Change is now a constant in legal services, whether it means responding to market changes such as Covid, regulatory changes, or making planned improvements to stay ahead in a competitive market. As firms are finding, the increased profitability of 2021 is giving way to an environment of increased costs and uncertain future demand. The skills of knowing what to change, what to change to and how to get those changes done have never been as critical for business success.
There has been a big increase in the number of Operations and Technology roles created in response over the last few years as firms have placed focus on the effectiveness and efficiency of their operations and how legal tech can support those aims.
Frequently however, these investments don’t lead to improved business performance and it’s important to understand why.
In short, ‘bums on seats’ aren’t enough. It is essential to ensure:
- They are the right people: That all the skills, capacity and motivation are in place
- They are set up to succeed: That the the context for change has been planned and the right governance, engagement and sponsorship is in place
How most firms do change
When most firms start out, change is managed by front line staff (mainly because there is no one else to do it) as part of their day-to-day activity. This approach can work for a firm of up to around 20 people, beyond which it begins to break down due to scale and complexity. Most firms learn over a period of months and years that change doesn’t land as well the bigger they get and at this point a designated Ops or Tech leader is usually appointed to lead change initiatives, who may have some aligned functional expertise but often lacks all the time, or specialist skills needed (see below). When firms are larger still or recognise the limits of this approach they often hire a Transformation or Change Director who typically struggles, either because they can’t create the resources or support to deliver change effectively or else are supporting an organization that doesn’t understand the wider role of the board in its successful delivery.
The graphic below demonstrates what we commonly see in client organisations in terms of the responsibility for managing operational and business changes, and how businesses move through these options as they grow:
The right people
When investing in additional staff, the first pitfall firms often face is whether they are the right people. Often one or more of the following is missing:
The skills for change
However your business approaches change, the questions in the graphic below will need to be answered if it is to make the dial move on business performance. There are multiple stages within the lifecycle of change and transformation – starting with initial questions about the direction of the business and the challenges it faces, through to identifying and designing the changes to be made, to delivering and embedding those changes.
The challenge is that these stages require different skills – ranging from business analysis to change management (as shown in Table 1 below). It is rare to find these skills in a single person or professional group. Change in a modern law firm invariably involves systems, processes, people and data and will necessarily involve experts in all those areas as well as generalists who can bring them all together to deliver a coherent improvement for the firm.
Capacity for change
As well as the potential skill gap, it is likely that capacity will be a significant issue when using internal staff for whom this is not their full-time role. If the person also has a ‘day job’ to manage, how much clear thinking and execution time will they have to dedicate to the change work? This can either lead to the person or people assigned burning out as they are overworked, or the result not being delivered at all (or both).
Motivation for change
The final hurdle that is often less obvious is motivation – without a clearly drawn up set of incentives or clear roles, there can be competing priorities for internal teams, and there may be challenges around neutrality. Delivering change means being objective and can mean delivering hard truths – something that can be challenging for internal teams to do, especially if their jobs or teams are impacted.
The right environment for change
Even if you have people with all the right skills, and the time and motivation to deliver the change, the environment they operate in can be the difference between success and failure.
As a leader, consider the following:
- Have you clearly set the direction for the business, with clearly defined business outcomes? Have you understood in detail the three biggest levers that you can pull to drive those outcomes?
- Are your existing processes aligned? Is your current tech fit for purpose? Does your culture and people strategy support the change?
- Do you have actionable intelligence – meaningful, accurate data that can drive decisions, and the forums in which those decisions can be made?
If you’ve answered ‘no’ to any of these, it’s likely that your change is not set up for success.
Delivering change internally is not the only option; there are a number of alternative approaches that are listed below, each of which has their own merits. Regardless of the preferred approach, the senior leadership team retain a critical role setting direction and providing effective sponsorship and governance.
How we can help
At Glenesk, we deliver improved profitability for our clients by improving costs, customer service, cash and risk. We also help grow the capability of your firm to deliver change at pace and scale.
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