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Company culture

Legal business model drives engagement, motivation – and results

Published on by Tom Bangay

A bonfire of the conflicts is a good enough reason for a large law partner to start up a litigation boutique, but it was the least of what Graham Huntley had in mind when he jumped ship from Hogan Lovells to found London-based Signature Litigation LLP. Together with CEO Kevin Munslow, a qualified accountant, he set about creating a new kind of firm, with structural, cultural and financial factors that would set it apart.

The key axiom, from which so much of Signature’s culture derives, is giving everyone – not just partners and not just fee earners – a real stake in the firm. To that end, they explored several options for a nontraditional structure. An alternative business structure (ABS) was even considered but ultimately they were able to achieve their aims within an LLP (and with the Solicitors Regulation Authority (SRA)’s blessing) by implementing a constitution, covering key matters like voting rights and the profit share, written by the members themselves.

That constitution empowers every member to elect the firm’s leader, “and I mean every member,” Huntley explains, “the people typing, cleaning, on the phones. Families don’t have grades of people.” Constitutional authority over financial matters rests with Munslow, leaving Huntley to focus on lawyering. “We have a firm where lawyers are lawyers, and we employ great people to deal with everything else,” Munslow says.

The management of what might be called “back-office” functions is handled by managed services provider Kindleworth, who takes care of HR, risk and compliance, IT and the other concerns that stop lawyers from being lawyers. Their people are available face to face, but they clear partner and associate workloads of time-consuming non legal work. Munslow describes it as “a flexible resource that can build relatively quickly and manage issues that law firms suffer from, with churn in that area,” as any legal recruiter knows all too well.

The most eye-catching element of Signature’s innovative structure is its bonus scheme, which includes not just partners but every member of staff, top to bottom, in the profit share. “Traditional law firm structure is designed to create as much profit as possible each year and then drain it out. It retains all the upside for the partners. Here we retain the upside for all employees: If the firm does well, then everyone should benefit. When things go hard in a family, you don’t ditch your second cousin,” Huntley explains. “We don’t have partners making discretionary decisions about people’s end-of-year compensation.”

The firm’s commitment to making every employee feel like a key part of the team is obvious at all levels. Office manager Helen Sadler made the jump with Huntley and notices “a huge difference between here and previous firms. It directly promotes teamwork when personal assistants (PAs) and receptionists get the same percentage as the lawyers – everyone’s treated the same.”

Is it a factor in attracting the best young talent? Big London firms tend to be generous paymasters, with exceptional salaries available at the elite US firms in the City. Rory Spillman, an associate of four years Post-Qualified Experience (PQE) specialising in financial markets and multi party international disputes, praised the firm-wide effect that the profit share has on motivation: “It motivates everyone from office junior up to partner. It means that everyone is involved in decision making, and at our regular monthly and quarterly meetings, issues are put to discussion and ideas are welcomed and listened to.”

However, the firm’s young lawyers were just as keen to emphasise its culture and approach to talent development. The leaner partner/associate ratio, together with the constant emphasis on freeing up lawyers to be lawyers, means that exposure to high-end work with partners is dramatically higher than at other City firms. “PQE requirements are a frustration at larger firms,” says Munslow. “People are held back from that quality work due to their defined roles. Here we let people go as far as they’re comfortable going, and with smaller teams, supervision is easier.”

This attitude is hugely attractive to young lawyers looking to kick-start their careers. Commercial litigator Jessica Thomas was offered a job by the top-40 City firm at which she trained, but when she heard from a former colleague about the high-quality work he’d seen in six months at Signature, it encouraged her to respond to initial overtures and find out more. “Going through Signature’s recruitment process made me realise they were offering what I was looking for – having real input in the firm and its growth, and being part of that conversation.” After joining the firm, Thomas jumped in with a professional negligence claim brought by their client against a French law firm, allowing her to use her language skills every day – an experience just not on offer to Newly Qualifieds (NQs) at most firms. Spillman agrees: “The type of work and the level of responsibility drew me to Signature, and when the offer came it was quite an easy decision to make.”

That sink-or-swim culture is not for everyone, which is why the recruitment process is particularly rigorous. Expanding the family is a careful and lengthy process: Thomas navigated through meetings with an HR manager, two partners, a written test, two other partners – “it felt like a thorough, staged process to make sure you fitted in with the culture.” Frances Haughian at Kindleworth manages Signature’s HR function and is conscious that “making the decision to jump from a big City firm to a niche litigation boutique is a big one. We give people the opportunity to do their due diligence and meet as many people as they can – they can select employees at random and chat informally with them.” Prospective employees can discover the firm’s culture for themselves.

Signature is happy to fly in the face of the centuries-old partner oligarchy with its profit share and constitutional framework, empowering all members of the firm from the bottom to the top. “If you create an environment where one group of people don’t see how they can impact positively on the firm and don’t see recognition for their efforts, it can lead to a lack of engagement and motivation. We want everyone to see the positive impact they can make, no matter what their role,” says Haughian. Whereas, Huntley says, “if you offer them a community, a family, an ability to influence and affect their future, then you open yourselves up to a much, much wider pool of potential talent.” In its short life span Signature has seen strong growth, a rich seam of high-quality work, impressive financials and, crucially, retention of great talent. Who needs a partner oligarchy anyway?


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