Change Management 2: Strong Leadership and Collaboration are Required to Drive Change

Making meaningful and sustainable change will require collaboration and strong leadership. As discussed in Change Management Part 1, effectuating change in law firms is more difficult than other professions and industries and managing partners cite the reluctance or refusal of the vast majority of their partners to change.  Given the dynamic shifts occurring in the delivery of legal services and those who provide legal services, law firms will have to change in order to thrive or even survive.

Collaboration Tangibly Benefits Businesses

While not as evident a value as it should be in many law firms, collaboration is essential to change efforts and results. Change cannot happen if partners and functions within the firm operate autonomously and are siloed off. One of the first steps in change management will be a shift in the culture to a more collaborative organization, within the partnership, across geographic boundaries, among functions, roles and status levels and between and among practice disciplines.  According to Lionel Valdelion, author of 11 Key Business Benefits of Team Collaboration, the following benefits are realized by businesses that have a collaborative culture:

1. More flexibility as an organization, enhanced ability to manage sudden change
2. More engaged employees through teamwork and camaraderie
3. Healthier employees
4. Higher retention rates of employees
5. Enhanced ability to attract top talent
6. More productive meetings
7. Accelerated production and creation of value
8. Innovation is spurred
9. Better alignment with stakeholders, especially with clients
10. Better individual productivity
11. Increased profitability

Leaders Must Drive Change – 9 Ways to Do This

Change is risky, and lawyers are especially risk averse.  But change is necessary and in today’s law firms, making incremental change at a glacial pace will not be enough to excel or survive.  Today’s managing partners must become effective leaders and change agents who can drive and sustain lasting, transformative change.  This will require leaders to:

1. Embody and improve upon key leadership skills and attributes by investing in their own leadership skill development, being willing to explore new approaches and take risks, building support and common vision and addressing individual objections, selecting and nurturing a team of leaders who share vision and will lead others, taking the long view and putting the firm first above all else.
2. Create a sense of urgency by “creating a crisis” by: putting clients at the center; using metrics and information to “prove your case” including client feedback and input, firm financial trends, market/practice/client threats and opportunities; developing the opportunity for positive change and outcomes; showing your emotional investment; defying and standing up to the skeptics and pessimists; quickly mobilizing into action; and being the first one in the office and the last to leave.
3. Advance meaningful engagement. Gallup studies show that 31% of employees are engaged, 51% are not engaged and 18% are actively disengaged.  With millennials slated to represent over half of the workforce by 2020, firms will only be able to hire and retain millennials if they have a collaborative culture, a strong mission and values system, a modern workplace and create and nurture trust.
4. Create and nurture trust. To do this, leaders will have to revisit the values of the firm and the expectations of partners; manage by walking the hallways and engage in personal interactions; have an open-door policy; invest in face time and partner retreats/on-sites – partners need to get to know and like each other, develop respect, camaraderie; and foster open and transparent communication.  This will be particularly challenging as noted in a recent survey conducted by AdamSmithEsq.com  in answer to its question “How (truly) collaborative and collegial are law firms?” Only 41% of all lawyers believe there is a high degree of trust between lawyers at their firms.
5. Promote transparency and a clear strategy.  As we noted in our last post on Change Management, John Kotter and other experts suggest that leaders must do the following to implement effective change efforts:
   1. Lead with shared vision and purpose: the “why”
   2. Be explicit about goals; reinforce them
   3. Communicate the change opportunity
   4. Develop from bottom up, not top down – all stakeholders play some role
   5. Define roles and how actions impact change/outcome
   6. Build into employee development and recognition/reward systems
   7. Put clients at the core of your values, vision and change imperative
6. Break down the silos. Change requires collaboration and a regrouping of roles and talent clusters.  The best way of getting firms to work more collaboratively internally is with special task forces, client teams, industry groups, multi-disciplinary service teams, centralized practice groups across geographies, cross-functional administrative teams, cross-title teams (lawyers and other firm professionals) and knowledge sharing structures.  Outside the firm, leaders should facilitate more systematic dialogue and collaboration with clients, other law firms and service providers, vendors, LPOs and foreign firms.
7. Make the case that collaboration matters to your clients. Clients believe they receive tangible benefits from law firms with strong collaborative cultures. According to BTI Consulting, despite the benefits clients say that collaborative firms deliver, “50% of top legal decision makers see collaboration as their primary firm’s biggest weakness – and as the primary reason they limit the work they give these firms.”  Heidi K. Gardner, PhD., a renowned Harvard Business School scholar has conducted substantial research on collaboration in law firms, culminating in a series of Harvard Business Review white papers and articles as well as her book Smart Collaboration: How Professionals and Their Firms Succeed by Breaking Down Silos. In her article When and Why Clients Want You to Collaborate, Dr. Gardner summarizes ten reasons clients value a team approach:
   1. Access to firm’s best knowledge and experts
   2. Deeper understanding of their own business
   3. Insights from across the sector
   4. Innovation
   5. Global perspective
   6. Collaborative capacity
   7. Consistency
   8. Simplicity in the “vendor base”
   9. Efficieny and economy
   10. Relationships and respect
8. Drive innovation.  As stated many times before, lawyers are risk averse and highly resistant to change. The status quo of “if it ain’t broke, don’t fix it” is deeply entrenched.  But thinking creatively about doing things differently is essential to change.  Leaders must spur innovation by creating a safe environment and encouraging failure; breaking down hierarchies; building diverse teams for R&D and investing in “product development; formalizing R&D by hiring a Chief Innovation Officer, e.g., Bryan Cave, Littler, Dentons, Nixon Peabody, or by forming formal entities, e.g., Akerman’s R&D Council, DAC Beachcroft’s Innovation Labs, Dentons NextLaw Labs; encouraging cross-team, firm sponsored contests, e.g., Morgan Lewis’ SPARK 1.0 and 2.0.
9. Expect, recognize and reward.  Redefine the firm’s core values and meaning of partnership to prioritize collaboration and innovation. Change the compensation system, e.g., Linklaters recently dropped individual metrics in favor of team-based and client-based metrics, and use metrics for assessing core value behaviors (what gets measured gets done.) Implement teams and team-based goals, milestones, recognition and rewards.  Incorporate team behavior into individual performance reviews and recognize teams publicly; celebrate successes.

Key Take-Aways

1. Change is not an option, it’s a necessity.
2. Firms must act now to survive/excel – put clients at the center of your urgency.
3. Managing change requires stakeholder engagement, cooperation and collaboration.
4. Collaboration requires relationships and trust.
5. Safety and trust are built through meaningful interaction, involvement and transparent and clear communication of vision.
6. Change and innovation must be embedded into the culture: articulated, promoted, supported, rewarded.