Regulatory action drives attention to corporate culture of law firms

Pressure at work and an aggressive, uncaring workplace in law firms can lead to solicitors making careless decisions and mistakes and even trying to cover it up. A high-profile prosecution of a recently-qualified solicitor has reignited the discussion around corporate culture of law firms and mental wellbeing in the legal profession. 

The Claire Matthews case

A few weeks into starting a new job, Claire Matthews took documents home (opens a new window) in a lockable briefcase while acting for the Solicitors Regulation Authority (SRA) in a data protection case. However, she subsequently fell asleep on the train home and left it behind. The briefcase could not be recovered.

When asked where the briefcase was Matthews lied to colleagues about the whereabouts of the papers. A week later, she informed her firm that the documents had been left on the train that morning, a further inaccuracy. Matthews told the Solicitors Disciplinary Tribunal (SDT) that she was overcome by “uncontrollable fear, anxiety and panic” upon realising the briefcase was lost and claimed she tried to kill herself as a result.

Neither Matthews nor the firm reported it to the SRA and it was a complaint from an involved party that sparked the investigation. The SDT found that the delay in reporting what had happened breached the firm's information security policy and contravened Matthews' duty to maintain the trust the public placed in her and in the provision of legal services.

The SDT struck her off the role having found that she acted dishonestly by concealing the loss of the documents and by providing further untrue information.

Matthews has filed an appeal claiming that the tribunal failed to investigate and properly weigh up the impact of the incident on her mental health and therefore it erred in its findings in relation to misconduct and dishonesty.

Following the Matthews’ prosecution, lobby group the Junior Lawyers Division (JLD) said that it has lost confidence (opens a new window) in the SRA to fairly prosecute young solicitors whose judgement is clouded by pressures of work.

The Matthews case echoed previous cases where young lawyers were banned despite reporting toxic work environments and working under extreme pressure.

In Australia, graduates working at a top-tier legal firm were subjected (opens a new window) to gruelling conditions, with some employees choosing to sleep at the firm's Melbourne office rather than return home. Day and night shifts were allocated, so work could continue around the clock, according to a witness statement. The case has triggered an investigation by the Australian health and safety regulator.

Charlotte Parkinson, chair of the JLD, has written to SRA chief executive Paul Philip calling for an immediate review in its approach to handling junior lawyers who report mental health issues or a toxic working environment. 

A high-pressure environment

Perhaps the wider issue of stressful environments and culture should be considered more holistically as part of the legal regulatory landscape.

The sector is known for long working hours and high pressure to produce as many billable hours as possible. Billing by the hour remains central to private law practices despite criticism that it creates adverse impact on client service and lawyers’ quality of life. Studies show that, on average, lawyers actually work three hours for every two billed. No solicitor is immune to stress and anxiety whatever the level of post-qualified experience.The Matthews case should perhaps reinforce firms' awareness of all their employees' wellbeing.

Law firms are increasingly aware that stress and anxiety can negatively affect productivity and result in a heightened risk of professional negligence claims or regulatory investigations against the firm.  

The insurer’s perspective

Insurance underwriters are alive to this risk and are keen to understand a firms' culture and initiatives concerning wellbeing.

In order to mitigate risk, the corporate culture should embody fairness, openness, good communication, and a no-blame culture on mistakes/complaints. Underwriters assessing the risk maturity of a corporation will want to see evidence that employees feel valued and perceive the culture to be supportive. From a risk perspective, happy and healthy employees are less likely to make mistakes. A friendly and open culture where staff looks out for each other and deals with issues in a non-judgemental way is more likely to prevent employees to cross red flags and cover up mistakes. 

The UK regulator is also aware of the risk that a toxic corporate culture creates and is developing guidelines that will explain how regulatory levers will be deployed to address deficiencies in corporate culture. 

Recommendations to foster wellbeing:

  • Create a no blame culture where staff are encouraged to be open about mistakes.

  • Train/educate managers to recognise early signs of stress.

  • Representatives of charities can explain signs of mental health issues to raise awareness.

  • Build a mentoring scheme.

  • Encourage discussions about general wellbeing between colleagues.

  • Promote a healthy lifestyle.

  • Increase awareness at year-end or at promotion times.

  • Align the firm's core values with wellbeing and demonstrate your commitment to them.

At Lockton, we are aware of the risk to our clients arising from employee stress and anxiety. We are happy to share some of our own initiatives with clients and participate in a general discussion around these issues. 

Lockton is also able to help deliver employee benefits programmes that are aligned to specific business objectives.

For more information, please contact: 

Chris Rofe, Senior Vice President, Employee Benefits Lockton

T: +44 (0)20 7933 2876 | E: (opens a new window)