The writing’s on the wall #3 – resistance to change

11 12 2014

IMG_4954.JPGThere is no shortage of commentary about the need for law firms to change in what is the most significant transition in the profession in a lifetime. Theories from Darwin to Kotter are cited yet firms still struggle with the day to day reality of change.

Partners speak of their frustration that things don’t move fast enough and clients are increasingly outspoken about the growing gap between their expectations and the service delivery they receive.

So for your firm, what’s at the heart of the resistance to change, and critically what can you do to address it?





Lawyers – Just. Do. Something.

30 08 2011

It seems like there was some sort of psychic alignment in the UK legal blogging community last week.

James took a break from his corporate finance practice and went down to the firm's somewhat impressive atrium to think about what was happening in his market

As the news came rolling in on changes facing the UK market (Neil Rose’s site Legal Futures is often a good place to start), the Entrepreneur Lawyer   Chrissie Lightfoot wrote a great post about the disruption and fear facing the profession. Julian Summerhayes then followed up with a thought provoking piece on the need to avoid apathy in client relationships.

All the time my mind was whirring with two related themes – massive change, and the need to do something.

The first message that I really (really) want to get across is that change in the profession is happening NOW. I mean right now.

Many of the lawyers who are waiting for the full implementation of the Legal Services Act with a “let’s just wait and see” attitude are either deliberately burying their heads in the sand, or are sleepwalking through a time of significant change, leading to both opportunities and threats.

Just look at the recent headlines:

Take a step back and take a fresh look.

This is change that’s happening right now.

It’s not round the corner.

It’s not things that might happen.

It’s happening.

Now.

The other point that’s really important to grasp, is that the change is affecting the whole profession. It’s not just a B2C issue, there is fundamental change going on all through the profession. From the sole practitioner whose livelihood is threatened by consumers being offered quicker, cheaper and easier solutions from competitors that didn’t exist three years ago, to the multi-million pound law firm facing disaggregation of the large scale projects that used to be the foundation of the partner’s seven figure salary. The change is real and far-reaching.

Finally, please trust me when I say that there is much, much more going on which is not public at the moment.

Since I left practice as a lawyer, I’ve been fortunate to be involved in the profession in a number of different roles, including consultant and LPO provider. Some of the conversations I’ve had with law firms, in-house teams and other consultants have shown me that there is some really forward thinking going on in the background, leading to business models being re-engineered and investment being secured.

So why are so many firms not doing anything?

Well, putting aside the difficulty many law firms have with change generally (which I’ve written about before), and some of the negative behaviours driven by the hourly rate billing model,  I think there are a number of other reasons why it’s not top of mind for every law firm partner.

The first is that there are more pressing short term challenges. Cash flow being one of them. The last two to three years (depending on the make up of your practice) has been incredibly tough, and amidst the restructurings and insolvencies, there are plenty of firms that quietly weathered the initial storm but  are finding things getting harder and harder as the road out of recession continues to be a slow one. Whether it’s cash flow, refinancing or opportunities for consolidation, short term survival is often the top priority.

Another reason is that it’s just plain difficult. The market is moving at a tremendous rate now, with new competitors, new technology and regulatory change coming in waves. Just keeping on track of the environment is tough enough, let alone analysing it and working out how to respond. Many firms don’t have strategy experience in-house (and there was a great article this week on how forcing strategy work on non-strategic thinkers doesn’t often work out) and I suspect many just don’t know where to start.

But whatever the reason, now is the time to act. The speed of business these days is too fast to wait and see.

Much has been written about the change in the product development world and the speed to market imperative (“fail fast”) – how it’s no longer realistic to test extensively to get a product perfect before launching.

The parallel I’d draw here is that now is not the time to assess the market to nth degree, and then craft a perfect strategy over the coming months, before pulling together a detailed project plan and implementing through the annual budget cycle. All of these steps may well have merit, but given how fast the market is moving, it’s more than likely that by the time you’re done, you’ll be too late. The opportunities (of which I believe there are many) will have passed, or the threats manifested.

So to wrap up, now’s the time to act. Block out an afternoon and at least do some thinking, or if you’re not at the thinking stage, some sensing to find out what’s happening in your market segments. Then take the lead and turn thinking and dialogue into action.





Law firms and the death ground?

10 10 2010

No, not a commentary on carnage wreaked by the credit crunch, but another return to the world of warfare for some thoughts on law firm change.

 

The senior partner took staff discipline very seriously

 

In my last post I mentioned Robert Greene’s excellent book “The 33 Strategies of War”, and was particularly interested in the section on creating a sense of urgency; a phrase which rears its head in many aspects of business life.

In sales and product development, a frequently asked question is “what’s the client’s burning platform?”, meaning why does the client need to solve this problem NOW? In many cases, as I’ve written previously (http://tinyurl.com/2uq8oh6)  the lawyer is in the enviable position of solving an urgent and unavoidable problem – defending big ticket litigation for example. In other cases the client’s need is less pressing (for example the need for a data protection audit) and presents law firms with a sales challenge.

Another area the urgency question arises, and this is where I want to pause for a second, is in creating change. The majority of models I have seen for creating change in an organisation start with the need to create a shared sense of urgency (see the work of Kotter for example; in fact “a sense of urgency” is the title of one of his more recent books).

What interests me, is Greene’s assertion that “the world is ruled by necessity: people change their behaviour only if they have to”. He quotes from Sun-tzu in the Art of War, explaining that the famous Chinese strategist advocated creating a “death ground”: a place where the army was penned in and forced to fight as there is no escape route. Faced with death being “viscerally present” (great phrase!) the army would fight with double or triple the spirit and as a result be many times more effective.

The challenge is of course that in all but the harshest City firms (*joke*), death is fairly unlikely for the average Western lawyer, yet in all seriousness there will undoubtedly be some firms and some careers that will end over the coming months as the profession evolves in rapid and dramatic ways.

Readers of this blog are no strangers to my view of the forces changing the market place: globalisation, deregulation, commoditisation and increasing automation, more sophisticated buying behaviours, changing employee priorities and expectations…. the list goes on. These drivers will see firms out of business, industry consolidation, career doors close (and others open of course), yet many, many firms remain slow to change despite the fact that a large proportion of partners both see how different the business landscape is now, even when compared to five years ago.

While I’ve examined some of the barriers to law firm change before, Greene suggests a number of practical strategies to help leaders operate from the “psychological death ground”. I’ve pulled out the main ones below, along with some thoughts on their application to  the profession:

Stake everything on a single throw: given a low tolerance for risk, how many law firms make the bold strategic move? Don’t get me wrong, some do and succeed, some do and fail, but many, many more don’t put their eggs in four or five baskets, let alone a single one!

Enter new waters: with a whole host of new competitors about to enter the legal market place (certainly in the UK as early as next year), how many law firms are themselves thinking of entering new markets? Clearly expansion can be difficult in tough economic times, but entering new waters doesn’t have to mean serious capital expense (like opening an office in another geography) – web based services, strategic partnerships, innovative use of technology can all take a firm to new places without blowing the budget.

Make it “you against the world”: read last week’s post about knowing your enemies. How would your team behave if a key client told you that at the end of the year it would only instruct one law firm (out of you and your closest rival)? How would that shape your behaviour now?

Keep yourself restless and unsatisfied: perhaps with margins falling and cash flows looking more challenging, after a period of unprecedented growth, this might be enough to prompt action now. If not, ask yourself what you would do if partner drawings were scheduled to be halved this financial year (in the current environment, they may well be)? How could you and the team or firm survive? What could you do to fight back?

At the end of the day, I think the disconnect between Greene’s theory and reality is the difficulty translating thought into action. If these scenarios were reality, then people and organisations would act and would act quickly. The challenge for the profession, is where death is not yet quite so visceral, can we change quickly enough?





A law firm’s immune system

12 07 2010

In his book “Your Next Move” (which is excellent by the way) Michael Watkins introduces the concept of the corporate immune system. The idea is that organisations develop unspoken systems to protect their culture when threatened by a “foreign body” inside them. This is examined in the context of a new person joining the company, and exhibiting behaviours that are so different to the way things are typically done; these are unconsciously seen as a threat and the company responds accordingly. However, it wasn’t the recruitment of lawyers that got me thinking about the implications of this, but instead what it meant for an organisation’s ability to change.

Wasn't the partnership immune system supposed to stop this?

In my experience, many of the larger law firms put a strong emphasis on cultural fit with their recruitment, reducing the need for this corporate (or partnership) immune response (as they are less likely to recruit people likely to exhibit very different behaviour than that found in the firm). Given that the majority of lawyers will come from other law firms that will be fairly well known to the recruiting firm, the chances of any radically different behaviour from the new recruit are reduced further.

What though, does this mean for a law firm’s ability to change? If it is recruiting like-minded people, has been in existence for a very long time (as most firms have) and developed a strong culture, has a consensual decision making process, and is populated with people drawn to a conservative, risk-averse profession? Now of course I’m making some generalisations here, but in my experience managing change is an area many firms really struggle with; and there is no shame in that. Managing change is messy, difficult and time consuming, and this is true whether you are a law firm, large corporation or public sector body. It’s tough because it’s fundamentally about people, and this means that the process can’t be neatly packaged up and done as a “paint by numbers”.

However, the factors at the start of the previous paragraph conspire to make it more difficult still for law firms. Combine that with the fact lawyers are often independent thinkers, with a propensity to challenge and question, and the organisational capacity to change falls further. If, on top of this, the firm recruits in its own image, where will the change come from? Who will challenge the status quo?

I believe this issue needs addressing, and addressing quickly. Lawyers are facing massive changes in their profession, coming from a number of different drivers from deregulation to globalisation to technology. The ability of a firm to change will, be a significant factor in their ability not just to win in their marketplace but to survive.

Getting in external change support can certainly help, but I believe these are skills that law firms do and will need in-house, and not just in token numbers. Another idea, is helping all employees (and I include partners in this context) becoming more change adaptive. When in-house, my employer put all director-level employees and above through a change agility programme called “The New Reality”. Reaction to this varied (I loved it: my favourite quote “today is the slowest life will be. It will only get faster”), but one thing it did do was create a common vocabulary and baseline understanding that certainly helped with future changes.

Change is coming. The incremental change (while it might not have felt like that!) of the last decade may not be enough in future. What can you do to adapt and facilitate change in your organisation?





The rise of the undead lawyer

7 04 2010

One thing that has intrigued me over the last twelve months is the number of former lawyers who’ve ended up in really interesting, non-traditional roles in private practice. It’s not easy to pigeon-hole the type of role into any particular category: business development? knowledge management? talent development? strategic support? The roles span all of these and more. What interests me is that often the development of these roles has been very much unplanned, and often the career path that has led people to them has been serendipitous rather than clinically planned.

Beware the undead lawyer

The professionalising of law firm management has been evident for sometime now, and is likely to step up a gear over the coming months as the profession feels the effects of the Legal Services Act 2007. However, that focus on the top echelons of senior management (CEOs, COOs and CIOs etc) is not really what I’m exploring here. This new breed of business support personnel usually play at a level below the board (although may well serve on some type of management committee), but nonetheless, are quietly influential. Often leading the types of initiatives that make a real difference within firms, shaping and managing change is clearly an important skill set.

What’s also apparent, in my entirely unscientific investigation (talking to these people!) is that they not only enjoy their new roles, but find them fulfilling and generally see themselves as continuing down that path for the foreseeable future.  Their background as lawyers gives them a unique understanding of their firms and the partnership culture, which further enhances their ability to make change stick.

It will be interesting to see how these roles develop; whether common characteristics emerge, whether more lawyers look to make the jump into this type of role,  whether the roles offer a route into more traditional management, and whether law firms begin to look outside the firm for talent to fill these positions.

At the moment though, it’s clear that these twilight roles in the shadows of law firms will continue to be filled by undead lawyers; with new careers rising from the graves of professional practice. What’s stranger still is that most of these lawyer zombies are smiling!





The winds of change

17 11 2009

The legal profession has been changing for some time now. In the 12 years I’ve been working in and around it, many of the traditional trappings of the lawyer have been slowly and surely eroded. But in the UK, as deregulation really sweeps away some of the protection that has been preventing supply matching demand (and in the process allowing some firms to make really healthy margins), things really are changing.

Can you feel the breeze?

What’s made me think about this recently, has the number of unrelated signals that are telling in their own right. I have lunch with an ex-lawyer from one of my former firms who is working on a pricing project for a law firm. I contact a partner at one of my former external law firms, only to find she has now set up her own business because she felt the law firm model no longer let her serve the clients in the way they needed. I had an interesting conversation with a BPO company about how the market for legal process outsourcing is really changing, with firms recognising that they need to look for a competitive advantage. Law firm business plans are full of talk of globalisation, commoditisation and differentiation. The change is real. The change is now.

So the winds are blowing, but change is not easy, particularly in a profession that can be introspective. However, don’t write the lawyers off. Now that the change is real, there are plenty of entrepreneurial firms out there that can find opportunity in change. Others may struggle, but for the adaptive ones, in touch with the markets, healthy margins are still to be had, they are just likely to be found in different ways and with different business models.





Strategy as a thought?

11 11 2009

In the increasingly fast paced world we live in, it seems more and more difficult to make plans for the future. There are all sorts of ways of thinking about strategy; what it is, how it’s formed, and what it does (a favourite book of mine is Strategy Safari by Mintzberg), but a common view is that it’s a game plan. A way to compete and win.

The problem, as I see it, is that these days, game plans need to change, and change fast. Clients change, their needs change, competitors change, technology changes, everything changes. Yesterday’s plans can hinder not help. Yet at the same time, if an organisation changes its strategy in real-time, will it lose its identity? Cause confusion?  Allocate resources effectively?

There’s no single answer for this; every business needs to develop and adapt a model that works for their circumstances. What I do believe, is that those companies that go through a charade of an annual strategy process, and spend months working on long term plans with the intent of sticking rigidly to them over the coming years, face more and more challenges from agile, more relevant competition.

Often with these sorts of annual processes, the market information used is far removed from the market by the time it gets to the strategic decision makers; it is distilled, analysed and sanitised before it is used (not to mention often months out of date and/or originally prepared for a different purpose). Competitive information is often paper thin and much of it speculative. Thinking about the future is often incremental and conservative, constrained by the process itself. The process itself often takes weeks (if not months); how can this be right for today’s marketplace?

Thinking time; strategic and practical?

One school of thought might be to say that strategy of this type is simply not relevant any more, but I think that’s over simplistic. Somebody (everybody?) needs to be thinking about how to win (or how to collaborate?). The underlying principles of competition, industry analysis (Porter et al) remain valid and helpful frameworks; they just need adapting and using differently.

In a changing world, the way organisations think about strategy also needs to change, but in this period of transition it’s critical that organisations and people don’t stop thinking all together. Consider who is thinking, why they are thinking, and what they are thinking about. But don’t stop thinking (or doing, but that’s another post).

 

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Strategy without creativity