There has been a significant mood shift within the global workforce over the last 18 months, believes Allens Arthur Robinson chief executive partner Michael Rose, particularly among lawyers.

According to Rose, the attitude of the workforce has gone from one of anxiety to one of frustration. He believes that dealing with this mood shift will be one of the greatest people challenges facing companies moving into 2010.

But Rose, along with his human resources team, believes he has a solid strategy for changing the attitudes among his lawyers.

"At the beginning of the year, there was an awful lot of press around very significant cuts in numbers at law firms around the world," says Rose.

"So there was a high degree of anxiety among lawyers at the end of last year and beginning of this year. What was pleasing for me was our approach of frank communication and letting people know what was going on. I think it dealt with that anxiety and helped people understand the environment and feel more confident about what was going to happen next."

The current feeling of frustration, he believes, stems from the fact that a highly mobile group of people - most of whom commenced their careers with a sense that there'd be a degree of mobility within their career and that they'd live and work in various places during the early years of their career - didn't get to realise many short-term ambitions because of the economic conditions over the last 18 months.

"My sense is that there is a large degree of frustration now. I don't think this is an issue specifically for our firm - I think it is for every industry and organisation," says Rose, who believes such frustration may soon be translated into a large degree of movement.

"Everybody everywhere is going to be getting up and moving and so, just as there might be a lot of people wanting to go to the market, it also seems pretty likely that the market is going to be pretty buoyant with people," he says.

Rose adds that it's therefore important for law firm managers to keep careers engaging and challenging - even if the environment is not presenting the challenges it once did.

"So part of our planning is to look at how the downturn has changed the experience that everyone has and whether there are ways in which, within the current market conditions, we can ensure that some of the frustration that people must be feeling is addressed."

According to Susan Ferrier, director, people and development at Allens, engagement surveys over the past three years have shown that individuals want to be inside an organisation that has strong leadership and a clear direction and strategy around where the company is heading. Aligning these business goals with personal goals can also help alleviate any frustration caused by the restrictive economic conditions.

Flexibility in the downturn

According to Ferrier, inclement economic conditions naturally led to a change in people strategies - some had to be put on hold and others implemented more quickly.

Voluntary redundancies, flexibility and open communication helped carry the firm through the difficult period.

"The absolute first strategy was one of pretty constant and very frank communication," says Rose. "We got very quickly to a point where people trusted that any decisions made weren't going to be something they were surprised by and I think people became confident that we were working our way through market changes in a sensible and structured way."

Redundancies were not something the firm looked to go into as a kneejerk reaction to the changes in the market, says Rose. Instead a voluntary redundancy program was introduced.

"We think our voluntary redundancy program was designed very well so as to provide a generous incentive to people who were considering a career change anyway and I think that the success of that program does indicate that it was well designed and appropriately targeted. I think our staff regarded it as a very positive move instead of a softening up measure as a response to the market change," he says.

A total of 115 people were made redundant within the firm. As the company enters 2010 - and with a possible upswing in the market in sight - Rose says the possible spectre of a shortage of good people is not a big concern for the firm and that it does not regret the decision to let these people go. While the firm offered voluntary redundancies, he says, it still held onto their best people. It also didn't cut to the bone.

"Our redundancy program was 'about right' is how I'd describe it," he says. "We actually did say 'no' to some people who had applied for redundancy because we wanted to keep them. We are still carrying people to some capacity - which gives us some flexibility in the event that conditions change quickly. We are very happy with the outcome, which reflects the careful design and implementation of the program."

A flexible work option was also introduced and was taken up by 8 per cent of the organisation. This was run in conjunction with the voluntary redundancy program and also took a tailored approach. There was no specific demographic that snapped up the flexibility offer, according to Ferrier, and she explains it went right across the board.

"There [was a spread from] young people who wanted to do something else on their day off to senior men who also wanted to scale back and perhaps spend more time with their children," she says. "Flexibility is a long-term sustained business practice now and I think that generationally people who are between 20 and 30 will want to work very differently from the old traditional style of work."

The people challenges of the future

Although Rose is confident that the legal sector will see a more confident period in the year ahead, he believes the landscape could look dramatically different, and that the activity from clients may not necessarily be as busy as it was before.

"Here in Australia we're seeing a greater emphasis on the Queensland and Western Australia economies - and most law firms tend to be concentrated in NSW and Victoria.

The [ability] to get good people to where the clients most need them to be is something that law firms will have to get better at working at in the future."

Another big challenge, Rose believes, will be the issues of pay and performance.

"Traditionally there has been a very loose linkage between pay and performance in our kind of firms and pay tends to ratchet up, on a seniority basis at least. That model really solidified in law firms over the last 10 years or so and was a reflection of the pressure in the market for lawyers," says Rose.

"Most of the firms have salary freezes in place and it will be interesting to see if that model re-emerges or whether there will be greater reliance on performance-related remuneration - including incentive-type remuneration, which is generally not widely used in the legal profession."

Courage to address emotions

One of the most important aspects of leadership, says Rose, is to have the courage to address sensitive issues. He believes, after discussions with other CEOs and industry experts, that there is a need for greater recognition of emotion and feeling in the workplace, particularly around the notion that people need to feel proud, valued and secure.

"Things like that don't turn up in strategic plans but turn up in how an organisation performs," he says.

"I sometimes think that when people talk about the 'courage of leadership', the kind of courage they're talking about is the courage to recognise what many people label as the 'soft issues' of leading people. But they are, in fact, really quite important issues, usually difficult issues to talk about - and difficult issues to get right."