Things Will Be Okay

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Over the last few months, I’ve had dozens of conversations with law firm leaders and many of them are asking "How do you think this will all shake out? Have we reached an inflection point or tipping point for some irreversible change in law firm operations?" Most are just wondering what they should be doing to prepare for a future that will certainly be different. Some are even distressed and fearful.

I am a natural optimist and a realist at the same time. As I have thought and written about what is to come, I've reflected on the pace of change – a topic we've focused on in our Law Firms in Transition Survey since 2012. Most law firm leaders, then and now, believe that the pace of change is and will continue to be quite rapid. The events of 2020 surely prove that, and yet I firmly believe we will be able to adapt.

By way of example, law firms have done an exemplary job of transitioning in a big hurry to working from home, without any game plan or roadmap in place to guide them. Surveys of staff and lawyers that we have conducted for law firms this spring indicate that by and large people are “okay” with few exceptions. Law firms' highly effective transition to remote work shows that they are fully capable of adapting quickly and effectively to change when they really need to.

What firms are facing in 2020 is not a cataclysm. The Coronavirus crisis has placed a new focus on attitudes to working from home along with the related ramifications on hiring, training, travel and office configurations.  In other areas – like technology adoption, efficiency efforts, profitability tactics, along with other operational issues around the law firm business model – the current crisis is an accelerator of trends that are already on most firms' radar screens. Now these issues must be reexamined by firm leadership teams.

In my decades-long study of superior leaders, one book that has always stood out is The Leadership Challenge by James M. Kouzes and Barry Z. Posner. The authors base their conclusions on clear, longitudinal research regarding what traits people most admire in leaders. The top four characteristics that have emerged from every survey iteration are: Honest, Forward-looking, Inspiring and Competent. Of those, I think the two qualities that are most needed to meet this moment are being forward-looking and inspiring in order to develop strategies for adaptation to 2020 realities. As Darwin famously said, “It is not the strongest that survive but the most adaptable.”

So, what might this look like? First leadership has to recognize clear new realities and opportunities. If in fact law firm workforces feel comfortable working from home (and many are commenting that they are as productive or even more so) then leaders should embrace new adaptable thinking and not necessarily advocate returns to the old ways.

Certainly, things have changed with respect to recruitment of young lawyers and laterals. Some new techniques such as interviewing with video technology seems to be working and are preferred by many law graduates. Think of the costs and travel time that can be saved. Leaders might well try to inspire that kind of adaptability in other areas.

In the 2020 Law Firms in Transition Survey, we asked firm leaders what they were doing to lead change in their law firms. Their three top responses, each being pursued in at least three-quarters of all firms, were putting forward-looking leaders in key leadership roles, creating a culture of collaboration at all firm levels, and actively soliciting ideas for process and service improvements. Evaluate what you and your leadership team are doing against these benchmarks and consider deploying some new leadership strategies.

What should you do now?

 
Focus first on optimizing financial performance – Ensuring the firm is on the most solid financial footing possible is job one for any leader and doing so will boost confidence throughout the firm. Pre-crisis, we routinely worked with law firms to implement profitability improvement strategies, but in the current environment these have risen to an entirely new level of urgency. We know from experience and research that the most effective ways to improve profitability are to reduce the number of underperforming lawyers, reduce office space and renegotiate leases, reduce staff, and shift some legal work to contract lawyers and paraprofessionals. Although traditionally many lawyers have raised objections to these moves, most now may be convinced that professionals can work from home, be productive and cost less to support.

Solicit suggestions and listen to feedback – Ask everyone “How are we doing?” Law firms leaned heavily on staff members to enable the transition to working from home and received many valuable suggestions on how to make it work. Work to develop a clear understanding of things that have gone right since the crisis began and identify those tactics that should be continued or accelerated. Continue to ask for recommendations especially on efficiency of service delivery and internal systems and procedures.

Find more opportunities for collaboration – For example, determine whether or not your current technology capabilities encourage easy collaboration among professionals. Many technology platforms have significant collaboration capabilities, but are often not used because of the lack of training.

Inspire an increased pace of change – When it comes to adaptation, you can be a laggard waiting until everything works perfectly, move along with the herd, be a fast follower of innovators as soon as there is proof of concept, or you can be one of the innovators willing to take risks. I have argued for years that it’s not necessarily a specific innovation that results in differentiation, but the pace at which a firm can implement change. I still believe that is absolutely true and through inspiration leaders can make it happen. Ask yourself what you can do to help your firm pick up the pace.

Assure the troops – Many lawyers and staff in your firm will naturally be worried about the current situation and what the future holds. It is up to you to honestly let them know that things will be okay and to communicate often what you and your leadership team are doing to assure that outcome. You have no choice but to be an optimist.


Thomas S. Clay is a principal with Altman Weil, Inc. He heads complex consulting assignments in strategic planning, law firm management and organization and law firm mergers and acquisitions.  

Contact him at tsclay@altmanweil.com.

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