Tag Archives: Law firm

Law firms and the death ground?

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?

What’s your agenda?

My friend Ross, an in-house attorney in the U.S., is known for his personal crusade against unproductive meetings.

Derek's two hour meeting to discuss the colour pallete for the firm's new logo was not as popular as he had hoped

We’ve all been in them: the time-devouring, pointless meetings that swallow time and achieve little (if anything).

The book “Rework” by Fried and Hienemeier Hansson gives a great explanation of why there are so many meetings of this nature, arguing (quite persuasively) that meetings are inherently toxic for reasons that include:

– they cover a very small amount of information per minute

– they frequently drift off-topic and often have vague agendas

– to be productive they require preparation, which most people don’t have time to do properly

The authors also highlight the set-up time involved, which is to say getting to meetings, waiting for them to start, leaving meetings, and then getting ready to do “real work” is also another hidden time cost associated with meetings.

Now in my experience, law firms certainly have their fair share of unproductive meetings, and I absolutely agree with the criticisms in the book (which is definitely recommended) but I do think there are reasons why law firms suffer less than some other businesses from the plague of pointless meetings.

Perhaps it’s the culture of time recording meaning that lawyers are more aware of how they spend their time, but I do think that there are fewer of these meandering, aimless meetings than in a corporate environment.  Lawyers are also pretty good at setting agendas and sticking to them, which might be because they are trained to structure and run client meetings from a relatively early age or it might be simply the result of common personality traits in lawyers. Either way, if a meeting is wandering in a law firm, there’s a good chance there will be a fairly direct, strong character to pull things back on track.

Another angle to this is the need to expedite the flow of knowledge. As the ultimate knowledge workers, lawyers need to share experiences and information to build their individual and organisational intellectual capital. A quote sticks with me from a book I read a few years ago (I think the book was Working Knowledge, by Davenport, but couldn’t swear to it) that to maximise knowledge acquisition and transfer, a firm should “hire smart people and let them talk to each other”. Meetings may not be the best forum for this, but if the topic, agenda and participants are right, they can be an effective forum for learning.

This dialogue can be particularly important for those law firms that are rigidly structured, leaving their lawyers sitting in silos. I’ve seen this in firms of all shapes and sizes: from the five partner law firm where the personal injury team has no idea who the tax and trusts lawyers are acting for, to the large City firm with a corporate team preparing for a pitch for a FTSE100 energy company, not knowing that the partner who recently joined the real estate team spent ten years acting for them at her previous firm.

So, let me be clear, I’m not aimlessly waving the flag for meetings. Far from it. However, in law firms that still fall prey to the tyranny of the timesheet, a focussed, well-run meeting may well have some benefits that are proportionate to the time invested in the meeting.

The Great Commodity Debate

Fascinating debate over the last month on the Linkedin group “Leadership for Lawyers” on Mike Ames’ discussion “Is the law becoming a commodity, and if it is, what can be done about it?”.

If you can brand and differentiate salt, legal services should be easy, right?

One of the things that immediately struck me about the comment, was the implication that commoditisation was a bad thing, and something to be resisted. By contrast, my natural inclination is that there are certain areas of law that should be commoditised, but that the inefficiency of the law firm market and the business models of firms in the market that have prevented this happening extensively so far.

However, rather than look at the rights or wrongs of commoditisation, or indeed the future impact on the profession (which is where much of the Linkedin debate focuses) I thought I’d share my thoughts on what is driving this trend.

In understanding the roots of comoditisation, Delong, Gabarro and Rees in their great book “When Professionals Have To Lead” talk about the relentless commoditisation pattern facing professional service firms, and suggest that technology is a major driver of this trend.

Another author, Dawson in his book “Developing Knowledge-Based Client Relationships: The Future of Professional Servicesargues that the main causes are in professional convergence (i.e. the blurring of boundaries between the professions) and the “unbundling” of professional services. Unbundling  occurs where new competitors, rather than competing head-to-head with incumbent firms, select a very narrow section of services and offer very focused competition; to compete the incumbents have to unbundle their service offerings. I believe this driver will become increasingly prominent as a result of both the increased deregulation in the UK market place (leading to more new market entrants) and increasingly sophisticated LPO offerings that are beginning to reach the market.

In addition to these supply-side forces, I believe much of the drive towards commoditisation comes from the demand side of the market. In particular, as a law firm client I  frequently resisted paying for services by reference to a traditional “hourly rate” on the basis that the service was now a defined offering which had a clearly identifiable market price.

Buyers of legal services are undoubtedly getting smarter (whether commercially-savvy corporate counsel or in house teams working with procurement professionals) and the push for more fixed price work in turn drives law firms to put boundaries around their services (in order to control scope and risk). The recession has heightened these buyer behaviours, and as a consequence more and more services are being “productised” into individual and standardised products, which are easy to replicate and difficult to differentiate, which in turn means the market becomes price and cost driven.

So, that’s my take on some of the drivers. What it means for the profession (both opportunities and threats) are for another day, but if the comments on this post are as rich and well thought through as those on the Linkedin discussion, I’ll be a happy man.