Why is Change Difficult in a Law Firm?
Law firms are good at reporting: the typical law firm finance department spews financial data like a broken fire hydrant; the narrative that accompanies the client invoice is a model of what we did, how and why; even the marketing department is, at last, achieving some traction in getting client-facing lawyers to enter information into the CRM system.
Law firms are, however, not good at planning. The past is a stable country, auditable and precise. The future is an environment fraught with uncertainty and risk. If possible, risk is transferred to the client. At the very least it is mitigated. The law firm's own affairs consequently became an adjunct to the client work; a lawyer would rather focus on the task in hand, and trust that the firm’s future will be simple projection from the past.
For many years (until 2008?) this was a viable strategy, and one firm even proudly asserted that their strategy was simply “£ this year plus +15%”. This is no longer possible. Revenues are flat, profit per lawyer is under pressure, and clients are changing the way that law is consumed. Law firms therefore have to create strategies that require changed behaviour. The firm cannot do what it has always done, and expect to get the results it has always achieved.
This is now the problem. The firm knows the market is changing, and can see the train coming down the track. Well-read and well-educated partners understand the issues, and can weigh up the alternatives. The subsequent strategy is, however, often academically sound but fundamentally useless, because the firm cannot execute it. As Drucker famously observed “Culture eats strategy for breakfast”. If the culture – the way we do things round here – is inherently cautious, risk-averse and precedent-based there is no chance that a Damascene strategy is going to work regardless of the inherent logic of it.
In the book “Switch”, the authors observe that the conscious mind can be viewed as the rider on the elephant of the unconscious. A large change of direction requires consistent effort from the driver, and fatigue quickly sets in. Reversion to the norm ensues. Even in the face of crisis, the pattern is that partners revert to safe behaviours, rather than grasp the nettle. In a law firm under pressure the managing partner prefers to spend time with his clients, experienced partners focus on existing clients, not new ones, junior partners are content to work on the matter in hand and the firm edges towards irrelevance. It's not that they don't see the problem - it's just more reassuring to do something they are good at, even if it's the wrong thing.
To overcome this inertia, the strategy must therefore move from its lofty height to become a practical play-book. Just as a football coach establishes set-pieces and standard strategies to enable the individual players to know their roles, the law firm must do the spade work in turning high-level ideas into pragmatic actions and then monitor and encourage the results. So, for example, having a sector strategy may be a good thing, but “so what?” What should I do about it, a junior partner or a senior associate? The firm may want to hire a big-hitter into a particular discipline, but “So what?” What should I, a partner unencumbered by a management role, do to support the strategy? Those of us who spend the days immersed in management speak easily forget that, in the end, executed strategy all comes down to individual partner choice.
Scary, isn’t it?
Two books you may find helpful: