Law Firms: Change or die

Too extreme? I don’t think so. If firms stay stuck then not only do they limit their growth and everyone within the firm but they leave the business exposed to a slow death.

Before considering what can be done to bring about seismic (profitable) change,  and garner an entrepreneurial perspective, it is helpful to consider some of the reasons that are still in play in limiting change.

The historical perspective weighs heavily on law firms. They expanded in an era where change wasn’t a necessary constituent to the running of a profitable firm.

The cycle of individual growth and development (articled clerk, solicitor and partner), more or less, made sure that the firm was sustainable. In the early years there was a need to introduce capital for growth and it was expected that everyone who qualified with the firm would go on to become a partner. There certainly wouldn’t have been committees set up to determine promotion or 360 degree appraisals as part of that process.¬†Location wasn’t that key. Neither was branding or specialism.

As to competition, that existed but there were enough clients to go round so that it didn’t matter to the same degree as it does now. Of course many more firms had the benefit of legal aid and that no doubt kept quite a few of them from being exposed to the glaring light of competition.

In short, when it came to change there wasn’t a need to see it happen.

But of course the landscape now looks different, and there will be a paradigm shift later in the year when the full force of the Legal Services Act becomes a reality.

Firms will no doubt be watching and waiting but the smart ones will already have worked out how they need to develop, change and inculcate an entrepreneurial perspective.

They will have worked out that it is no longer good enough to work in the business – doing fee earner work – but they need to go to work on the business.

It will be key for them to have a clear vision of how the firm will look in the next 3-5 years and effect change within the firm to mirror what a firm of that type would be doing every day.

But what about the rest of the cohort – either the ones who are adopting the tactic of wait and see or those who know that they have to change but don’t know how (or perhaps the veil is so tightly drawn that they haven’t worked out a strategy to raise it).

Option 1

Dissolve the firm, sell it or break it up into its constituent parts.

ITT have recently gone down the break up route and it is a surprise that, with all the fundamental problems that exist in a law firm in trying to offer so many practice areas, that there has not been more splinter firms being thrown off.

Ask yourself this question: Is it possible for the existing brand to carry all of the practice areas going forward? If not how will you address it?

Option 2

Change the management structure.

Most firms have gone for a committee of some type distinct from the equity or fixed share partners. Is it working? No, then why are you continuing with it?Either it doesn’t fulfill its purpose or the wrong people are on the wrong seats on the bus.

Option 3

Ask for help.

Accept that you don’t have all the answers. You will find if you look expertise available where other, gifted people have witnessed seismic change.This doesn’t mean wheeling out consultant after consultant. No you have to identify the problem – lack of cash, lack of commercialism, HR issues, too high a dependency on legal aid or too few good quality clients – and then find the right person. Make sure you select wisely.

Option 4

Stop making excuses. And stop putting up reasons why things can’t be done.

Accept that lawyers like to pull everything to pieces and are sceptical – that is in large measure what you are paid to do; but you need to inculcate a completely different mindset.

Option 5

Stop worrying what the competition is doing.

The competitive landscape changes all the time. You competitor tomorrow may be completely different from your competitor of today. It’s out of your control.

Option 6

Make small decisions.

Agree that if it is wrong you can easily change things rather than those massive lofty aims you have like being a top 50 law firm or one of the best employers in the area. Sure they are important but if you don’t reach that level you just end up looking stupid and losing face internally.

Option 7

Urgently promote all your best people.

If you have to change the labels to accomadate this then do so.

Option 8

Stand for something and believe it.

I have mentioned on a number of occasions the way in which Zappos have made their values the raison detre of their business. Go back and re-examine that vision statement which usually starts off saying:

“We put our clients first and aim to deliver the very best service at an affordable price.”

Do you believe that your vision statement stands for something? No then change it but not before you have consulted with all your staff on what they think.

This point is key. One of the biggest gripes in law firms is the fact that staff are disengaged and not motivated. Of course, you cannot expect to bring everyone along.

Option 10

Out train your competition.

Of course each firm will have its own issues, some long-standing and others that have only recently come to light. But whatever the scenario you have to treat everything about the firm’s development as urgent. Don’t be forced to make changes only when something bad happens or when you lose a client.

If you are not inspired to change then how can you expect your people to grasp the situation?

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