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TLOMA Today

May, 2021
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May, 2021 | Article

President Message

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Durdin Bernice 9nov19
Author Bernice Durdin
Look up! It’s Optimism!

“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” – Winston Churchill

Look up! It’s Optimism!

What is Optimism?

Hopefulness and confidence about the future or the successful outcome of an event.

Optimism is an attitude reflecting a belief or hope that the outcome of some specific endeavor, or outcomes in general, will be positive, favorable and desirable. Glass half full, Mr/s Bright Side!

Why is it important?

Opens us up to new ideas, new experiences and new possibilities. It frees us to consider new options and change our professional and personal lives for the better.  Optimism helps us look to the future and create expansive, evolving realities.

How to stay optimistic during COVID

As the Covid-19 pandemic continues, many are struggling to find a silver lining in the midst of a third lockdown. The worsening headlines of case counts and vaccine distribution are distressing, especially when all an individual can do is practice social distance and mask procedures.

No one is “ok” with our current state, and that in itself is Ok. It’s OK to feel pessimistic, and it’s OK to talk with friends, colleagues and family who feel the same way. In doing so, we can share the following tips for remaining buoyant and optimistic:

Ten Tips for Staying Optimistic[i]

1.  Make up mantras. You are not alone. We’re all in this together. These aren’t just snappy sayings for t-shirts, they’re positive affirmations that can be a powerful tool in helping to shape your outlook. Pick one that resonates with you and repeat it often.

2    Focus on successes. Remembering challenges you have overcome in the past can help inspire you to face future roadblocks. Tough times can become learning opportunities.

3.   Challenge your negative thoughts. We can’t always choose what happens to us, but we can choose the way we respond to it. Reframe the situation and see what possible positive outcomes there are. For example, being “stuck at home with nothing to do” can be reframed as being “safe at home with an opportunity to connect with my family.”

4.   Cultivate an attitude of gratitude. Start or end your day with a gratitude practice. Write down three things you are grateful for each day, or partner with a loved one and share them out loud. Gratitude trains your brain to see the positive.

5.   Stay in the present moment. It’s easy to get caught in a spiral of anxious thoughts about the future. We all want to know when this will end. If you find yourself stuck in this negative pattern, try this simple exercise to bring yourself back to the present moment.

6.   Let it go. Similarly, staying in the present moment can keep you from unnecessarily ruminating on the past. Traumatic events and other circumstances require appropriate support, time and attention to heal, but give yourself grace for minor mistakes or imperfect plans.

7.   Connect with positive people. Social connection contributes to happiness and is strongly correlated with optimism. Seek out the company of people that make you feel good and fuel your positive energy. Likewise, limit interactions with those who leave you feeling drained or pessimistic.

8.   Pay it forward. Performing acts of random kindness for others is a great way to boost your happiness. In addition, those you help and even those who simply witness your kind gestures will also benefit. Learn more about using kindness as a coping skill here.

9.   Do it for your family. Optimism can be a learned behavior and is a teachable skill. Give your family the many benefits of optimism by setting an example for them to follow.

10. Practice makes progress. Of course, all new habits take time and continuous practice before they become automatic. Make the choice to be more optimistic each day and enjoy the rewards of your improved outlook.

Here’s your upcoming May events; be sure to register:

May 13, 2021 - TLOMA Facilities SIG Event - Working from Home: Taking Care of Your Most Valuable Asset in the Next Normal

May 17, 18, 19, 2021TLOMA Professional Development Event - Driving Professional Success and Well-Being

May 27, 2021 - TLOMA Technology SIG Event - How to Protect Your Firm From Cyber Attacks

Keep well and stay safe,

Bernice­­­­­­­­­­­­­­­­­



[i] Sourced from KVC Health Systems.

Bernice Durdin is the Manager, Human Resources Manager at Lerners LLP.  Prior to her pervious role, she was the Human Resources Manager at Robins Appleby LLP. Prior to that she was the Human Resources Manager at Baker & McKenzie LLP.  Bernice has held various management positions over 22 years' experience working in the legal industry.

Bernice joined Oatley, Purser in 1998 as a Receptionist while completing her Human Resources diploma at Georgian College. In 2002, Oatley, Purser separated and formed the new firm of Purser, Dooley LLP where Bernice was promoted to role of Office Manager. Over the next few years, two more mergers followed with local Firms in the Barrie area. In 2012, Barriston LLP was formed and Bernice was promoted to Human Resources Manager. In this role, she was responsible for managing 6 offices between Barrie and Haliburton.

Bernice has been actively involved in TLOMA since 2002. During that time Bernice has attended the annual conferences and attends as many SIG monthly meetings as possible. In 2015, Bernice was previously on the Nominating Committee, in 2017 she was on the Compensation Committee and was the 2017/2018 HR SIG Leader.  Bernice was the 2020 Vice President for TLOMA.

In her spare time Bernice enjoys playing golf, working out and spending time with her family and friends.

May, 2021 | Article

Coping with the Pandemic by Developing a Growth Mindset

May 2021 - Coping with the Pandemic
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Mousseau, PhD, Dr. Mike
Ruiters, Joshua
Authors Dr. Mike Mousseau, PhD and Joshua Ruiters

It seems as though I am writing this article on day 3000 of the pandemic, and it’s hard to believe we have only been going through this for just over a year. I think a lot of people would agree with the sentiment that this year has simultaneously felt like the longest and shortest year of their lives. We have all experienced a lot of obstacles this past year, and it only seems to be getting more challenging.

Like most of you, I live in Ontario, and I’ve noticed the severity of our third wave weighing on me.

It seems like just weeks ago we were optimistic for spring, for vaccines, and seeing the light at the end of the tunnel. Only to have that quickly turn to ICUs at full capacity, children home from school, and another lockdown. Now, I am not saying we still don’t have reasons to be optimistic. Spring has arrived, Ontario set a record for vaccinations yesterday, and every day we inch closer to ending this pandemic. With all that having been said though…. It’s been exhausting!

At Gallagher, our Gallagher Better Works[1] approach to Organizational Wellbeing acknowledges that people, organizations and COVID-19 are complex. The lines between work and home are increasingly blurred, stress levels are high, and organizational and employee financial pressure is high. A holistic approach to wellbeing helps to create a resilient workforce. While everyone responds differently to stress, resilience is something that can be learned or cultivated over time with discipline and guidance.

Leading this effort at Gallagher is Dr. Mike Mousseau. I spoke with Dr. Mike about why these lockdowns have been so hard for people, some of the things we can do to cope with all of the changes in our lives, and some things we can do to re-energize! Dr. Mike is a Neuroscientist and our goal is to cover these topics from his perspective…. So as I am sure everyone has heard a million “tips” for a happier pandemic, but Dr Mike will explain the Neuroscience behind the most important things for us to consider.

Hello Dr. Mike Can you quickly explain who you are and what you do?

I’m Dr. Mike Mousseau and I lead Gallagher’s Wellbeing & Engagement[2] practice here in Canada. I have a PhD in neuroscience and aim to bring a unique and scientific perspective to supporting every organizations greatest asset, their people.

Change is hard for people….. Why is that? It seems like this recent third wave has really taken its toll on everyone, why was this one harder than the last?

Even when faced with a life-threatening situation, people tend to resist change despite knowing the repercussions. Think about the concept of heart disease for instance, patients who had undergone bypass surgery are often told that if they do not change their habit in life they would perhaps have to have the surgery again - it turns out only 9% of patients modified their behavior.

Changing a habit or embedding a new behaviour takes effort and focused attention. If we’re under pressure, tired or distracted our brain can’t keep us focused and we relapse to earlier behaviours and habits.

As humans, we look for ways to create certainty in all situations- we are hyper-vigilant to detect and act on changes in our environment—and we like to get back to what is familiar as soon as possible. Though the pandemic’s ebbs and flows are becoming inherently more familiar, they are threatening our stability.

As such, when a person’s social environment changes, it challenges their sense of stability or more specifically, our brain’s. If the brain decides the change is, in fact, threatening, then it will resist or avoid the change as much as possible—“fight or flight” mode as it’s often called will kick in. This is our brain’s innate defense to change. Our fear centre of the brain starts firing and we revert back to certainties, healthy or not.

What are some things we can do to counter those things you described, how can we cope during the recent third wave?

Changing a habit or embedding a new behaviour takes effort and focused attention. This can feel physiologically uncomfortable and quite literally painful to over-ride habits.

The science of neuroplasticity is helping scientists explain how to train ourselves to be more productive, happy or in this case willing to cope with the changing demands of our lives. In fact, your brain is a dynamic environment and constantly is rewiring and forming new connections to assist with these processes.

So, how do we bypass old habits and train our brains? How do we go about creating new neural pathways or new thought patterns that help us to grow as individuals? It turns out, we can learn a lot from the field of neuroscience to train our conscious mind to recognizing our old thought habits and patterns and how to create new ones - but it will take a concerted effort on our part.

Think of your thought pattern in context of an analogy of driving through snow or a field. If I drive my 4WD truck down the same track every day that track will get deeper and more open and be easy to drive down while the others will have too much snow to get through. Our neurons work in the same way. The more we drive down one particular path the easier it becomes – whether that path is effective or ineffective.

This represents a thought, or a belief you’ve held for a long period of time. And let’s face it, not all of our thoughts and beliefs are creating the life we desire.

It may take effort initially to choose to drive down a new path – it is deep with snow, and takes more concentration, especially when we are under pressure. But, with a bit of effort, we create a new path that is easy to navigate. Our neurons fire together quicker and with time they become embedded as habits. Once this happens less effort is required to maintain focus and attention and we can regulate our emotions and behave, decide and perform more effectively.

This is how we grow our minds; by learning how to think differently, create new habits, develop greater resilience to stress, and generate more positive outcomes in our lives.

What can we do to re-engage and re-energize as we come into the summer? 

Much of this comes down to the mindset we adopt for ourselves and how that affects the way we lead our lives. That is what Stanford Psychology Professor Carol Dweck[3] has shown through research since the 1970s. What she discovered is the power of two different mindsets — she coined them the “growth mindset” and the “fixed mindset”.

A growth mindset means that you believe your intelligence and talents can be developed over time. A fixed mindset means that you believe intelligence is fixed—so if you’re not good at something, you might believe you’ll never be good at it.

Fundamentally, it’s a battle between “How will I be judged?” (fixed) and “How can I improve?” (growth).

However, it is also important to note that none of this is binary and none of us is led by only one mindset. We all are mixes of the two, depending on the situation we are in, the people we interact with or the challenges we are about to confront.

This mission is about developing a growth mindset. But, having a growth mindset is not an “easy button” solution to any problem and it will not automatically cause this pandemic to end. What it will do is make it easier and more enjoyable to work toward your goals and give you the confidence and resilience you need, even through these most troubling times, to endure and stay positive.

Here are three general approaches to growth mindset we can all start today:

1.  Cultivate your self awareness: Become aware of your talents, strengths and weaknesses; gather feedback from those you know best and create a holistic view of yourself.

2.  Embrace challenges: Know that the journey to accomplishing anything worthwhile will have many challenges – prepare yourself for facing these and even failing sometimes. But be tenacious and get right back up if you fall.

3.  Inspire and be inspired by others: Envy of others who succeed is tempting, but will not help your journey. Instead, commit to being an inspiration to others and use the success to others to inspire you as well.

As the National Wellbeing and Engagement Consultant, Dr. Mike partners with Gallagher teams and clients across Canada to design and integrate multidimensional wellbeing initiatives and strategies.  With his PhD in neuroscience and background in research, Dr. Mike is passionate about improving organizational wellbeing by providing a unique science based approach to managing risk. By taking the time to understand organizational culture, goals, and mission he ensures that wellbeing strategies are thoughtfully aligned to support business objectives.

Dr. Mike received his PhD in Neuroscience from the University of Calgary Hotchkiss Brain Institute where he became a published author focusing his doctoral research on repurposing pharmaceutical drugs and finding effective treatments for patients suffering from chronic pain, opioid addiction and mental health diseases. His background and expertise in neuroscience and mental health gives Gallagher a unique set of skills that help further differentiate us in the industry

For the last ten years Joshua Ruiters has been consulting businesses on how to actively engage and retain employees. Josh passionately believes that employees are the most important part of any organization.  His primary focus is working with organizations to create a culture where employees feel appreciated and valued. Josh joined recently joined Gallagher as a Group Benefits Specialist and one of his first initiatives was to begin working with TLOMA.

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May, 2021 | Article

Understanding Where The Risk Lies When Law Firms Move To The Cloud

May 2021 - Cloud
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Zver, Peter
Author Peter Zver

Even before Covid-19 happened – and now very much more since it has – Canadian law firms were looking to move their data and systems into the cloud. This is a good decision. But in the process, what’s puzzling me is that firms are only asking one question: “Where will my data be stored?”

Now, don’t get me wrong. This is a reasonable enquiry to make. Clients may want their data to be in Canada and the firm may feel more comfortable, or find it more practical, to have its data resident in the same jurisdiction. And of course, as we all know, if data is stored in the USA, under the terms of the US Patriot Act, the US Government is entitled to access it, should it wish to do so.

So, yes, it’s absolutely fine to check, when you look to move into the cloud, where your firm’s data will be held. But my issue is simply this: it’s an important question to ask, but – and I cannot emphasize this strongly enough – it’s not the ONLY question to ask. Because what actually matters is whether your clients’ data is safe.  

The big mistake I’m seeing Canadian law firms make at the moment is that when moving to the cloud they diligently check where their data will be held. And once they’re told it will be in Canada, they accept that as a full and final answer – and they don’t ask anything else!

Where risk lies

So what I see happening at the moment is that there’s a particular focus on the US Patriot Act. In fact it’s almost a fixation. Firms are determined to keep their data away from the prying eyes of Uncle Sam. And I get that. However, let’s conduct a reality check. Ask yourself just how likely it is that the CIA actually wants to know what a family law firm in Ontario is doing? I’m not saying it couldn’t ever happen. I’m just saying that the probability is extremely low.

Meanwhile, north of the border, Statistics Canada conducts an annual Canadian Survey of Cyber Security and Cybercrime (CSCSC). In 2017, just over one-fifth (21%) of Canadian businesses reported that their operations were affected by a cyber security incident, despite the fact that they were spending a reported $14 billion to prevent, detect and recover from cyber security incidents. [1]

Worse still, in 2019 a CIRA (Canadian Internet Registration Authority) cybersecurity survey found that 71 per cent of organizations reported at least one cyber-attack that affected the organization in some way. They experienced impacts on time and resources, incurred out of pocket expenses, and even paid ransoms.[2]

Even closer to home, the Canadian Bar Association found that 33 per cent of Canadian firms with between 10 and 49 attorneys have reported data related security breaches in the past 12 months. It suggests that Canadian law firms have a one in three chance of sustaining a data security breach, versus an infinitesimal chance that through some freakish collision of circumstances, the government of the United States of America may suddenly want to access their data. It’s about really understanding the odds and connecting it to managing the risk.

My point is that clearly the balance of risk lies with data security; not with data residency (where it’s physically stored) or with data sovereignty (the jurisdiction within which it’s stored). Data security is the clear and present danger. So firms have to stop fixating on where their data will be held and instead focus on the area where the actual threat exists.

And it’s not just me that thinks so. In fact the Canadian Bar Association doesn’t require data to be held in Canada. But it does expect client data to be handled safely and its confidentiality assured. Moreover, the Law Society of Ontario states in its Rules of Professional Conduct that: “A lawyer at all times shall hold in strict confidence all information concerning the business and affairs of the client acquired in the course of the professional relationship....”[3]

Since there is clear evidence that significant potential exists for the firm’s data to be hacked by cybercriminals or otherwise misappropriated, a failure to ask about data security provision is in effect a failure to safeguard the integrity of your clients’ information assets. In other words, a breach of your Rules of Professional Conduct. So, yes, one question is: “Where will my data be stored?” But the next question has to be: “How are you going to ensure the safety of my data?”

Asking for credentials

What should firms be looking out for? For one thing, we know that a high proportion of data breaches are as a result of human error, or malicious action. So, whoever is looking after your data, you need to ask what employee background checks they’re running. Firms should ask who will have access to their data; how it’s encrypted; and importantly, what provisions are in place to enable the firm to recover its data in the event that the cloud provider goes out of business. 

Firms should also ask for evidence around the provider’s adoption of recognized ISMS (information security management system) policies and procedures. ISO/IEC 27001 and 27018 are two well-recognized and highly-regarded ISMS standards to look out for. Going one step further, firms can go as far as asking the cloud supplier evidence of third-party audit (SOC reports) of the provider’s ISMS policies and procedures.

In summary, when moving your data out of your premises and into the facility of a cloud provider, a firm must check the cloud provider’s entire ISMS which encompasses their people and their processes and technology specifically as it relates to security and encryption, and ensure that it’s working with a certified, regulated organization. To fail to do so is arguably in breach of your Rules of Professional Conduct.

Do not assume that because your data is being held in Canada that it is safe just because it’s in Canada! You are exposing your firm to a considerable risk if you fail to ensure that the cloud provider you choose to work with isn’t providing adequate data security provision. Understand that the real risk lies in data security, not data residency – and address that risk.

To explore the role technology plays in shaping the law firm of the future then you can watch our recent webinar on the topic by clicking here.

Or, if you would like to learn more about document management, specifically how a document management solution can improve your firm’s security, data protection, collaboration, knowledge management, project management in addition to productivity and your relationship with clients, then view our recent webinar, by clicking here



[1] https://www150.statcan.gc.ca/n1/daily-quotidien/181015/dq181015a-eng.htm

[2] https://www.cira.ca/resources/cybersecurity/report/2019-cira-cybersecurity-survey#key

[3] https://lso.ca/about-lso/legislation-rules/rules-of-professional-conduct/chapter-3#ch3_sec3-confidentiality

Peter Zver was appointed Director, Tikit - Advanced Americas in July, 2013 and has been serving the legal market for over three decades. His background is in Information Systems and Finance and was the founder of Zver & Associates and PensEra Knowledge Technologies, both of which specialized in addressing the business of law via the delivery of technology products and services.

His work has mainly focused on the business of law and fintech, more specifically  practice management,  timekeeping and document management systems  and the impact these systems have on improving profitability and client relationships for law firms. Peter is an active contributor to ILTA and other legal industry media organizations.
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May, 2021 | Article

Firming Up Your Firm’s Visibility - with Direct Mail Marketing

Firming Up Your Firm’s Visibility - with Direct Mail Marketing
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carole_wright_bio
Author Carole Wright

Despite the irrefutable effectiveness of word-of-mouth advertising, direct mail marketing remains an excellent way to engage and entice potential clients. As we continue to manoeuvre through this difficult Covid-19 crisis, businesses are struggling to keep profits up, while juggling remote and work-from-home challenges – with the added stressors of keeping staff and clients safe.

A well-planned, direct mail marketing campaign makes a strong impact and gets your firm top of mind. People are home now more than ever; and are eager to check (and open) their mail or browse through flyers. Let’s take a fresh, new look at direct mail as an effective opportunity to reach your audience and get those calls coming in.

The evidence

Direct mail is a proactive way to reach your target audience; you don’t need to wait around for someone to find you online or wait for a referral. With law firms specifically, we know the odds are good that most people will require the service of a lawyer at some point in their life, particularly for real estate transactions, business law, wills and estates, or family law. With this in mind, why not get your brand out front and centre and right into your clients’ hands?

With mail, we pick it up, we look at it, and we read or glance over it. It is a real item that’s we hold, which means you are marketing to a captive audience. On average, a piece of direct mail will stay within a home or office for about two weeks. That’s a lot of time to let your firm’s information – even if it’s just your logo or tag line – sink in.

The personal and visual components of a brochure, letter, coupon or postcard have a stronger impact on people than a digital ad. It’s tangible. It’s visually appealing or catchy. It’s not on a screen. Digital marketing is everywhere, but with direct mail, diversification is the secret weapon; it is an affordable, effective method to get your future clients’ attention.

An action plan that gets results

Some businesses get better results from mail campaigns than others and response rates can vary widely. There are several factors at play that influence the success of a direct mail marketing campaign. We’ve outlined 10 essential considerations to improve your marketing results and maximize your firm’s ROI:

  • Use your database of existing clients. If you don’t have a database, use data to understand your target audience.  
  • Be clear about the legal problems you can help address.
  • Focus on your local audience – people are more loyal to local.
  • Make your mail campaign authentic and personalized; it increases your sense of community.
  • Let your audience know if you are a new firm – or simply new to their town.
  • If you’ve been around a while, be sure to share your many years of experience.
  • Offer a promotion, a free 15-minute consultation or other deal to catch their attention.
  • Keep the language simple, positive and supportive. No legal jargon or wordy messaging.
  • Consider using QR codes – helps people access your website or social media quickly and adds another level of engagement.
  • Ensure it is professionally designed, visually appealing and of course, typo-free.

The key to a good campaign is that you speak to people’s pain points. What are the legal issues that your firm can fix? Why is your firm better than the competition? How do you help the community resolve (or avoid) their legal issues?

Closing arguments

Direct mail continues to be a proven, effective marketing opportunity for many types of businesses, including law firms. Communities are seeking reassurance, convenience and peace of mind more than ever. Many legal issues have been put on hold since the pandemic, and with more re-opening taking place in the coming months, you need to get the word out about your firm.  Make those important connections before your competitors do. Highlight your firm’s skills, successes and assets to create messaging that resonates with potential clients and makes your brand more recognizable.

If you are thinking of creating a mailer, connect with the team at IO Print (part of the ION Group of Companies). Whether you are looking for design and print supports for a flyer, brochure or rack card, or if you need full direct mail marketing services, we are here to help.

Carole Wright is the Community Manager at Element 6 (part of the ION Group of Companies); a digital marketing and user experience agency in Barrie, Ontario. She’s a content writer, blog boss and marketing coordinator. She's also a grammar nerd. You can reach Carole by emailing carole@element6.io.

May, 2021 | Article

“Do Law Firms Test Partner Compensation for Biases?”

compensation
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Prescott, Blane
Author Blane Prescott

Law firms, like most organizations, are increasingly aware of the potential for unintended bias issues in their compensation decisions.  And almost everyone understands that eliminating bias is important for legal, social, and moral reasons.  But too often people overlook the fact that eliminating biases is one of the more viable means for improving profits and teamwork.  Like so many issues the first step is in identifying the problem.  Law firms face unique compensation issues, because partner performance tends to be more multifaceted than roles in other businesses that are defined by singular functions.  In the article below we address some of the common questions we receive from law firm leaders on bias testing of partner compensation.

Question:  Do any law firms regularly test their partner compensation results for biases?

While rigorous, methodical testing is not commonplace most firms still worry about the issue and take some efforts to ensure consistency and fairness.  But there are an increasing number of large firms that now regularly test partner compensation recommendations before they are finalized to see if the results reveal any biases or contradict the data in ways that cannot be rationally explained.  We first started bias testing thirty years ago with a large international firm because they wanted to make sure they were not discriminating against a growing number of female and minority partners, to ensure they weren’t penalizing partners in branch offices, and conversely, to ensure they weren’t inadvertently over-rewarding some partners.  Their early efforts at bias testing revealed inadvertent discrepancies in how compensation was awarded, and in differing assumptions about the performance and contribution of partners that correlated to gender.  While bias testing can initially seem intimidating and fraught with potential liability, testing efforts have steadily gained momentum as more and more firms want to take real steps to encourage better teamwork, inclusion, integration, diversity, and profits.

Question:  What is a typical approach for bias testing of compensation data?

Approaches vary by firm but generally fall into one of three categories:

  • The most common and informal approach is to have other leaders who do not serve on the compensation committee review the results before they get announced. Those other leaders raise concerns or questions to the committee, and then depending on the firm, changes may be proposed, debated, and resolved. While a common approach it is not necessarily methodical or objective: Results are rarely analyzed with accepted bias testing techniques and are often debated by leaders who may be advocating for changes more reflective of their own practice or office interests, or even their own personal biases. This is not to say it is a bad practice, but it does not qualify as legitimate bias testing.

  • Perhaps the second most common approach is when a compensation committee itself looks at the preliminary results and runs some type of analysis. For example, they may run correlation and data sensitivity tests and then discuss the results and whether changes are warranted. This is better than situations where firms do no testing, but it has the obvious risk of having those who made the original decisions check and interpret their own work. As anyone who has sat on a compensation committee in a large firm can attest, after setting compensation for hundreds or even a thousand partners it can become difficult to remember the justification for any one individual. An added complication is that in some firms there is significant turnover among the compensation committee members from year-to-year, so the rigor and statistical approach may vary as well.

  • A third approach is when a compensation committee passes the preliminary recommendations to a separate internal or external group whose role is to test for biases. That group then runs a series of tests, assesses the results, and works with the compensation committee to flesh out issues and suggest changes. Firms that use this approach typically provide the compensation recommendations without names or other identifying information, and the resulting analysis is only then checked against gender/race/other information. If the testing group is internal to the firm, it tends to be more permanent, is trained in bias testing techniques and issues, and often reports to the firm’s leadership and General Counsel.

Question:  What are some of the common challenges with compensation testing?

One of the most common issues is that partners who are new to setting or testing compensation assume compensation should be quickly and easily calculated by a mathematical formula, and anything that varies from that formula is indicative of a problem.  But most quickly realize there can be justifiable, significant differences in compensation between two partners who on the surface have similar statistics yet still make dramatically different contributions.  The hard question is, are those differences justifiable for appropriate reasons or do they reveal some bias?

Second, despite popular perception it is not always possible to measure contributions or results objectively.  A firm can easily measure effort (“how many hours did you spend on this task?”), but effort does not always correlate to results.  And this is an important philosophical divergence point among law firms:  Some firms pay for effort, while others pay for results.  Neither philosophy is right or wrong, but merely a reflection of a firm’s values.  It is true that successful firms tend to reward results and just expect effort from all partners as the price of admission for becoming a partner.  There is nothing wrong with paying for effort but firms that do so tend to experience more challenges in compensation and face greater requirements for clear communication and guidelines.  For example, firms that pay for effort face some common, but critical, questions:

  • How long does the firm pay for effort without results?

  • Is the firm consistent among all partners about paying for efforts?

  • Are efforts as valuable as results? If not, what is the marginal difference?

  • Are all efforts worthy of compensation? If not, who decides which efforts have value and which do not? Does the firm make those clear to everyone?

Third, assessing results routinely gets easily confused with and inflated by measuring efforts, especially when partners are explaining their own performance.

Fourth, one of the most widespread misconceptions is that all data is objective.  It is easy assume that because a number appears in a spreadsheet it is a fact.  The reality is data can be either objective or subjective

  • Objective data is measurable and produces the same result each time it is measured.

  • Subjective data is an allocation of objective data to someone or some activity, based on judgement. It is that allocation process that makes it subjective.

If subjective data is not allocated the same way each time or at least within statistically acceptable norms its reliability and integrity is eroded.  And some of the most critical data used to judge results and thereby compensation in law firms is appropriately subjective data. 

One common example of subjective data is origination (which goes by many different names depending on the firm) – essentially an assertion as to who either creates and/or maintains a client relationship.  Billings and/or collections, which are both objective data, are allocated to individuals to credit them for the results thereby making it subjective data.  But what if the firm does not allocate that data fairly, or consistently?  Subjective data is legitimate and far more common across all industries than most people realize.  Its weakness is that that it can be manipulated.

But there are successful methods to make subjective data more consistent and reliable.  The three common criteria are:

  • Does everyone in the organization allocate subjective data in the same way?  If allocation varies by individual, then the data has no integrity and won’t produce consistent or comparable results.

  • Does everyone use the same definition of the data (because the organization has clearly defined it and told everyone what the data should and should not be measuring), or can each partner choose their own definition which then impacts how they allocate it?

  • If your answers to questions 1 and 2 are “it varies,” then the third criterion becomes all-important: Does the firm have a process for examining and adjusting subjective data in the compensation process so that it conforms to consistent firm standards?  This is a common and successful approach. But some firms avoid defining their data, avoid interpreting or adjusting it, and take everything at face value even when they know partners apply differing standards for creating subjective data. In these cases, the subjective data has no integrity which tends to create significant problems in compensation.

Question:  What are some of the surprising results in conducting bias testing? 

  • Bias testing of compensation results does not reveal all discrimination issues – it is just one tool for assessing one type of issue. It reveals whether a firm rewards compensation consistently based on the data and other information available. If a firm has discrimination issues regarding allocating opportunities fairly, in training or development, in promotions, or in hiring, those will not be revealed by compensation testing. Fortunately, those problems are easier to diagnose and address through other means.

  • Biases are an ever-present issue: Every person/every organization has them to some extent and will always have them in some form. One of the important lessons learned is to be open and disciplined in looking at compensation results, and to be willing to constantly identify, address and improve as old issues are resolved and new issues emerge.

  • Perhaps the most gratifying surprise in our experience is that even in firms where bias testing has revealed problems, most compensation committees are surprisingly open and interested in learning about the results and addressing issues. We find that most compensation committees are legitimately interested in treating partners fairly and want to improve their own decision-making. Data testing has helped those firms to ask better, more meaningful questions about how they can change their firm to improve opportunities, and to have more honest, constructive conversations with partners.

  • True bias testing is agnostic in that it shows biases of all types, so for example, one of the surprising findings is that some firms show a bias against rainmakers. That may be due to a firm value that limits maximum partner compensation, and there is nothing wrong with that if it is well understood and accepted within the firm. But if that value creates significant discrepancies compared to the rest of the market it can put the firm at risk of losing some rainmakers.

  • It is easy to predict when a firm is suffering partner dissension about compensation, just by looking at their data. It isn’t unusual for two partners with identical performance data to have compensation differences of 20% to 30% due to soft contributions and/or behavior issues. But when compensation differences exceed that range, or such differences become widespread throughout the firm and yet the reasons are not apparent to the average partner, then there is typically dissension about compensation.

Bias testing of partner compensation is increasingly common and rather than being a process that firms fear it is being used to foster important, meaningful discussions that improve teamwork, diversity, inclusion and even profits.

Blane Prescott is a Consultant and the Managing Shareholder with MesaFive, LLC, a strategy and management consulting firm based in San Francisco and Tokyo.  Blane works with clients on a variety of management and strategy issues, including governance, strategic planning, merger negotiations and assessments, partner compensation, economics, growth, and restructuring.  He has worked with over 1,000 law firms, in-house legal departments and private equity firms throughout North America, Asia, and Europe.

Blane was a co-founder of the Hildebrandt Institute, and is the author of more than 60 articles on law firm issues.  You can read some of his recent articles at https://www.mesafive.com/insights.

Blane was a Partner and Consultant with Hildebrandt International for more than 20 years and has served as the CEO/COO of large law firms based in the United States.

May, 2021 | Article

We’re Getting Regulated, And Why It’s A Good Thing

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Cooley, Sam 1
Author Sam Cooley

As technology continually shapes the way the legal industry conducts itself in a digitized world, the need for financial transparency among those in the legal profession is beginning to be shared by software providers as well.

As observed in Alberta, the trust safety team responsible for auditing the books of lawyers in that province has taken on an increasingly proactive role in regulating software providers of legal accounting and practice management. Since late 2018, the Law Society has pushed for its membership to generate and submit data electronically. This trend began in 2011 when the province’s regulator of lawyers launched the Electronic Trust Transaction Reporting Program.

Increasing numbers of firms have migrated to use this digital gateway as a primary method of submitting financial data to law society regulators, but not all.

“Our goal is to have all law firms submitting their data electronically by 2022,” says Chioma Ufodike, manager of trust safety at the Law Society of Alberta. In a run up to this deadline, the regulator has taken a proactive move to spread the burden of financial responsibility not only on lawyers, who will always be duty-bound to their Rules of Professional Conduct, but also on the providers of software who aid and facilitate such duties in an automated manner. 

Software providers will need to accept that changes will be necessary in order to continue serving the unique needs of legal professionals. “Above all else, privately owned software companies must absolutely be competent if they’re to provide audit-ready software services, that’s why we have our developers working around the clock to modify our product so we can be approved for use. To us, it just makes sense to provide the best compliance possible,” says Terry Curtis, CEO of uLawPractice.

From late 2020 through until 2021, uLawPractice had ongoing talks with LSA’s trust safety team, in conjunction with operatives from Price Waterhouse Cooper, regarding the format in which reports were filed by the software. Along with numerous other changes to the delivery of its services, this led to the April 28 LSA approval of uLawPractice. uLawPractice can now be used by law firms in Alberta to manage their books and records.

Other software providers have been through a similar yet modified process dependent on the level of complexity of their services. For example, software solutions for lawyers which only handle the practice management portion of a law firm’s books, have also been observed and approved by LSA for use.

The success of LSA’s pilot program (to regulate software providers) may ultimately serve as a playbook in other jurisdictions. As regulators in other provinces look for new ways to enhance and safeguard the public interest during a time of immense digital disruption, the creation of a software approval regime can actually streamline a Law Society’s own auditing and analytics workflow.

Given the opportunity to provide direction to software providers, regulators can ensure uniform reporting outputs among firms making use of such technologies. In this way, the Law Society can alter the data streams that will be entering their own monitoring technologies, greatly enhancing their own abilities to audit law firms and flag problematic accounting on behalf of firms undergoing audits.

Bringing interested stakeholders (software providers) in contact with regulators with an approval regime pays large dividends well into the future, as human resources within the regulatory agency can later be directed towards enhancing greater compliance elsewhere. Basically, regulating legal accounting providers enhances efficiency and safeguards the public interest while doing so. The regulator’s quest to fulfil its role to society goes hand in hand with the shaping of types of financially transparent technologies firms have at their disposal.

Sam Cooley is a writer & spokesman for uLawPractice, Canada’s most trusted digital legal accounting & practice management software

May, 2021 | Article

Business Partner Spotlight - RSM Canada

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Dutt, Catharine 13mar20
Aronshteyn, Alex
Authors Catharine Dutt and Alex Aronshteyn

Name of Organization / Company: RSM Canada

Organization / Company Overview: 

Expertise & Growth 

RSM’s purpose is to deliver the power of being understood to our clients, colleagues and communities through world-class audit, tax and consulting services. Our clients are the engine of global commerce and economic growth, and we are focused on developing leading professionals and services to meet their evolving needs in today’s ever-changing business environment.

Serving over 1,000 clients in business and professional services, including law firms, engineering and architectural firms, agencies and other consultancy businesses, RSM Canada’s dedicated team of professionals is highly attuned to the industry’s accounting requirements, reporting and business issues, as well as evolving tax legislation.

Service Overview 

RSM has dedicated experience working with law firms and their partners:

Our assurance services range include audits and reviews. Our professionals help in evaluating internal controls and support law firms in implementing new accounting standards, among other matters. Whether your legal firm operates on a local, national or international stage, RSM has capabilities to develop customized tax strategies that align with your firm’s objectives and your lawyer’s personal goals. Finally, in a global economy where you need to manage risk, leverage technology, change infrastructure, restructure your firm, or navigate transactions or disputes, we help you uncover new solutions to turn challenges into opportunities that drive results.

How many years have you been a Business Partner of TLOMA?

We have partnered with TLOMA on a number of initiatives since 2019 and are proud to deliver insights and ideas to the membership.

What has been your partnership experience with TLOMA over the years?

Aligning with our purpose of delivering the power of being understood, we believe in the value of engaging in industry associations like TLOMA to stay abreast of trends, opportunity and risks that affect their membership. Given our dedicated team of professionals servicing business and professional services firms, we also pride ourselves in the ideas and insights we can – in turn – bring to TLOMA’s members and strive to develop a closer relationship with TLOMA.

Favorite TLOMA memory?

We love the membership’s engagement in the special interest groups!

Catharine Dutt provides internal audit and risk management services to multi-national financial services entities. She delivers consultation with her experience of having worked in senior roles within both professional services as well as industry.

Catharine most recently worked for one of Canada’s largest banking institutions as vice-president and global head of strategy, planning and operations for the internal audit function. She was responsible for the strategic direction of the global audit function, along with audit committee oversight and global governance reporting, financial management, professional audit standards and data analytics.
Alex leads RSM’s Business Continuity Planning consulting practice having over 20 years of continuity management experience in business continuity, IT disaster recovery, crisis management and pandemic planning.

He has extensive expertise in program initiation and development efforts, both as an individual contributor and in leadership roles, including; requirements identification, solution evaluation, implementation, documentation, governance, exercise facilitation and audit.
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