What a difference a few years make. Perhaps three years ago, law firms thought they had it tough, fighting the forest fires of changing market structures, increasing
client expectations and demands, and shifting staff and partner engagement needs. But now the flames have been fanned even more by the economic downturn, future economic uncertainties, market liberalisation, regulatory change and the progress of three fundamental drivers for change within the market: globalisation, consolidation and commoditisation.
Like its immediate predecessors, 2013 is proving to be a very difficult, if not impossible, year to predict. Already some firms have gained and lost significant clients, with expenditure being closely scrutinised, if not significantly reduced. Mergers of larger firms are frequently being announced, high street practices are feeling the pressure, and small and medium-sized firms are closely examining
their strategies, keenly concerned about getting trapped in the ‘middle ground’. New business models are emerging – everything from huge market entrants like Co-operative Legal Services, with their daunting customer reach and marketing budgets, to ‘virtual’ law firms challenging the need for fixed premises and staffing.
Throughout this tumultuous period, law firms still need to produce and sustain a profitable service, and this can only be done through their people (at all levels and in all areas); as ever, the success of a law firm is dependent on the ability of its people to use their expertise and knowledge to deliver valuable services to clients.
To continue to do that in this volatile market, law firm leaders must be able to lead effective change. Essentially, this means understanding the changes in the market, where you currently are (strengths, weaknesses, talents, competitors, clients, profits and so on), defining exactly where you want to be in light of the changes (clients, markets, sectors, products, profits, geography and so on), and then leading the people, implementation and transition to get there. To do that,
you need to ensure that your business, and the people within it, are capable of doing things differently in response to changes in the market and are aligned to working in a new way.
This article takes a practical look at how to lead effective change by:
- reminding you of, or perhaps introducing you to, Kotter’s eight-step process for leading change;
- giving some practical tips for implementing change using those phases; and
- providing a practical case study on the implementation of change.
THE KOTTER CHANGE MANAGEMENT MODEL
In 1990, John Kotter identified, through significant research into a large number of companies, the following six main ‘failures’ in leading change.
- Allowing too much complacency: ‘I can just keep doing what I have always done.’
- Failing to build a guiding coalition: ‘Changing the firm is their job.’
- Failing to understand the power of a clear vision: ‘Where is this taking us? Why should I do things differently?’
- Failing to communicate the vision: ‘I don’t understand why things suddenly need to be different.’
- Permitting roadblocks against the vision: ‘That’s not how we do things here.’
- Not planning for or getting enough short-term wins: ‘What’s been the point? Nothing has changed.’
Many of these will sound familiar to law firm leaders. From them, Kotter developed
his “eight-step process for leading change”. To be effective, leaders of change need to ensure there is purposeful activity at all eight steps to avoid these ‘failures’. In law firms, this process can be used as a ‘checklist’ to achieve effective change.
The eight steps (edited for the purposes of this article) are outlined below. I have
also included the most common tips I have used for achieving each phase of the process successfully – although each leader will have different experiences around what does and doesn’t work for their firm. You can find out more about the process on the Kotter International website at tinyurl.com/ou8wsmw.
1 ESTABLISH A SENSE OF URGENCY
Research the market, analyse your competition, identify and discuss potential
crises and opportunities. The purpose of this phase is to show people that to stay as you are is not an option.
- Be honest (sometimes brutally honest).
- Validate your opinions with sound analysis – never manipulate analysis for your own ends.
- Don’t avoid uncomfortable truths.
- Don’t go into analysis paralysis – be decisive.
2 CREATE A COALITION
Identify or create a powerful and influential group to lead the change, and enable that guiding coalition to work like a team. The purpose of this phase is to
ensure there is clear collective leadership involvement and responsibility.
- Include both key influencers and some ‘noisy detractors’ – but don’t involve too many people, or always use the same colleagues on all your change projects.
- Encourage those involved to prioritise their commitment to this group.
- Develop the group’s ability to act as a team.
3 DEVELOP A CLEAR VISION
Create a vision to clarify and direct change activities and create strategies to
deliver the vision. The purpose of this phase is to ensure that, when change is undertaken, the end outcomes are clear – this prevents change for the sake of change and enables the measurement of progress.
- Be bold in what can be achieved, using sound analysis.
- Be able to summarise the desired outcomes clearly and concisely to everyone – and make sure everyone in the coalition can, too.
- Don’t draft and redraft the perfect wording around your vision.
- Don’t wait until the vision is finished before talking to others about it or seeking other people’s expertise, and then do be open to amending it if people have great ideas.
4 SHARE THE VISION
Use every possible way to communicate the new vision and strategies; enable members of the guiding coalition to be role models for the rest of the business. The purpose of this phase is to ensure that everyone understands the desired outcomes from the change and has time to assimilate and calibrate what that change means to them.
- Communicate the vision clearly, and in terms that everyone can engage with and understand (profits per equity partner, for instance, has limited appeal outside a firm’s partner group as a reason to change).
- Communicate the vision many times, particularly every time progress on the change is communicated.
- Don’t wait until everything is done before you start communicating.
- Don’t let only one person do all of the communication.
5 EMPOWER PEOPLE TO CLEAR OBSTACLES
Remove obstacles, change structures and processes that may obstruct the change effort, and encourage risk-taking and new ways of working / thinking. The purpose of this phase is to reduce personal and organisational resistance to change.
- Identify barriers to the change being effective.
- Systematically take action to reduce each of those barriers, and communicate to people that you’re doing so.
- Don’t allow the barriers to use up energy and time without resulting in a change.
- Deal with people who are being a barrier to the change directly and considerately.
- Escalate to the coalition and leadership group significant barriers that are not being addressed.
6 SECURE SHORT-TERM WINS
Plan to show performance improvements, ‘create’ and talk about quick wins, and visibly recognise and reward those who made those wins possible. The purpose of this phase is to focus on demonstrating the benefits of the change and establishing a sense of progress around the change.
- Keep a note of what has been achieved.
- Tell people when something has been achieved – don’t assume people will know.
- Focus efforts on achieving some quick wins – don’t get so busy in the overall project that no attention is given to potential quick wins.
- Don’t allow short-term problems to get blown out of all proportion in terms of the overall success of the change.
7 CONSOLIDATE AND KEEP MOVING
Build on growing credibility to change all systems and structures that don’t fit in with the vision for the change; hire, promote and develop people who are successful in terms of the change; and reinvigorate the process with new projects. The purpose of this phase is to demonstrate and maintain a sense of purpose and progress, and to put in place the people (who may have different capabilities to
those that were previously in or acknowledged by the firm) who will ensure a continued focus on how things now need to be done.
- Track progress.
- Build in time to learn at each stage – listen and understand, and remember that you can learn as much from what did not work as what did, and that improvement often comes out of crisis.
- Don’t move onto the next stage of change without truly understanding what has been achieved, why, and what could have been done differently.
8 ANCHOR (BED-IN) THE CHANGE
Ensure that everything reinforces the change, and progress towards it. The purpose of this, the final stage, is to ensure that the change becomes the ‘normality’ of how things are done, rather than a separate initiative.
- Hire, promote or develop people with the right capabilities.
- Keep talking about how things are now done differently, and why.
- Keep some leadership focus on measuring the impact of the change and whether it has achieved the original vision.
- Allocate an appropriate level of resource to continuing to implement the change.
- Don’t allow things to revert to how they were before.
- Don’t be afraid of revisiting the original vision and setting new desired outcomes.
CASE STUDY FOR LEADING CHANGE
A firm is implementing a new partner remuneration system that is significantly different from its current system. It is making the change in order to target more profitable growth than has been experienced in recent years. In order to lead the change well, the firm could take the following steps, in the eight phases.
- Use market and competition analysis to show opportunities for change, and provide information on how the current system is unsuitable to facilitate profitable growth.
- Establish a team of key influencers and energetic detractors, asking them to work with the external consultants on the design of the system. Give the team some timelines, and allow them time off-site with the consultants to be able to shape the process.
- Be clear with that team on the desired outcomes, and why those are important in terms of achieving the overall strategy of the firm. Ask them, while they are off-site, to verify this vision for the new system.
- Explain, and explain again, the vision and desired outcomes, answering all questions. Initially, do this to an all-partner/ management meeting, and then have one leader / influencer attend a meeting of each department and / or team.
- Allow the key group of people to take forward and be responsible for the implementation of the new system. Listen to them when they encounter barriers to progress, and instigate activity to remove those barriers.
- Communicate what has been achieved and what has been learned about the benefits and advantages of the system – do not get distracted by local difficulties.
- After the first implementation of the new system, ask for feedback about what could be done differently from now on, and what has gone well. Communicate a plan of action to deliver any changesthat are necessary when it is next implemented.
- Use the new system when any targets are set for partners, referring back to the vision and the behaviours defined in the new system.
EFFECTIVE CHANGE LEADERS
So what is it that leaders need to do to ensure that they are leading change effectively? Good leaders should, among other things:
- have good knowledge of your strengths and weaknesses, and manage the impact of those in terms of their leadership style to build great relationships with others;
- be resilient and able to handle paradoxes / uncertainty;
- lead by example and accept responsibility to ‘role-model’ the change;
- take responsibility for displaying the appropriate behaviour and style to get great performance and engagement from others;
- continuously set out a clear vision and reason for change;
- prioritise change and think about it, including, for example, what you could be doing differently and how to interpret and address client feedback;
- ruthlessly manage time and priorities – never be too focused on your day-to-day tasks to give time and attention to the importantactivities which will change the firm; and
- understand clients / markets / competitors on an ongoing basisand continuously ask yourself what else you need to know andhow you can find it out.
The actions you take in your own firm may differ, but what is important is that leaders take responsibility for understanding their own capabilities at leading change, and seek to develop those capabilities.
Over the coming years, the ability of law firms to change and adapt to the market, clients and people will be a defining feature of success – or not. This represents a challenge, and opportunity, for leaders in law firms: to develop themselves to become exemplary leaders of change.