Those to whom evil is done: Toxic workplaces have a serious impact on the bottom line of law firms

Legal circles have been ‘a-twitter’ recently over a leaked resignation letter. In the letter, an associate at one of India’s largest law firms has alleged mistreatment by his seniors.

The general response to the fiasco can be neatly divided into two categories: there are those who echo Plato that the ‘young people are disrespectful and have no reverence’ and there are those who sympathize with the young person.

Not knowing any of the individuals or the actual circumstances involved, I can’t obviously comment on the matter. But it did bring back memories of my Recruitment Coordination Committee (RCC), which organized the job placement process while we were finishing law school. It was basically 2-3 days of trying to convince various employers to hire the soon-to-be newly minted law graduates.

As the recruitment process was being conducted, someone realized that it was the birthday of a big law partner. This particular individual was one of our most prolific recruiters, and consequently, demonstrating great sagacity, our RCC coordinator organized a cake to celebrate the milestone. We were all made to gather in a room for the celebration and the partner was bidden to blow the candles and cut the cake amid a robust, though semi-tuneless rendition of the appropriate song.

Once the cake was cut, the partner promptly handed the knife over to one of their recent recruits, and by way of a brusque hand gesture, asked them to handle the rest of the formalities.

That small (and somewhat offensive) interaction was sufficient to make me feel justified in my decision to not apply to law firms. Whether they would have taken me if I had, is a topic which we shall leave for another time.

Our profession has never been known to take care of its young. Stories abound of how ‘juniors’ are treated by their ‘seniors’. It is an open secret that there is widespread exploitation, often rising to abuse. As the extant letter in question itself suggests: seniors will treat you in the same “way that they were treated by their senior[s].”

So, what causes this and why should we worry?

A toxic work environment is not a problem unique to the legal profession.

MIT Sloan in a 2022 study has identified ‘The Toxic Five’ attributes that create a toxic work environment. It is an environment which is:

- Disrespectful

- Non-inclusive

- Unethical

- Cutthroat

- Abusive.

Despite my initial attempts at avoiding law firms, I have also come across them a few times in my career.

After almost 15 years of being a people manager, my belief is that a toxic culture is caused by the following:

Leadership: There is no getting around it. It starts at the top. As a former manager put it to me once, “What you whisper on the stage, becomes a hurricane by the time it gets to the back of the auditorium.” Your behaviour as a leader drives the culture, and if you don’t focus on the right things, chances are, no one else will either.

Promoting based on wrong criteria: The legal profession, like many other high-performing professions, has a weakness for the prima donna. In other words, if you are good at your work, whether making deals, court craft or drafting, the chances are high that you will be looked upon as a leader. The criteria used almost never considers whether you will make a good leader of people. I have seen many examples in my career of otherwise supremely talented lawyers transitioning to terrible people managers. 

Accountability: Finally, a culture of impunity, solely based on technical brilliance or the ability to bring in revenue, is a recipe for failure. Being made a leader of people is a responsibility not to be taken lightly, and it is extremely important that people are taught what is expected of them and then held accountable for their actions.

How does it matter, you may ask. After all, the success of a law practice or a law firm is solely based on the revenue it generates.

So, if concepts like doing the right thing and empathy don’t make sense to you, let me try and explain why it is important in money terms. A toxic work culture has a serious impact on your bottom line for the following reasons:

- It makes it difficult to attract and keep talent. While attrition may be sometimes unavoidable, there is a high cost to replacing people. Gallup suggests that the total cost of recruitment, replacement and training may well be more than one-and-a-half to two times the employee’s salary. The impact on your reputation is also detrimentally high, though difficult to quantify. 

- Gallup further suggests that a toxic culture can lead to disengaged teams. The lower productivity this entails can cost the employer up to 20% of the annual salary of the disengaged employees to do the same work. Money you could have saved, by just being nicer.

- Finally, there is clear evidence that toxic workplaces directly lead to higher medical and insurance costs due to the impact it has on the health of the employees. Some data seems to suggest  that when employees experience injustice in the workplace, their odds of suffering a major disease (including coronary disease, asthma, diabetes and arthritis) increase by 35% to 55%. By the way, if you don’t provide any of these ‘benefits’ to your ‘retainers’ or ‘juniors’, be aware that they may decide to go to places that do.

There is no doubt in my mind that our profession needs to do some serious soul-searching here.

With the high number of law graduates being churned out by the ever-increasing number of law institutes, it may be tempting to think that culture doesn’t matter. After all, there will always be someone at the door who is hungrier and more willing to put up with bad behavior. But the reality is that there is a cost to this approach, and it just isn’t sustainable in the long run.

While I hope change comes to our noble calling, I fear Auden’s words will continue to resonate for a while yet:

I and the public know
What all schoolchildren learn,
Those to whom evil is done
Do evil in return.  

Navneet Hrishikesan is Senior Director & Associate General Counsel for Asia Pacific & Japan SP at Cisco.

All comments are made in his personal capacity.