The New Leadership Imperative on Psychosocial Risk

Psychosocial hazards, leadership accountability and performance metrics in the Australian legal profession

Psychosocial hazards are no longer a soft issue for Australian law firms. They are a core part of workplace health and safety, governance and leadership accountability. Under the model WHS laws, a person conducting a business or undertaking (PCBU) must, so far as is reasonably practicable, eliminate or minimise psychosocial risks arising from workplace hazards, which includes law firms, in-house legal teams and other legal service providers.

A psychosocial hazard is an aspect of work design, work management or the social and organisational environment that has the potential to cause psychological or physical harm. Common hazards in legal workplaces include high job demands, low job control, poor support, lack of role clarity, inadequate recognition, poor organisational justice, bullying, harassment and conflict in workplace relationships. Many of these hazards are leadership-shaped: they arise or worsen when leaders set unreasonable expectations, fail to provide support, or create cultures where conduct issues are tolerated in the name of commercial performance.

How psychosocial hazards affect leadership accountability

In the legal profession, leadership accountability is tightly connected to the way psychosocial risks are managed. When psychosocial hazards are high, leaders can no longer credibly claim they are fostering a culture of integrity, professionalism and wellbeing. Instead, staff quickly notice the gap between what the firm says and what leaders actually do.

The most significant psychosocial hazards in law firms are often the ones shaped by leadership:

• Unreasonable job demands – when leaders set unrealistic billable targets, ignore workload limits or expect constant availability, they create chronic stress and erode trust.

• Low job control – when lawyers have little say over how, when or on what matters they work, they feel powerless and disengaged, which is a leadership and work-design issue.

• Poor support – when leaders do not provide adequate guidance, resources or back-up during high-pressure periods, they fail to meet their duty to manage psychosocial risk.

• Lack of role clarity – when responsibilities, expectations and decision rights are unclear, confusion and conflict increase, which is a leadership failure to design roles properly.

• Poor organisational justice – when decisions about pay, promotion, workload allocation or discipline are perceived as unfair, trust in leadership collapses.

• Bullying, harassment and poor relationships – when leaders tolerate or model aggressive, dismissive or exclusionary behaviour, they directly contribute to psychosocial harm.

These hazards are not isolated. They interact and combine, creating higher risks when, for example, high workloads are paired with low control and poor support. In legal workplaces, that combination is common: tight deadlines, high-stakes matters and commercial pressures can all amplify psychosocial risk if leaders do not actively manage them.

For leaders, this means psychosocial hazards are not merely a wellbeing issue. They are a direct measure of how well leaders are fulfilling their accountability obligations. Persistently elevated psychosocial risks may indicate that existing controls are ineffective and should prompt leaders to review whether their WHS obligations are being adequately discharged.

Why the legal profession is especially exposed

The legal profession is particularly exposed to psychosocial risks compared with many other professional occupations because of the nature of the work and the culture in many firms. Lawyers deal with high-stakes, time-sensitive matters, often in adversarial environments. Many firms still operate on a billable-hours model that rewards endurance and discourages boundary-setting. In some legal workplaces, junior lawyers and support staff may experience pressure differently from senior practitioners, particularly where workload expectations and decision-making authority are unevenly distributed.

Research in the legal assistance sector shows that psychosocial risks faced by lawyers are not being adequately managed by employers, which is taking a toll on mental wellbeing. In private practice, the same patterns appear: high demands, low control, insufficient support and poor work design are common, and leadership accountability is key to addressing them.

The Law Institute of Victoria and other professional bodies have highlighted that anticipating and mitigating risk factors in the workplace will foster healthier cultures and reduce the potential for harm and misconduct. That is a leadership issue, not just a people issue.

From accountability to measurement

The problem many Australian law firms face is that leadership accountability is often vague. Leaders are held accountable for financial outcomes, but less so for how those outcomes are achieved. Historically, some organisations have placed greater emphasis on financial performance than on leadership behaviours or team outcomes. This undermines both wellbeing and long-term firm performance.

This is where metrics become essential. If you cannot measure something, it is very difficult to hold leaders meaningfully accountable for it. Law firms often avoid certain metrics because they feel uncomfortable, but those are frequently the ones that reveal the truth about performance and culture.

To integrate leadership accountability for psychosocial risk into performance reviews, firms should start by defining what they want to measure. While WHS legislation does not prescribe specific leadership metrics, firms seeking to strengthen psychosocial risk management may consider measures such as:

• Team psychosocial risk indicators – such as results from wellbeing or psychosocial risk surveys, pulse checks on workload, role clarity and support.

• Turnover and retention in the leader’s team – high turnover can signal poor leadership, unrealistic demands or a toxic environment.

• Sickness and leave patterns – unusually high stress leave or absenteeism in a team can indicate psychosocial risk.

• Feedback on leadership behaviours – from 360-degree reviews that specifically ask about support, fairness, recognition and psychological safety.

• Complaints and grievances – complaint trends, reporting rates and resolution outcomes.

• Workload distribution and utilisation – whether work is allocated fairly, and whether some individuals are consistently over- or under-utilised.

• Client and team satisfaction – including whether clients and team members report feeling supported and respected when working with the leader’s team.

These metrics should not be used punitively. Strong leaders use data to identify coaching needs, rebalance workloads, improve delegation and make expectations explicit. They contextualise performance, pair data with support and use trends rather than snapshots to avoid overreacting to single data points.

Embedding accountability into performance reviews

In Australian law firms, integrating accountability metrics into leadership performance reviews means changing how leaders are assessed. Traditionally, performance reviews focus on billings, realisation, collections and client development. While these remain important, they should not be the only measures of leadership success.

Firms should embed wellbeing and psychosocial safety objectives into strategic plans, key performance indicators and performance and reward systems. This includes:

• Explicit leadership standards – defining what good leadership looks like in terms of supporting wellbeing, managing psychosocial risk and fostering psychological safety.

• Weighted performance criteria – ensuring that leadership behaviours and team outcomes are given real weight in promotion, bonus and partner-track decisions.

• Regular check-ins and feedback – using structured conversations to discuss psychosocial risk, workload, team culture and leadership conduct, not just financial performance.

• Consequences for poor conduct – making it clear that repeated failure to meet leadership standards, including in relation to psychosocial risk, will affect progression and rewards.

This approach aligns with the broader legal and regulatory context. By late 2025, all Australian jurisdictions had introduced or were operating within WHS frameworks that recognise psychosocial risks and impose duties to manage those risks, and the best organisations are moving beyond compliance to embed psychosocial safety into leadership expectations.

A practical path forward

For the Australian legal profession, the path forward is clear. Firms must:

• recognise that psychosocial hazards are leadership-shaped and that leaders are accountable for them under WHS law.

• treat psychosocial risk as a core governance issue, not a soft wellbeing add-on.

• design performance reviews that measure both results and how results are achieved, including leadership behaviours and team psychosocial outcomes.

• use data to support improvement, not to shame leaders, and to create a shared reality about performance and culture.

Leadership accountability for psychosocial risk is not about eliminating every risk. It is about demonstrating a consistent commitment to identifying, managing and reducing foreseeable risks. It is about consistency, transparency and a willingness to measure what matters. In the Australian legal profession, where integrity and professionalism are central to the business model, that is not optional. It is a professional and legal necessity.

References

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