Law firms and ESG: getting it right

Invest in resources

Nothing comes from nothing. Corporate sustainability comes at a price, and law firms need to invest in ESG resources.

Firms rely on their employees to establish sustainable business practices. However, the relevant ESG expertise that is necessary for a professional sustainability set-up is rarely found within law firms. As is the case with other businesses, law firms should hire ESG or sustainability specialists to professionally guide and oversee their ESG and sustainability strategies.

ESG specialists can impart their expertise by developing and managing the firm’s ESG structures, strategies and activities. However, they need to collaborate closely with a variety of stakeholders and be embedded into the wider firm. The responsibility for solving operational challenges relating to ESG, from supply chain standards to employee health and safety, lies within several different departments. Within these departments, some resources should formally be reallocated to the firm’s ESG strategy.

Prioritise limited resources

Rome was not built in a day and neither was the sustainable law firm. ESG encompasses many fields of action. There is so much that law firms can do to become more sustainable, however it will take time and resources to achieve these goals.

Firms should narrow down the issues to be addressed by means of a materiality analysis, as required by professional ESG standards, but it will still be necessary to prioritise targets and projects. Even if a firm has invested into hiring ESG professionals and freed up resources in its various departments, its resources will be limited. While this is not law firm-specific, ESG ambitions are often unrealistic. Therefore, choices around what to prioritise will need to be made in order to make any progress.

Harmonise communication

It is tempting and easy for a law firm to present itself as sustainable to the outside world. Marketing professionals have the means and skills available to advertise their firms as the most sustainable law firm, which excels in supporting diversity initiatives, commits to a sustainable future for the next generation by sponsoring education projects and engages extensively in pro bono activities.

While no law firm needs to hide its light under a bushel, it might be worth considering whether the firm is practising internally what it preaches. For example, if the firm supports external diversity initiatives and proudly emphasises this on its social media accounts, but has a corporate culture that discourages parental leave for men, the firm could be accused of bluewashing. In addition, employees might not feel happy about this contradiction and the firm’s reputation as a credible and reliable employer might suffer. Therefore, external and internal communication and action should be consistent and aligned when it comes to ESG.

Build competencies

ESG is relevant to all units and departments in the firm. Therefore, it requires capacity building at the firm across all levels of seniority of legal and non-legal staff. It generates several benefits for firms in the immediate and long term, from staff retention to valuable knowledge that can be captured in client advisory work and contributes to realising the firm’s ESG strategy and ambition.

Manage the change

Implementing sustainable business practice in a law firm is a demanding transformation project. Many certainties, behaviours and philosophies that big law has taken for granted will be turned upside down. Just like with other transformation projects that touch on fundamentals, the successful implementation of a professional ESG strategy within a firm requires proactive change and expectation management. Governance as well as communication and stakeholder involvement are key, as professional corporate sustainability is not self-explanatory. It is an emotional matter for many and requires sympathy for the different perspectives and collaboration across different departments, given ESG’s interdisciplinary nature.

This article first appeared in the June 2022 issue of PLC Magazine.