or pre-existing perceptions.

Annual reviews can also hinder meaningful career development. When feedback is limited to a once-a-year occurrence, it restricts the opportunity for ongoing, real-time career coaching. The traditional model of a junior lawyer receiving regular, targeted advice to refine their skills is increasingly becoming a thing of the past. By embracing a more continuous feedback approach, we can ensure that our professionals are always learning, growing, and adapting to the ever-changing landscape of the legal profession.

 

The case for continuous feedback

Amid the growing dissonance with annual appraisals, an alternative approach emerges, the continuous review. Adopted by industry innovators, this model proposes a steady stream of feedback, devoid of the constraints and subjective nature of annual discussions.

When questioned as to why fee earners left a firm the top answer at 36% was a lack of mentorship and career guidance, which was something picked up on by Martin Glover: “The first step was to set standard, but flexible, objectives for all of our fee earners. These could be revised if they did not line up with an individual’s workload and targets, so it was a positive way to get everyone started with using the system.”

A system of continuous reviews aligns perfectly with the dynamic and fast-moving nature of legal practices. It promotes adaptability, allowing for immediate adjustments in strategy and professional development paths. Employees benefit from a more detailed view of their performance, one that is backed by more data points and trends. This not just provides a more comprehensive picture but also supports more meaningful personal and professional growth.

Perhaps the most significant advantage of continuous feedback is its ability to turn a law firm into a hub of continuous learning. Every conversation about mentorship, every victory or challenge faced in a case, becomes a valuable lesson in the grand symphony of a legal career.

To the legal community, the call is for reflection and, importantly, action. What suits the fast-evolving, digitally infused environment that characterises the contemporary law practice? The onus is on us to answer this question, not just in discourse but in practical steps towards reimagining how we cultivate our legal talent.

Continuous feedback is not a cure all, nor is it the harbinger of doomsday for the annual review. It's a touchstone for reconsidering our priorities, our systems, and, by extension, our commitment to legal excellence. It is in this re-evaluation that we not only enhance the professional lifespan of our legal professionals but also ensure the legal dynamo remains not just an effective machine but a learning, growing, evolving organism.

Continuous feedback not only benefits the staff, through doing well and getting recognised, it also helps law firms get a better understanding of the value their staff brings to them, allowing you to see the contribution regularly as it adapts.

One such quote from Morton Fraser Solicitors when looking at how continuous feedback has benefitted them: “For the majority of staff, who turn up and do a good job every day, it lets us consider how we can help them develop and progress with us. It’s great to really see the value that your workforce is contributing to your business.”

 

Overcoming change with a blended approach?

While the merits are plain to see, transitioning from annual to continuous feedback is not devoid of change. The question then becomes, how do we pragmatically implement a structure that complements the traditions of law firms while nurturing innovation and growth?

Shifting to a continuous feedback model involves more than just implementing new procedures; it's about fostering a culture that values open, honest communication. This new culture encourages safe and supportive spaces for both giving and receiving feedback, integrating this practice into the very heart of the firm.

While technological progress has provided us with efficient tools for giving and receiving feedback, it's the human touch that gives these systems their true value. The ideal scenario is one where technology and empathy coexist harmoniously.

The success of any new initiative hinges on the support from the top tiers of the organisation. It's equally important to provide comprehensive training to supervisors and staff, equipping them with the skills needed to effectively carry out continuous feedback without resorting to micromanagement.

There is also a case to be made whereby both systems could work together for the greatest good and buy-in with annual feedback standing as a historical reference point while continuous feedback provides checkpoints to aid staff development and to guide them towards hitting their targets.

Proponents argue that each serves a distinct function, and a blended approach might yield the best results. Annual reviews can capture significant milestones and tonal shifts in an employee's performance, while continuous feedback provides the ongoing, specific feedback that promotes personal and professional development.

Over a third of lawyers say they feel ‘highly stressed’ at work, listing their stress levels between 8 and 10 on a scale out of 10. Creating an environment where conversations happen more frequently provides the insights necessary to see which employees are struggling and need more assistance, and law firms should always be looking to assist their teams in any way they can. A point Morton Fraser raised when changing the way they review: “Having much better insight into the day-to-day performance of employees has been hugely beneficial. It helps us see who is doing really well, and those who are struggling and may need support.”

 

Pioneering the path forward

For those willing to pioneer, the path forward is laden with potential. The call to action is twofold: experiment and adjust. Begin with small-scale implementations of continuous feedback. Test its reception, its efficiency, then be prepared to adjust and adapt to create an environment of fair reviews and career developments.

The debate over annual versus continuous review systems in law firms heralds more than just a conversation about employee evaluation. It's a meditation on the essence of progressive work culture, an ode to the malleability and adaptability that define the most successful organisations of our age. The time has come to recalibrate, to redefine, and to reimagine. For in doing so, we do not simply pivot an aspect of HR; we redefine the process of talent cultivation in the legal world. And in the end, the verdict remains open, awaiting our collective wisdom and courage to script the next chapter of legal HR history.

 

Click here to learn more about performance & talent management and how we can help.

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