By Legal Futures Associate CTS
In November 2022, CTS collaborated with Modern Law on an intimate and informative roundtable, drawing on experts from firms across the country. These law firm leaders talked openly with us and with each other about a range of topics, one of which was the importance of Environment, Social, and Governance (ESG) and the role it will play in the legal sector over the coming year.
The 2022 Wolters Kluwer Future Ready Lawyer Survey suggests that law firms are preparing to meet the rising need for ESG knowledge and skills. They found that:
- In the past 3 years, 50% of law firms in Europe and the U.S. have established an ESG practice area.
- 27% of firms already had an ESG practice for over three years, and
- 18% have plans to establish one within the next three years
- 45% of firms reported an increase in corporate clients requesting ESG guidance
“There has been a shift in the function of law firms, as they become more guided by a moral compass than business opportunity.”
Grant Sanders, Partner & Compliance Officer for Legal Practice (COLP) at Stephen Rimmer LLP
Modern Law Roundtable, Nov 2022
In this blog, we explore why law firms that establish and leverage an ESG practice area may gain a competitive advantage by driving client demand, attracting and retaining talent, and boost brand reputation.
Attracting top talent
A survey carried out by Deloitte, during the global pandemic, found that climate change and protecting the environment is the #1 concern of Generation Z, and #3 for millennials. These generations in particular value employers that prioritise ESG because it demonstrates that the company is committed to making a positive impact on society and the environment. Deloitte also predicted that by 2025, millennials will constitute around 75% of the total workforce, so law firms who place focus on their ESG initiatives are one step ahead on the recruitment ladder than those who do not.
This alignment of values can foster a sense of purpose and meaning in employees’ work, which can create a more positive work culture, as well as attract and retain talent. Additionally, law firms that prioritise ESG are often perceived as being more innovative and forward-thinking, which can attract top talent and enhance the firm’s reputation.
Driving client demand
As the values and expectations of the public evolve, companies must adapt accordingly. Environmentalism is no longer seen as a niche interest limited to a select group of activists; rather, it is increasingly viewed as a corporate responsibility that clients expect companies to prioritise as a matter of course.
There is an increasing demand for law firms that prioritise ESG because it demonstrates that the firm is committed to making a positive impact on society and the environment. Clients may view law firms that prioritise ESG as more socially and environmentally conscious, which can have a positive impact on the client’s own reputation, as they can demonstrate that they are working with a law firm that shares their values. This alignment of values can foster trust between the client and the law firm and may improve the overall client experience.
Boosting your firm’s reputation
Acting upon sustainability and having an environmental policy in place can provide a unique opportunity for your law firm to stand out in such as crowded marketplace.
In today’s world, clients are increasingly concerned about the impact of their choices on the environment and society, and they are looking to work with legal practices that share their values. By developing and implementing a robust sustainability strategy, companies can demonstrate their commitment to making a positive impact on the world around them.
Having an environmental policy can also provide insight into your firm’s culture and values. It shows that a firm is willing to take responsibility for its actions and is committed to operating in an ethical and sustainable manner. This can build trust with customers and stakeholders, which can ultimately lead to increased loyalty and brand recognition.
Establishing and leveraging an ESG practice area can provide a competitive advantage by driving client demand, attracting and retaining top talent, and boosting the firm’s reputation. Clients increasingly expect companies to prioritise ESG, and law firms that demonstrate their commitment to sustainability and social responsibility can differentiate themselves in a crowded marketplace.
Read the CTS & Modern Law roundtable write-up to find out what law firm leaders had to say about the important role of ESG within the legal sector.
