OF elephants and sitting ducks in the great legal reformation

The elephant in the room is partner resistance to change. Sally Calverley suggests a way forward.

Yesterday evening I attended The Great Legal Reformation, an event organised by Shaun Jardine of Brethertons. The very fact that the event was organised by a law firm rather than say, Legal Futures or a bank is unusual. Add to this Mitch Kowalski as the main attraction and a venue change due to sheer weight of numbers and you will start to see that this was a special event.

Mitch himself is a great speaker. Relaxed, assured, knowledgeable. He can see into the crystal ball and what he sees there is exciting: a vision of teams of people working together to solve clients' legal problems efficiently and effectively, supported by cool technology. Mitch and the panel of experts (including Stephen Mayson, Amir Ali and David Gilroy) were equally clear on the direction of travel and what was going to be required to get there. During the polling part of the evening and the Q and A, everyone agreed: the Great Legal Reformation is coming, it will be driven by technology, will invite non lawyers into the inner sanctum and will result in prices being driven down to a point where the pent up demand for legal services will be released. The business model is dead! Long live the law firm of the future!

And yet.

Ah, and yet. There were two very interesting polls. One showed that law firms are well aware of the challenge facing them: over 60% of the law firms in the room said that their management knew and were well placed to address the challenge. The other poll said that the people in the room thought the changes would take place between 3-12 years from now. Does this mean that the people in law firm management have existing plans in place that will completely transform their businesses over the next decade? Certainly, some brave leaders are doing exactly that and Shaun is one of them. But many, many aren't. Many law firms are doing what they always do, using the rear view mirror as a guide for the future and waiting for someone else to go first. Someone, Anyone. As long as it's not a major competitor (and as long as they don't get it right!). The feeling seems to be that we'd all much rather someone else tried and failed so we can learn from their expensive mistakes.

Which is a bit daft to be honest but completely understandable. After all, as I explained in a blog post for Lexis Nexis, we'd all much rather die than let go of what has brought us success so far.  Change is hard work, expensive and not much fun. If you are a partner fewer than 12 years away from retirement, slogging away at the day job, why would you sign up for that? You won't reap the benefits after all.

Which brings me to the point of this blog. The law firm business model IS broken. Nobody seriously disputes that anymore. The only remaining question is what is stopping firms from changing? Time, resource and money are excuses rather than reasons - there's always enough time, resource and money to do the things that partners want to do. During the chat afterwards over a glass of wine, everybody agreed that the elephant in the room is partner resistance.  And the hard truth is that firms struggling with partner resistance have perhaps two years to sort that out before they become sitting ducks. 

Why two years? Well, because the change will start in three. If they want to have any chance of keeping up with the Joneses and surviving the GLR, those firms with recalcitrant partners need time to implement whatever change they can afford during that year. So their management team's strategic planning will include preparation during years one and two for year three when they can actually get to do what they need to do right now.

During those two years the world will change. The economy, the global political situation, climate change, consumer confidence.  In the legal market, heavyweight commercial firms are on the GLR already, working closely with their deep pocketed clients to fund the enormous investment in AI and smart technology that the future delivery of legal services demands. They will then be willing and able to fish in other ponds - the Bank panels will shrink as the City demonstrates how the AI they invested in enables them to do more for less. Smaller, more agile firms and virtual firms are already changing the game for everyone else by concentrating on what makes money, refusing to do the rest and attracting external investment. At the end of those two years it may already be too late for some. 

If this is the situation you are faced with, what will it take to get the partners onside? And how quickly can you do it? It's going to take great leadership, for sure. Persistence. Communication, negotiation. And money. There also needs to be a grown up recognition that what worked in the past is not going to work in the future. Specialist technical expertise is required in law firm management these days, be that process management or pricing. Both partners and management might benefit from a further and more open separation of the "management" function of a partner from the "ownership" function, especially (and here's the important point) if the ownership were to survive retirement. What's more, ownership of this nature allows you to engage partners in the discussion about how the changes would benefit their income over the longer term, provide them with a connection to the firm that has been theirs for so long and allow them to come to a more modern understanding of their legacy. In our experience, partners don't resist for the sake of it, however it may seem sometimes to the frustrated management. Obviously, changes such as this are also pretty difficult but they can be made and the results, the sense of engagement and potential are tangible. 

Two years. It's not long, is it?
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