Traditionalists v modernists: business dilemma for law firms
Last week, Chris Roebuck, in his interesting blog post on making change happen, stated that ‘legal firms face probably their toughest challenges for years’.
In previous posts, Alastair Moyes and I also advocated that the legal industry needs to embrace radical change ('Time for solicitors to reinvent their customer services’ ) and (‘The end of lawyers? Pah!’ ).
You’re probably thinking we’re all stating the blindingly obvious. I agree. But I’d like to run with this a little while longer...
In the past few weeks, I have been liaising and collaborating with prospective clients and colleagues. It’s patently obvious to me that we’re all still suffering in the long tail of the recession, and there’s a sense of urgency required to bring about positive change.
The experience has also reinforced my belief that one of the biggest challenges facing partners in established law firms is the conflict between ‘traditional’ lawyers and ‘entrepreneurial’ lawyers in finding agreement and buy-in on the way forward – that is to say, what ‘change’, where?, when?, why? and how?
I liken the transition and turmoil occurring right now in the legal world to an analogy used by Pierce Brosnan in the movie Dante’s Peak. Brosnan plays a volcanologist who is desperate to convince his colleagues that a town is in danger from a volcano about to erupt. He and his colleagues have been stationed there and tracking activity.
What Brosnan says is: If you put a frog in boiling water it will jump right out (frog 1). But if you place a frog in a pan of cold water and heat the water gently over time, it will just sit there until it eventually boils to death (frog 2).
His message is simply this: ‘If we’d arrived here today we’d know we were in trouble’.
If you’ve been in the legal industry for some time, and are more of a ‘traditionalist’, you’re probably like frog 2. But from if you’re an outsider looking in, that is a non-lawyer, or if you’re an entrepreneurial lawyer, you’re like frog 1.
Either way, the legal industry is pretty much like a box of frogs at this very moment. It’s a mix of frog type 1 and frog type 2, hopping around and not quite sure which way to jump in what one might describe as a ‘Luddite v Evangelist’ face-off.
Interesting times...
If we keep doing the same things we’ve always done (traditional stuff) and it’s not getting results - and yet the rebel (entrepreneurial lawyer) is doing things differently (innovative stuff) and it’s working - then why aren’t we buying into doing more of the latter?
Wanting things to improve but resisting the opportunity to change reminds me of a Chinese proverb: ‘Insanity is doing the same thing in the same way and expecting a different outcome.’
So, how do we deal with change when different factions are at war? And what’s the solution?
Well, there are two ways to pass a hurdle: leaping over or ploughing through. There needs to be a ‘monster truck’ option. (Jeph Jacques - web comic).
Seriously, perhaps the answer lies within the writing, experience, wisdom and success stories of change masters and entrepreneurs past and present, the likes of Chris Roebuck; Rosabeth Moss Kanter in her book The Change Masters: Corporate Entrepreneurs At Work; Tom Peters’ Thriving On Chaos; Collins & Porras’ Built To Last and Good To Great; Peters & Waterman’s In Search Of Excellence; Seth Godin’s Meatball Sundae; Chip Conley’s The Rebel Rules: Daring To be Yourself In Business; and John Kotter as far back as 1995 in Harvard Business Review (March - April edition) Leading Change.
Kotter (in 1995 Konosuke Matsushita professor of leadership at the Harvard Business School in Boston) stated that the most successful change efforts begin when some individuals or groups start to look really hard at the firm’s financial performance, competitive situation, market position and technological trends.
For example, the individual or group will focus on the five-year trend in declining margins in a core business, or an emerging market that everyone seems to be ignoring (I’ll pick up on this in another blog post). Fundamentally, they then (I quote) ‘find ways to communicate this information broadly and dramatically’. Kind of nothing short of ‘wakey-wakey’ colleagues!
It’s worth noting that Chip Conley, ‘boy wonder’ of the American travel industry - founder and owner of Joie de Vivre Hospitality - reveals that the secret of his success lies in the primary traits of vision, passion, instinct and agility, combined with engaging employees and colleagues and encouraging them to break the rules. Break with tradition perhaps?
Kotter proffers eight change steps, all of which I cannot possibly cover in depth but perhaps I will return to in due course.
The first step is to establish a sense of urgency - to examine market and competitive realities, identify and discuss crises, potential crises or major opportunities.
The second step is to form a powerful guiding coalition - assembling a group with enough power to lead the change effort in encouraging the group to work together as a team.
And herein is the hard-hitting lesson from the successful change masters...
It’s a time to make peace in the board room (let bygones be bygones), find ways in which the traditional lawyers and entrepreneurial lawyers are similar, instead of the ways in which we are different, and then embrace those differences to achieve a positive outcome.
It’s understandable that to change may well be difficult, but not to change could well be fatal.
One thing’s for sure. We can’t just sit here, procrastinate or continue squabbling any longer. I don’t want to boil to death. Do you?
Chrissie Lightfoot is author of The Naked Lawyer eBook - a blueprint in how to get more sales.
http://entrepreneurlawyer.co.uk/products-services/ebook
Comments
This made me smile
I'm glad to see I'm not the only one here who reads Jeph Jacques. I believe the "frog boiling" analogy is apocryphal though: it's a nice story, but unlike humans, frogs aren't that stupid.
Keep smiling
LOL!!!!!! Well said :-) Thanks for your comment Chris...
I shall use this at the next meeting
A good and useful way to put it so that the traditionalists may actually sit up and listen.
I shall use this at the next meeting. Circulating it to everyone first of course. (20 partner firm)
As an aside, I recently heard a legal partner when asked about the marketing budget reply that... "We are a law firm, not a business!" This "holier than thou" and "clients will do what we tell them" attitude is the traditional lawyer.
I learned yesterday that a "traditional" sole-practitioner or 2/3 man firm with offices, cashier and secretary overheads earns, on average, less than £30k a year for themselves. The two most entrepreneurial lawyers that I know, using cloud computing, no office, visiting clients, outsourcing typing and accounting etc have been paying themselves £10k per month since they started. Is that enough of a wake-up call for anyone?
Well said.......
You know, without people like you Chrissie who are always looking for ways to break through the barriers, industry and commerce would be a very boring place................................
I think Kotter makes it sound too easy.
I suggest change begins with individual dissatisfaction. It gains momentum if there is a compelling problem which those affected can relate to and rally around. Easy enough to see the connection with Kotter's 'sense of urgency'.
However, I don't completely see eye to eye with Kotter on this as he implies that 'management' can, by virtue of good analysis and clear communication of the result cause the scales to fall from peoples eyes and they will as a result 'get on board the bus'. In my experience, unless the situation is truly dire, there will always be groups who don't accept what they are being told. Rarely will an entire organisation agree on reasons for change as the different stakeholder groups will view the situation with different lenses. One person's compelling problem is another's item of trivia.
Influential people (usually experienced middle managers) tend to assess a proposed change in terms of what they are likely to lose and act accordingly. So although the intention of creating a sense of urgency about the need to change is good, it can be incredibly difficult to achieve whereas those who would protect the status quo have very little convincing to do and are free to try and derail an initiative covertly. And that is how you end up with a box of frogs.
Even if you can get a critical mass of people aligned around the need for change, getting them to agree on what to change to can be equally difficult. I have observed a great deal of distrust of senior managers because 'if they had been doing their job, we wouldn't be in this position' and that distrust is often articulated as 'how do we know you have got it right this time'.
In the West, our organisations are predominantly hierarchical and change tends to be imposed top down - yet 70% of initiatives fail to achieve the results they promised at the start. There are other more effective approaches, to do with mobilising the workforce to define the problem and design the solution, but that requires those in charge to relinquish control and that is not something we are good at.
Luddite Litigators Society First Annual Paper Tiger Award
Interesting article, thought I'd croak up and provide a link to the Luddite Litigators Society First Annual Paper Tiger Worst Practices Award at http://bit.ly/LudditeLitigators.
One of the reasons law firms don't change is they're making so much money doing things inefficiently, at least in the short run. Take electronic evidence. By using reasonably proven technology and processes, firms can cut review costs -- typically the largest share of producing electronic evidence -- by 90% but they often resist employing them. An article co-authored by Jeff Carr, VP & GC of FMC Technologies claims that a managing partner is impacted by $35,000 out of every $100,000 billed the client by the firm. That managing partner may be sacrificing short term revenue by making things more efficient. See http://www.hgexperts.com/article.asp?id=7551. That combined with a downturn in the amount of legal work and the result is perhaps predictable: firm first, client second.
Of course in the long term clients become more sophisticated and realize how they've been treated and in the long term hopefully those firms that have been doing the best, i.e. most cost-effective, work will get most of the work.
Change in the Legal Sector
I am a consultant who started their practice in 1990, offering a range of services aimed at the management of change. It has been a bumpy ride over the last 20 years but with the benefit of hindsight there have been enormous changes in the profession during that time.
Shortly after establishing the business, we had the 1991 recession which, in its way, was every bit as severe as the one we are experiencing now having come right after Big Bang in the City in 1988. That recession produced a number of national (later international firms) who had to re-engineer their businesses. The same experience will be repeated this time too.
The profession is a very different place from that which existed in 1990 both in terms of scope and scale. We forget how much progress has been achieved in producing suitably managed firms even those with non City revenues. IT, new working practices and thinking has been adopted either out of necessity or through the vision of the partners.
However, this is not enough. You only have to look at the impact that 'virtual' firms have to understand that the profession has to change to synchronise with a changed market place whether consumer or corporate. There are too many tactical solutions being thrown at what are strategic problems.
The problem, of course, is organisational inertia. If you are going to set up a law firm now, you would not follow the predominant business model that is being followed now.
Sometimes having a long memory can be beneficial as history has a habit of repeating itself.
Are lawyers pepared to actively seek work?
As a professional in the area of Sales training, Motivation and confidence. I often get asked to work as a sales advisor or as a 'locum sales force' for clients. The reason I get asked to work in that role is the client quite often does not have time to learn the skills necessary to successfully execute that position.
However, sometimes I meet with clients who dont want to sell because they deem it beneath them! Somehow clients are supposed to fall at their feet begging them for their services. These people tend to be sat in nice offices staring at the phone waiting for it to ring.
Demand is low. If you want to succeed you have to take action, and action is not setting up committees. Action is actively finding customers. The main way of achieving that is finding out what the market wants and tailoring your service to provide for that market. Ask your customers what they really want from you. The answer isnt always price related.
Those who take action now will grow. Those who dont will go the way of the Dinosaur. Effectively training and motivating your staff to sieze opprtunities rather than whatch them drift by waiting to be asked is the way forward.
Action! Not Committees!
Change cannot stop mortality
I like the frog analogy but the slow boiling has been going on since the early 1980s. The heat will go up next year with ABSs.
It is an illusiion to imagine that change can always get you out of a difficult situation. An illusion born of our previous privileged position, both as a nation and a profession. Death is the ultimate denier of your philosophy but extinction does occur and solicitors are not immune.
What might help is a practical guide to how to deal with our problems, rather than endless philosophising about theory. Perhaps we have to pay more than your Gazette fee for this or perhaps non -practitioners just don't have the answers.
You might reflect on the fact that the age of the consultant may be over.
Luddites v. Modernists
I'd add a small comment: the luddite v. modernist confrontation isn't always as simple as a single report or a single blog post can imply.
What follows is an amplification of your exhortation to "embrace the differences"
One of the more common things one discovers when consulting on change management in businesses isn't that it's a case of "some who are entrenched and want no change", versus "those who want change." - it's more often a case of both sides failing to agree on what the fundamental business problems actually are, which makes it difficult verging on impossible to agree on which changes are required, and which levers to apply to create those changes.
The more argument there is about what the core problems are, the more entrenched each side becomes.
When both sides are arguing about the problems [and about which problems are fundamental] they're failing to discuss and find means to reach goals. Instead of focussing on those problems, it's often quicker, more effective, and cheaper to get both sides talking about goals - isolate one or two common goals across the entire organisation and then focus on how to get there in the best, fastest, cheapest and most effective manner.
Embracing and enabling change in this way may not remove or resolve all, or even any, of the problems, but the processes of working together to make those common goals happen inevitably draws both sides closer together again and reenergises the company - and makes it easier to revist the problem arena with new less biased eyes.
The right advice -- but who's actually listening
An excellent article and you have nailed one of the factors that's holding most law firms back. The sad thing is to an extent, you're preaching to the converted. The fact that we all bothering to read your blog in the 1st place implies that we all aware of the need to run our practices as a business and are open to social media. Sadly 99% of all colleagues don't share our forward thinking approach -- they're the ones who risk dragging themselves and their colleagues to extinction.
1% can BE the difference
Hi 'IP Lawyer'. Thanks for getting involved.
As all of us lawyers and non-lawyers are aware in business 1% can make all the difference... if only we are bold enough. And there is always margin for conversion and uplift. Plus, there is of course the next generation of lawyers, the new wave, the generation 'Z'. They're listening and watching.
When change is in the offing it usually takes a great leader (the 1%), but it's the first follower that actually truly brings on the wave of change because it's (s)he who encourages the next follower(s) to follow suit (the 1%+). Once those that aren't so confident or are doubting see that colleagues are getting on board with the 'new way' they are more likely to buy-in to the concept and action accordingly.
Outsource the future
I've got a great idea to share with you Chrissie. Lets change the way our firms work and outsource all the work to SA or Eastern Europe. That way I get to keep all the profit and all the "super lawyers" get sacked. LOL Never mind. There seems to be a future in writing about change, so they will be OK.
The Last Frog Standing
Chrissie:
Your Vol 1 essay is refreshing and witty as are your comments presented here.
From my perspective, having served as Chief Administrative Officer/Executive Director (non-lawyer) in two law firms and as VP Finance and Administration in a mult-national professional services firm, your observations are 100% on point.
The traditional law firm business model (at least the American version) is broken and badily so. We have known this for some time but cultural change is never easy. Traditional has a level of comfort. It's level of risk is great
Yesterday's cry to "just bill more hours" or "raise the billing rate" or "cut staff" simply does not work in today's environment. Perhaps it never worked save at a reductive level.
Not understanding that survival is all about service, relationship building, and meaningful communication as perceived by the client will prove fatal. Law is indeed a profession not simply a business but all professions have at one time or another accepted change and embraced experimentation in order to move forward---medicine was not always evidenced based.
Progress comes from a willingness to accept uncertainty about an outcome. Is it not better, in a business decision setting, to be approximately right vs perfectly wrong?
Your work is indeed a must read and the points solid . I look forward to following your posts and the responses of your readers
Cordially,
Richard M Doherty
Frogs
Well, if you think it's bad with solicitors you might want to consider (ok, don't) the problema that the Bar are facing. The Luddite layer isn't very far below the surface in most chambers and, where there is entrepreneurial spirit (and there is), the traditionalists manage to quench it. However, the half dozen or so well-managed chambers with far-sighted members will scoop the pool by following all the basic principles and good management/marketing sense in previous comments.
Although, when clear-thinking is required I prefer to recall my mother's (farmer's daughter/farmer's wife) sagacity - 'there's more ways of killing a pig than f*****g it to death'.
I commend it to the House.
Be Your Own Change Consultant
I've got a series of questions to ask of your law firm.
It helps you realise where there are opportunities.
Feel free to ask for it.
Answer the questions and then go for the changes.
It's a practical start.
People like change. They just don't like to be changed.
Pursuing your Passion
Another blisteringly inspirational article from Chrissie.
The unspoken but overwhelming feature of all her blogs is passion; she's passionate about her work, passionate abut embracing change and passionate about bringing those changes to the profession.
I sense a lot of frustration in these comments, especially by those being restricted by their firms.
Passion is what's going to sort out the goats from the sheep in the modern legal world. Imagine being like Chrissie and embodying passion in your work. Personal fulfilment and financial success in business and work happens when passion and profit converge.
Frogs are not the only amphibians
I like your stuff Chrissie.
The 1% are dangling out there in the wind. Your right that those who follow the 1% will make the difference but the mavericks/trail blazers (I am one) usually get burnt. What the heck I like playing with fire and anyway it beats boiling to death with the toads.
However, those poor frogs are sat in the same pond as the newts. Newts type 1 and type 2. I like type 1 newts as clients because they jump with me. Sadly there are very many more type 2 newts than there are type 1 newts. That’s one dilemma for the type 1 frog. Another dilemma is that the newts are largely stupid creatures and hate the frogs whatever their type. The newts don't give a toss about the infighting between the type 1 and type 2 frogs.
Business
This is a great business advice article. It covers all the aspects, I am thinking to relocate my business soon using a professional company and seeking new challenges for better success.
Thanks and Regards/-
Jason Webb