Conflict: Familiar, Inevitable, and Challenging to Manage Formally

Most organizations have conflict. In a law firm setting, organizational conflict might involve employment decisions, such as performance reviews, partnership decisions, or claims of mistreatment ranging from annoying behavior to actionable discrimination or harassment. Law firm conflict might also involve ethical issues (conflicts of interest, client trust fund management)

The existence of such conflict is entirely understandable, even predictable- law firms are certainly not unique in having these challenges. But the additional pressures under which law firms operate puts more pressure on firms to manage their conflict well, or suffer the consequences, which include loss of reputation, bar association discipline, and unwanted turnover – all of which translate into lost billables and revenue, and clients looking for new representation.

What is important to address is how conflicts are managed within the firm. We would like to think that issues are dealt with when people come and talk with the managing partner, practice group leader, office manager, HR professional, or other firm resource. But often that does not happen.

Why might law firm staff or attorneys be unwilling to raise conflicts and other issue of concern with the formal channels available to them? There are at least several reasons why not. The first is that people often do not feel “safe” talking with any of these formal resources. They fear retribution of some kind, are concerned about the perceived stigma of raising an issue, or might feel embarrassed. Would a legal secretary or assistant talk with the office manager about her being asked by an attorney to be “creative” with an expense report?

Related to this fear is the fact that these conversations are not confidential. Would a young associate approach the managing partner about her perception that a practice group leader is abusive? Or discriminating against her or someone else?

Another reason attorneys and staff might not raise issues is their belief that those formal resources will not be able to effectively act in support of them- because those resources are closely tied to the firm’s leadership and are therefore not “neutral”.  People might also not come forward because they believe that nothing will change, and these resources don’t really want to hear attorneys or staff “vent” or express individual challenges.  Does a practice group leader want to hear another partner expressing concerns about inappropriate record keeping or subpar client service? Will the firm’s HR leadership be approached by people who have trouble balancing their work commitments with the demands of young children at home?  If people think they would be wasting their time (and the other person’s time) they will not express their concerns or issues.

The High Cost of Conflict

OK, so some things are perceived as problems or conflicts- either for individual attorneys or staff or for groups of people. So what? Not every wrong has a remedy, right?  Why should firms care about the conflicts and concerns that they don’t hear about? This is a critical question. The answers include:

1)      Loss of talent

How much does it cost a firm to replace a high-performing paralegal, legal assistant, or attorney? Two times her/his annual salary? Remember that these costs include lost productivity, training, benefits, and more.

2)      Loss of reputation

What would happen to your firm’s reputation if the local newspaper wrote a story about the firm being unfriendly to certain minorities? Or a bad place to work? Or if abovethelaw.com was actively posting comments from mistreated associates?

3)      Loss of clients/business

Clients have more choices than ever before about who gets their business. And they might very well take their business (and their referrals to other potential clients) to other firms as a result of a firm’s behavior toward them, toward another client, or even toward internal staff.

4)      Legal action against the firm

How much does litigation cost against the firm? (We know this one, don’t we?) Remember to include in this measurement not just legal fees, but lost productivity of the lawyers and staff involved, lost productivity of everyone else who is talking about the case by the water cooler- as well as the loss of talent, reputation and clients resulting from the legal action.

One Solution: Using an Ombudsman

The term “ombudsman” has different meanings to different people and the role is defined differently by different organizations. (The term is Swedish and translates literally as “office man”). Universities and government agencies often have ombudsmen, as do labor unions. More corporations are now using the role as well, and the ombudsman function is different in the business world: it is not one of advocacy and formal investigation, as might be the case in other settings. According to the International Ombudsman Association, the four principles of an organizational ombudsman are independence, neutrality/impartiality, confidentiality and informality.

An ombudsman is an independent, neutral, and confidential resource to anyone employed by the firm; a resource that complements existing grievance procedures that might exist within a firm. He/she assures an additional level of anonymity and safety in the raising of issues to the firm’s leadership. Generally, the ombudsman reports to the board or the most senior leader in the firm. (In corporations, ombudsmen report to the CEO, Board of Directors, or perhaps an audit committee of the Board.) Since the ombudsman is “outside” of the formal organizational structure, he/she has more freedom to raise concerns or to help others raise these concerns themselves.

A law firm ombudsman can:

1. Help firm staff and attorneys clarify challenges they are facing or conflicts they are experiencing with others in the firm or with the firm itself. Issues might include interpersonal conflicts, claims of mistreatment, unfair or inconsistent firm practices, supervision issues, unusual stress, and concerns of unethical or unprofessional behavior. The ombudsman is a counselor.
2. Assist staff and attorneys in resolving disputes, whether by facilitating conversations, mediation, “shuttle diplomacy” involving people in a tense relationship, or any other method of conflict resolution that will provide positive results. The ombudsman resolves disputes.
3. Report patterns based on themes and aggregate data to leadership so that future liability or conflicts can be minimized if not avoided entirely. The ombudsman can make significant contributions to the firm’s formal processes. For example, an ombudsman can share patterns of issues being raised by employees (such as practice group conflict or inappropriate leadership behavior) so that those that make firm policies will be more fully informed. The ombudsman is an organizational improvement consultant.

The Minority Corporate Counsel Association (MCCA) has recommended that firms use an organizational ombudsman, “so that attorneys who want to discuss their experiences have a well-trained and well-informed person to whom they can turn for guidance”. According to the MCCA,

“Law firms should earmark resources that allow all attorneys to voice their concerns, doubts and ideas in a confidential or even anonymous forum, where they are not fearful of retaliation or retribution from senior management. Firms that are receptive to the issues raised by all attorneys will be able to change their culture, policies or practices. Those that stifle feedback will have reticent and unhappy associates who may depart whenever the first good opportunity knocks.” [MCCA, Creating Pathways to Diversity: A Set of Recommended Practices for Law Firms]

Firms should consider whether they would be willing to take appropriate individual and organization development measures based upon the ombudsman’s work and recommendations. They should also keep in mind that there are many different forms an ombudsman’s role might take, including full-time, part-time, and contract arrangements. Exactly which structure would be most effective for a particular firm, and how to establish the role, are critical and complex issues that may be the subject of a future article. For now, firms are encouraged to begin to consider the benefits of using an ombudsman to proactively manage conflicts, support employees, and protect the firm.

[A version of this article was originally published on the American Bar Association's Law Practice Management website in February 2010.]

Introduction

Many large organizations benefit from internal (in-house) dispute resolution (DR) programs. These services can be highly successful in terms of resolving disputes quickly and informally, thereby avoiding the potential of litigation against the company, the reduction in productivity and engagement, and/or the loss of talent. However, as useful as internal DR might be (my informal research indicates that over 70% of matters are resolved), organizations do not leverage it as much as they can; there is much value “left on the table” after disputes are resolved. This article provides a brief overview of how DR works and how it can add more value to an entire organization- primarily to leadership development, but also to decision-making, performance management, and work team dynamics.

Overview of Internal Dispute Resolution

Most organizations encourage disputes and concerns to be resolved at the local HR level. If possible, this is the best level at which to voice and resolve concerns because it is likely to be the closest to the problem (e.g., supervisor, culture, specific work challenge, work practice, etc.). However, there are times when the conflict cannot be resolved at the local HR level- which may be the case for a variety of reasons.

Increasingly, organizations are also using some type of dispute resolution service, whether it is called an office of dispute resolution, ombudsperson, or some title reflecting the intention to employ a neutral resource to resolve concerns fairly and expeditiously.  DR facilitation might include counseling an employee, conducting investigative interviews with an employee/claimant’s colleagues and/or manager(s), gathering performance feedback data, assisting in facilitating agreement and understanding between an aggrieved employee and his/her team or manager, and more.

Benefits to the Organization

My experience with these dispute resolutions programs is that they can be very effective. They provide the following benefits to the organization:

Quick resolution
An effective DR facilitation process provides a means to address a claimant’s concerns very quickly, often within a few weeks. Such swift conclusions enable all parties to return to work quickly, avoid drawn-out disputes that drain energy and create tension in work systems, and promote uncertainty and suspicion. As one of my old law partners once told me, “a quick resolution is a good resolution.”

Talent retention
Employees who do not feel heard, or have no place to talk about an issue that is very challenging or disturbing to them except an attorney’s office, might very well leave the company. Certainly, considering the litigious environment in which we operate, this should be avoided if at all possible. Perhaps more importantly, even in a slow economy with the “war for talent” not raging as it was a few years ago, organizations do not want to be losing talent for this reason. [Although it is certainly true that some percentage of claimants are poor performers, it would be best to let go of such performers in a clean, deliberate way rather than by constructive termination or a messy dispute.]

Avoidance of litigation
This point I can keep really brief. Litigation is expensive to undertake, generates negative publicity, and features the potential for dramatic judgments. Any reasonable efforts to avoid it benefit the organization.  Remember: the lawsuit is reported on page one; the dismissal of the lawsuit is printed back in the obituaries section.

Organizational improvement
This is the silver lining of dispute resolution. The ability to resolve workplace disputes informally provides the benefit of improving the organization because what is learned in the process can be used for improvement. For example, systemic or managerial trouble spots that are revealed during an informal investigation, for example, can be addressed behind the scenes. This will be discussed more fully below.

What Makes these Programs Work

Internal dispute resolution works for the following reasons:

• Focus given to resolution.
  Line managers and “local” HR people are understandably pulled in many directions and may not have the time or energy to give their undivided attention to an issue that may be deeply important to the person raising it. The HR resource may also not have the counseling skills to really “hear” the person, and may also be perceived as being too close to the issue to be impartial. They are doing the best they can, but they may not be able to dig into the details as much as may be necessary. In effective dispute resolution programs, a skilled facilitator is a dedicated resource who can apply his/her counseling, investigating, and mediating abilities to resolving issues- with greater success.
• Employees with disputes feel heard.
  The counseling of employees by a facilitator (or, for that matter, by others to whom the claimant may be referred- such as EAP) is extremely valuable; perhaps more valuable than any “solution” to a claim. Also, related to the previous point, HR resources may not have the skills and experience to effectively counsel the aggrieved employee. The dispute resolution facilitator performs this critically important function.  Claimants have the opportunity to express their concerns and feelings openly, which itself can be a significant step in resolving a complaint. Giving the employee the time and space to “vent” also contributes to the employee’s willingness to reach a cooperative solution. In my experience facilitating disputes it is not uncommon to see the most “movement” as a result of simply and powerfully listening to the employee raising an issue.
• The parties own the resolution.
  In most organizations, participation in the internal dispute resolution process is voluntary. The employee/claimant is not obligated to use the service, and the manager/work group is not required to participate in the informal resolution if invited to do so. If a facilitator makes inquiries and/or performs some investigation, the parties are under no obligation to compromise or to consider the others’ positions. This is both good news and bad news: the power of resolution remains in their hands, and they must truly believe that participation and good faith discussions are in their best interests. It also means that any resolution will be supported by the parties to a greater degree than if a decision was forced upon them by a judge, jury or arbitrator in a binding proceeding, or the legal department. And when the parties are invited to “come to the table” together to reach resolution, there is a higher likelihood of an ongoing relationship between the parties (less “bridge burning”).

Leveraging Learning from Conflict

What is uncovered and discerned from investigating and resolving employee concerns may have great value to the organization. For example, when I have facilitated resolution of conflicts I have identified the following:

• Management strengths and weaknesses,
• Important cross-cultural differences that impact day-to-day operations,
• Training needs for employees
• Skill gaps for supervisors
• Communication process flaws/lapses
• Ineffective decision-making processes
• Problematic team and department cultures
• Corporate ethics concerns

The opportunity is to leverage the awareness of these concerns so as to minimize the chances of them arising again in the future. After you slip on a wet surface, you either try to clean it or do whatever you can to avoid it in the future. A dispute resolution office/facilitator has knowledge of these spills that can help an organization improve its performance and processes. It would be foolish not to use what has been learned. This is a core Organization Development principle- as well as good common sense.

1) Leadership Development

a)  Coaching
What is learned as a result of the dispute resolution process is extremely important for leaders to know: what to do more of, what to avoid, and how to lead more effectively with different people and in different situations.  A skilled dispute resolution facilitator can provide invaluable coaching to leaders whose groups/departments were the subject of the dispute, and coaching about how to limit avoidable and unnecessary conflicts in the future.

b)  Leadership Development Programs
Internal dispute resolution professionals should be connected to any leadership/management development programs throughout the organization. I have seen the impact of real-life stories in these programs on many occasions. Sharing stories of how conflicts arose and how they were resolved enhances learning and illustrates key leadership skills that might otherwise only be discussed conceptually.

c)  Leadership Assessments
Learnings from conflict can also be used to design/modify organizational 360? surveys to ensure that the most useful questions are being asked. What is learned in resolving disputes can identify impactful leadership skills, which can be assessed through organizational surveys. Again, to not use what has been learned in the resolution process would be a regrettable lost opportunity.

2) Human Resources and Organization Development
Internal dispute resolution should be connected to HR within the functional area from which the dispute arose, both during and following the resolution process. Sometimes the issues that are presented by a claimant are symptoms of broader organizational problems, such as performance reviews/feedback, hiring issues, and lack of role clarity. The dispute resolution office must not hold these issues; they should be shared with the people in the operating group that could best take action to improve the organization so as to minimize the likelihood of future problems. Local HR will function best when informed with the lessons learned in the dispute resolution process.

Particularly as the scope of dispute resolution broadens so as to provide facilitation support to a wider array of work-related claims, it is important that the program have access to and collaborate with other organization resources that have expertise in the areas of the disputes (e.g., Talent Management, Organization Development, Succession Planning, etc.). The input of a DR officer can be a valuable source of feedback for those “thought leaders” within the organization, because part of their work is identifying what isn’t working well in the organization- and dispute resolution programs attract what isn’t working. Patterns of issues raised, whether related to the nature of disputes, organizational groups impacted, or other factors, can be extremely valuable diagnostic information. For example, an HR leader reviewing a succession planning system would be able to design something more effective if he/she were aware of any patterns of conflict related to the way talent is assessed in the organization. Simply put, if I tell them what conflicts I am seeing then they can make those issues part of their design process.

3) Law Department
There might also be opportunities to integrate with the law department, for example stories might be shared that illustrate some of the potentially illegal activities occurring in the company. When I was a lawyer representing businesses I would frequently ask about a company’s experience with particular issues. Attorneys can be provided anecdotes that would support them in overseeing their clients’ activities so as to most likely “catch” problems as early as possible. Presentations/briefings by the dispute resolution facilitator to the legal group can support this effort.

4) Ethics Initiatives
Many organizations now have initiatives or even offices related to ethics. What a facilitator learns in resolving a dispute may very well have ethical implications. These should be brought to the attention of an ethics officer or other key leaders who might be primarily responsible for matters of organizational ethics. Again, this is an opportunity to learn from the conflict; disputes can be used to minimize the occurrence of any future breaches of ethics.

5) Office of Diversity
Those involved in organization dispute resolution should also be in regular contact with the company Office of Diversity. “Problems” related to diversity will appear in the DR office, whether they pertain to cross-cultural differences, harassment/discrimination, performance management issues related to a failure to give appropriate feedback to “diverse” employees, etc. Offices of Diversity would benefit from knowing what diversity-related issues are causing problems across the organization. The DR office can be a valuable source of input.

Moving Forward

I encourage you to look for ways to use dispute resolution as an opportunity for individual learning and organization development in your organizations. Distill value from the conflicts that arise.

George Bernard Shaw wrote, “If history repeats itself, and the unexpected always happens, how incapable must Man be of learning from experience.”

To what extent will your organization learn from its experience?