Meet This Most Unusual Law Firm: 4-Day Workweeks And No Bosses
Recently we wrote about New Zealand’s most innovative law firm, WCLC. We began that story with a reference to our Bucket List visit to Dutch law firm BvdV. On reflection, we realized that we had never adequately explained why this law firm inspired us so much.
Probably it was because this was our very first Bucket List visit. It was in January 2016, just after we started Corporate Rebels. We hadn’t, back then, developed the knowledge or understanding to write the blog post they deserve! Here, with a better understanding of how they work, is a fresh introduction to one of our big inspirations, BvdV.
On this, our very first Bucket List visit, we met co-founder Sjoerd van der Velden and lawyer Martina van Eldik. That was just a beginning. We were so inspired that we asked Sjoerd to become one of our mentors. He agreed, and has been a highly trusted Advising Rebel since then.
And there is more. Sjoerd and other lawyers at BvdV provide us with legal advice on a regular basis. They are a huge help, especially with the complicated legal stuff involved in setting up our shared ownership structure (which involves, among other things, block-chain technology—but more on that soon).
Also, lawyer Daniel Maats currently supports us in redefining and radically simplifying the employment contract. As you can see, we need a bunch of progressive lawyers to work together with us to change the world of work.
Not your typical firm
When Sjoerd and co-founder Harm sensed the opportunity to set up a new kind of law firm, they looked for a model that would stimulate entrepreneurship from everybody—a model that would encourage everyone to add value to the firm.
So, in 2006, they adopted a philosophy inspired by Bucket List hero, and Brazilian entrepreneur, Ricardo Semler. For example, they introduced radical practices like a 4-day workweek, a limited period of ownership, and democratic decision-making.
In a sense, the BvdV model was a reaction to the partner model at traditional law firms: a model many lawyers find demotivating. In contrast, BvdV believes staff can be more motivated by trust, ownership, democracy and transparency.
The 4-day workweek
“Before we founded BvdV, Harm and I designed a system in which employees need to work a minimum number of billable hours for us to break even as a firm. We call this the Break Even Point, or simply BEP. Employees set their own hourly rate with their clients. Of the extra billings hours above BEP, an employee receives half.” The other half is distributed between shareholders of the firm.
The emphasis in the BvdV model is on cost reduction rather than turnover. “In practice this model implies that the lower we can keep our BEP, the more everyone will earn. The model is constantly forcing us to be collectively aware of our costs, and how we can keep them as low as possible.”
That’s why at this firm you don’t see any leased cars or telephones paid for by the boss. Instead, they prefer to spend their money on education, personal development, and the office and its prime location.
But they also ensure that a 4-day workweek is the norm – not the exception. There is a yearly maximum equivalent to about 1128 billable hours (47 weeks 4 days 6 hours) you can make at the firm. “We introduced a turnover cap instead of turnover targets. That’s how we want to prevent excessive billing, and thereby introduce a workweek of only 4 days. Sure, you can work more hours, but it is just not financially beneficial for you. We believe that a healthy work-life balance is essential for creativity and long-term employment.”
Limiting the period of ownership
At BvdV there is the fundamental principle that everyone deserves a chance to participate as an owner (which has been introduced years after its foundation). There are some unique aspects to their shareholder model.
You need to truly earn the right to own shares
You can only become a shareholder when all employees agree you deserve to. “This person brings in so much work that this person deserves a bigger piece of the pie.”
Besides bringing in work, other more 'social' requirements are considered as well.
The shares aren't worth anything
The shares aren’t worth anything. So, you don’t have to purchase them and you can’t sell them for money. “They only give you the right to receive a dividend.”
The shareholder period expires
There is a maximum number of 13 years that a person can hold shares in the firm. This safeguards promotion opportunities for all. “At our firm nobody can be a shareholder forever. Once you hold shares for more than 13 years you will have to get rid of them.”
At BvdV there is a culture of radical transparency at all levels, including organizational and financial. This means all employees have a clear understanding of everything that goes on within the firm – including financials and salary levels. In fact, all have a democratic say in the direction of the firm. But they don’t decide by democratic majority. They strive for consensus on all issues.
“We hold a meeting once a month in which we decide about the basic stuff. Every 6 months we hold a company-wide session in which we decide about more fundamental issues related to, for example, our strategy and the way we work together.”
There are no layers of functional hierarchy among the approximately 20 lawyers, allowing them to make decisions quickly, and with a broad support. “The system works pretty well within our relatively small firm. But, we do not think we want to grow bigger than this, otherwise our model and practices might become too complex.”
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In a previous post on Haier's RenDanHeYi forum in Shanghai we shared which speakers we were looking forward to, hoping they would provide “Management Fireworks”. Last year we were hosting the forum, but this year we could sit back and listen. Now it’s time to share with you. So, strap in and enjoy!