In a law firm setting, organizational conflict may involve employment decisions, such as performance reviews, partner selection or interpersonal issues, ranging from annoying behavior to actionable mistreatment. Conflict in law firms also may involve ethical issues, such as conflicts of interest and the management of client funds. The existence of conflict is normal. But the additional pressures under which law firms operate increase the need to manage conflict properly or risk the likely consequences.

Ideally, issues would be brought directly to the attention of firm management, through the managing partner, practice group leader, office manager, human resources department or another official firm resource. But often that does not happen. People may be uneasy with the idea of bringing a complaint through these formal channels for a number of reasons. For example, they may fear retribution, be concerned about the perceived stigma of being a “complainer,” or be embarrassed to discuss their concern.

The fact that their discussion would not remain confidential is another common reason for hesitation. In addition, there may be a belief that the formal channels are too closely tied to the firm’s leadership and are not, therefore, truly neutral. Thus, individuals may not come forward because they believe that leadership may perceive the concern as trivial and unimportant. Many feel that it is better not to raise their complaint than to have the complaint be ignored.

The High Cost of Conflict

The temptation to ignore conflict is a strong one. But failing to resolve conflict can lead to significant costs for the firm. For example, consider the following:

Loss of Talent

The cost to replace a high-performing paralegal or legal assistant is high—as much as 1.5 times the employee’s annual salary. And the costs associated with lawyer turnover are even higher. In the case of a junior associate, the firm loses the significant resources it spent to train the associate without yet having benefited from its investment. And for attorneys with a significant book of business, the costs of lost clients can be staggering. Add to th0se costs the lost productivity and harm to moral that inevitably follows the departure of a team member.

Loss of Clients

Clients have more choices than ever before when selecting legal counsel, making it more likely that they could take their business (and their referrals) elsewhere if unhappy. When requesting bids for legal services, many organizations ask firms to include statistics about employee retention and attrition. Clients also are concerned with a firm’s reputation. Online legal tabloids like Above the Law give unhappy associates a national audience to voice displeasures about the workplace and, in turn, potentially cause significant harm to client relations.

Legal Actions

The costs of litigation are well-known to lawyers, of course. If faced with legal action resulting from internal conflict, though, these costs take on a different meaning altogether. Legal fees are not the only expense; lost productivity caused by the time and attention that must be diverted to defending a claim as well as lost productivity resulting from internal gossip are inevitably associated with legal action. Also, a legal action brought against the firm can expose the firm to bad publicity and cause significant, though perhaps intangible, harm to reputation.

Resolving Conflict With an Ombudsman

Traditionally, ombudsmen have been used by universities, government agencies and labor unions. Recently, the idea has become more popular with corporations as well. Ombudsmen also can be used in the law firm setting and, if done properly, can produce significant results. According to the International Ombudsman Association, the four principles of an organizational ombudsman are independence, neutrality, confidentiality and informality.

In the law firm context, an ombudsman is intended to complement existing grievance procedures already in place. He or she assures an additional level of anonymity and safety in raising issues to the firm’s leadership. Generally, the ombudsman reports to the board or to the most senior leader in the firm. Since ombudsmen are “outside” of the formal organizational structure, they have more freedom to raise concerns or to help others raise their concerns directly.

A law firm ombudsman can act in three capacities. First, as counselor, he can help staff and lawyers clarify the conflicts they are experiencing within the firm, such as interpersonal disputes, claims of mistreatment, supervisory issues, and concerns of unethical or unprofessional behavior. Second, the ombudsman can resolve disputes, whether by facilitating conversations, mediation, “shuttle diplomacy” or other method of conflict resolution. Finally, the ombudsman can take the role of organizational-improvement consultant. In this role, he can report patterns to leadership to avoid future conflicts altogether by improving the firm’s formal processes to help avoid recurring issues.

The Minority Corporate Counsel Association (MCCA) recommends that law 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.

There are many different forms that an ombudsman’s role can take, including that of a full-time or part-time employee, or as an independent contractor or consultant. Exactly which structure would most benefit a particular firm is a critical issue that should be considered in advance. Firms also should consider whether they are willing to take the corrective and organizational actions recommended by an ombudsman before engaging one.

*Minority Corporate Counsel Association, Creating Pathways to Diversity: A Set of Recommended Practices for Law Firms (2001), available online.