find the latest legal job
Senior Associate - Litigation & Dispute Resolution
Category: Litigation and Dispute Resolution | Location: Melbourne CBD & Inner Suburbs Melbourne VIC
· Come work for a firm ranked in Lawyers Weekly Top 25 Attraction Firms
View details
Associate - Workplace Relations & Safety
Category: Industrial Relations and Employment Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Employer of choice · Strong team culture
View details
Freelance Lawyers
Category: Banking and Finance Law | Location: All Perth WA
· Freelance opportunities through Vario from Pinsent Masons
View details
Freelance Lawyers
Category: Other | Location: All Adelaide SA
· • Qualified lawyer with a strong academic background
View details
Freelance Lawyers
Category: Other | Location: All Melbourne VIC
· • Qualified lawyer with a strong academic background
View details
Best practice: Transforming law firms

Best practice: Transforming law firms

The ownership structure of many law firms can make organisational transformation difficult, writes Margaret Fitzsimons, but change is possible with leadership.While instigating and driving…

The ownership structure of many law firms can make organisational transformation difficult, writes Margaret Fitzsimons, but change is possible with leadership.

While instigating and driving change within law firms is essentially the same as in corporate environments, many law firms present additional complexities because of their ownership structure.

In the corporate environment, management, the board and shareholders are normally separate groups. In the traditional law firm partnership, management, board and shareholders are all one and the same. This makes instigating and driving organisational transformation particularly difficult, due to conflicts in the roles of owner, director and manager.

There are two major stages of organisational transformation. The first stage is to instigate the transformation. The second is to drive the transformation. The people and skill sets needed for each phase are usually different.

Instigating transformation is harder than driving transformation. Fear of the unknown is the number one reason why many law firms continue to decline, rather than changing the way the business operates.

I have seen many law firms with declining profits, poor cash flow and an inability to attract quality staff or new quality clients, yet the partners can fail to grasp that the only way to change the situation is to change themselves and their attitude to their business.

How do you instigate change?

Change can only ever be instigated by a compelling argument, by presenting facts and figures which demonstrate why change is necessary. Fear of change can be eroded by clear and logical thought. Quantifiable facts which illustrate the need for change include shrinking profits, decline in partner and staff numbers, reduction of market share, high staff turnover, loss of key clients or reliance on just a couple of clients, high levels of staff or client dissatisfaction and inability to achieve strategic goals.

Other symptoms which may be more difficult to quantify but which are also signs of a firm in decline are an inability to make decisions, division of the practice into silos, reactive rather than proactive decision making, clock watching, low pay, poor culture and political assassinations.

For change to be instigated, one or two partners need to show leadership and be determined not to continue doing business in the same way. If attempts to instigate change result in a stalemate, it may be necessary to bring in a mediator or management consultant to help the board arrive at a decision.

Slowly, slowly or big bang?

Slowly, slowly is better than no change at all, but the process is likely to be undermined because it is done by stealth. Staff are not trained in change behaviours and do not envisage the benefits of what the firm is trying to achieve. They are not inspired by the process because there is no ready communication or clear goal setting. Without a commitment from everyone, change will not take place. If a professional services firm has stagnated or declined, the only truly effective way to change is the big bang.

The driver and the champion

There are two imperative roles in law firms that are required in order to transform the firm - the driver and the champion. The driver is the person with change management and technical experience who makes sure that change actually happens, who formulates the strategy and implements the project plan. This person is both good cop and bad cop. The organisation is likely to have to import this skill set to initiate change. The champion is a partner who is a high performer, is respected by all and has the determination and interpersonal skills to support the driver.

The champion keeps an ear to the ground and acts as a bridge between the partners and the driver. This person is needed when the driver takes on important issues in the partnership and may need to shield the driver during significant periods of instability.

The champion helps to implement the vision of change, prevents the process from being undermined and brings the partnership along on the journey. Just as the driver must be able to rely on the champion at all times for change to be effective, the champion must be careful always to support the driver.

Transformation takes strong leadership. If you don't have strong leaders who are able to tackle the difficulties, don't even bother trying to create change. But for those who are willing to face the initial hurdles, well-managed transformation will always deliver results for your business.

Margaret Fitzsimons is a director of Trans4mation Pty Ltd. She will be presenting at the national summit of the Australian Legal Practice Management Association in Sydney on the 22nd and 23rd of October this year.

STEPS TO CHANGE

  • Launch a formal change program.
  • Educate everyone on why change is needed, what it will achieve, what to expect and how to manage change.
  • Ensure partners and senior management fully support change.
  • Make sure partners are trained in wearing their three hats - owner, manager and director.
  • Remember communication is key and that to sell change there must be an upside.
  • Develop good HR strategies to build a happy culture.
  • Try to balance bad news with good news.
  • Have some ready quick wins to get momentum going.
  • Don't create a blame culture. Everyone makes mistakes.
  • Teach partners business skills so that they understand how the work pipeline converts to profit.
  • When the firm starts succeeding, celebrate these wins with staff.
  • Tie your key staff to the business, be generous with remuneration, be a great place to work.
  • Keep the momentum going, keep your staff happy and business will boom.

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Best practice: Transforming law firms
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Scales of Justice, ALA, right-to-die law
06:04
‘Right-to-die’ laws would be a relief for terminally ill: ALA
The passage of an assisted dying bill through the lower house of Victorian Parliament has been haile...
Diversity
06:00
Diversity top of agenda for future WA Law Society president
The advancement of diversity in the Western Australian legal profession will be one of the key items...
Jetski
Oct 23 2017
How to fail well
The legal profession is due for an attitude adjustment when it comes to perceived failures, accordin...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...