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International Review

w w w. e d g e . a i

NEW MODELS FORSERVICE DELIVERYLESSONS FROM THE BULK PROVIDERS IN LAW FIRMS

by Nick Jarrett-Kerr

IN DEFENSE OF AUTHORITYDEBUNKING THE MYT H OF COLLEGIAL MANAGEMENT

by Robert Millard

MISTAKESMANAGING PARTNERS MAKEby Gerry Riskin

FINDING NEW LEADERSHIP: SUCCESSION PLANNING FOR PROFESSIONALSERVICE FIRMS

by Ed Wesemann

WHY CHANGE ?THE CHALLENGE OF IM PLEMENTING YOURSTRATEGIC INITIATIVES[ P a r t T w o ]

by Patrick J. McKenna

LOOKING UNDER THE ROCKS:

THE COMPETITIVE ADVANTAGE OFOPERATIONAL REVIEWS

by Karen MacKay

S U M M E R 2 0 0 4

RETREAT

Now that pretty much represents the conventional practice

for most firms’ Retreats. While the groups may be different

and the speakers may vary, the measurable results are all too

often the same. As one managing partner commented about

firm meetings in general, "When all is said and done, there is

usually a heck of a lot more said, than ever done!"

Of course then we come to scheduling our next Retreat. And

wouldn’t you know it. Some partner has the audacity to ask,

"But did anything really happened as a result of our last get

together?"

Now when that happens, and it inevitably will, our very best

counsel would be for you to punish that partner (for their

audacity) by assigning them to Chair the organizing committee

for your next Retreat. Then please give that partner our tele-

phone number. We transform talk into action.

RETREAT

RETREATSRETREATS

are becoming fairly commonplace. The motivation is usually

to provide more face-to-face interaction thereby developing

social bonds, improving communications, dealing with opera-

tional issues, exploring further directions, and even having a

bit of fun.

At these Retreats we often engage some outside speaker suffi-

ciently inspiring that everyone gets charged up and takes

copious amounts of notes. Inevitably, our sessions conclude

and we all return, hopefully invigorated enough to face the

pile of voice-mail messages and client files that have been left

burning on our desks. That binder of notes hits the shelf and

maybe, just maybe, something inspires us to return to it in

the months to come, such that we pull it down and actually

do something as a result of that last retreat we all attended.

Dear Clients and Friends,

We have been delighted by the response to the first issue of EdgeInternational Review as a professional journal for individuals with governanceauthority in law firms. This second edition of Edge International Review con-tinues our celebration of Edge International’s 20th Anniversary year.

One of the things we hear from law firm managing partners, executive direc-tors and other senior leaders is that pressing day to day matters leave little timeto provide the important policy and strategic issues the thought process theydeserve. As we move into the "dog days of summer," we hope that you finda little time out of the office to review this issue’s articles and that they provideyou with some new insights into your leadership role.

If you would like to provide copies of Edge International Review to other mem-bers of your management team, it can be downloaded from our website atwww.edge.ai. Also on the website are literally hundreds of articles sorted bytopic. Should you have any questions about these articles or any other issue,please feel free to contact any of our partners listed on the inside back coverof this magazine.

We hope you have a relaxing and enjoyable summer. We thank you for yoursupport over the past 20 years.

International ReviewC O N T E N T S

“ F 1 R S TAMONG EQUALS”

Patrick McKenna and David Maister’snew book is available at bookstores and fromAmazon.com.

"The Successful Lawyer,"a personal and inspirational

six-disc audio CD program

that helps lawyers make their

practices more profitable and

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The most successful practice

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Edge International MarketAnalyses are sophisticatedand insightful analyses of lawfirms’ market share in majorgeographic markets. Getdetails at www.edge.ai.

NEW MODELS FORSERVICE DELIVERYLESSONS FROM THE BULKPROVIDERS IN LAW FIRMSby Nick Jarrett-Kerr

Much can be learned from firms work-

ing at low margins who have had to

innovate and transform their models for

service delivery in order to survive and

prosper.

IN DEFENSE OFAUTHORITYDEBUNKING THE MYTH OFCOLLEGIAL MANAGEMENTby Robert Millard

The technique of scenario planning can

help lawyers and their clients make

sound judgments about the future.

MISTAKESMANAGINGPARTNERS MAKEby Gerry Riskin

Mistakes Managing Partners Make

describes the common traps with quick

practical tips for avoiding them.

LOOK UNDER THEROCKS: THE COMPETITIVE ADVANTAGEOF OPERATIONAL REVIEWSby Karen MacKay,

In order to truly be successful in the

delivery of professional services it is

essential that you learn to master the

mundane.

FINDING NEWLEADERSHIP: SUCCESSION PLANNING FORPROFESSIONAL SERVICE FIRMSby Ed Wesemann

Professional service firm partners often

reject the concept of a designated suc-

cessor. To have management succession,

firms must create a pool of trained and

experienced leaders.

WHY CHANGE? THE CHALLENGE OFIMPLEMENTING YOURSTRATEGIC INITIATIVES [PART TWO]

by Patrick J. McKenna

This is the second part in our prescrip-

tive counsel on how to get lawyers to

change behavior.

4

10

16

20

24

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E D G E 2 0 T H A N N I V E R S A R Y

Copyright © Edge International, 2004. All Rights Reserved. Edge International Review is published

by Edge International as a service to its clients and friends.

S U M M E R 2 0 0 4

EDGE INTERNATIONAL Box 700, 21 Standard Life Centre10405 Jasper AvenueEdmonton, AB T5J 3S2, Canada, [email protected]

Canada/USA:...1 800 944 EDGEUK: ..............0 800 964 911Australia: .......1 800 123 366South Africa:...0 800 999 849

S T O R E

Publication designed by Jim Prokell

THE F I RST GREAT MYTHof Legal Management is that it ExistsH. Edward WesemannTough Issues for Law Firm Managing Partners and Administrators

Every month thousands of law firm managing partners, admin-istrators, management committee members and practicegroup leaders read Ed Wesemann’s e-mail messages. Asa self proclaimed destroyer of sacred cows, Ed’s articlestake on the myths and "me too" thinking that cause lawfirms to "never quite get around to doing anything."

The first Great Myth of Law Firm Management is that itExists is a composite of Ed’s famous e-mails addressing thefront burner issues of management in law firms around theworld. Among the topics:

● Firing Unprofitable Clients● Taking the Easy Way Out with Non-Equity Partners● Knowledge Management: The Emperor Has No Clothes● When Good Law Firms Go Bad● Ten Terrible Truths About Law Firm Strategic Planning● Hitting the Wall: Six Rules for Managing the

Mega Practice

THE FIRST GREAT MYTH… is available at Amazon.com or from the Edge website at www.edge.ai

B O O K S H E L F F E A T U R E

4

FACING COMPLEX FUTURES: SCENARIO PLANNING AS A STRATEGIC PLANNING TOOL IN PROFESSIONAL SERVICES FIRMSNEW MODELS FOR SERVICE DELIVERY–LESSONS FROM THE BULK PROVIDERS IN LAW FIRMS

by Nick Jarrett-Kerr, EDGE I N T E R N AT I O N A L

Models for Service DeliveryLessons from the Bulk Providers in Law Firms

5

There is a story doing the rounds about aneminent heart surgeon who, every Saturdaymorning, has twelve surgical teams conductingtwelve different heart operations at the sametime. The eminent Heart Surgeon goes fromone operation to another taking a few minutesin each case to perform the incredibly intricateand specialised pro-cedures for which heis famous. At theend of the morning,twelve grateful heartpatients later, he willhave earned a signif-icant sum for eachoperation as a con-sequence of applyinghis t ime and skil lw h e r e i t c o u n t s .Even i f this s toryproves to be apoc-ryphal, it illustratesa clear point very well—that, even in the case ofthe most specialised services, much can belearned from those who are supplying high vol-ume commoditised professional services—thebulk providers. What the Bulk Providers havedone is to respond to the pricing challenge andlow margins by the following means:

Developing their business so as to dramati-cally to increase the volume of work,

Standardising the processes so as both to reduce the time involved in each step and to enable delegation to less costly staff

EDGEInternational ReviewS U M M E R 2 0 0 4

Clarifying the level and extent of necessary intervention by skilled professionals into each piece of work

Organising the work into well managed teams

As one Senior Partner of a Bulk ProviderLaw Firm put it to us"This is not rocket sci-ence. In most cases it isjust common sense".Yet, as we go round LawFirms, we are still struckby the cottage industryatmosphere and generalair of disorganisationwhich s t i l l pe rvadesmany partnership corri-dors. Partners are stillinsisting on the freedomto practice law in their

own way, with their own styles and formats,and their own tailored precedents. The wayclients are dealt with may well vary consider-ably from one room or work station to anoth-er, and junior members of staff are expected toreact flexibly to differing working practices andprocedures depending on their supervisor forthe time being. As an example, we have fre-quently elicited widely differing answers withinthe same firm when asking how long the samestandard step takes in a transaction or litigationmatter. More worryingly, some Partners haveno idea of the answer! What is clear is that forthe Bulk Providers, the old cottage industry

Much can be learned from firms working at low

margins who have had to innovate and transform their

models for service delivery in order to survive and prosper.

●

●

●

●

s we go round Law Firms,

we are still struck by the cottage

industry atmosphere and gener-

al air of disorganisation which

still pervades many partnership

corridors

A

6

model has completely disappeared in favour ofsomething far more organised, efficient andcommercial. It seems to us equally clear thatthe old inefficient working practices are steadi-ly becoming unsustainable even for Firms whopride themselves on being High Value Providers.

The brutal truth is that clients are becom-ing increasingly prescriptive about what theywant their lawyers to do and how much theyare prepared to pay them.However prestigious orspecialised the service,they are no longer pre-pared to leave entirely tothe discretion of their LawFirm how much time theLaw Firm spends on theiraffairs, especially wherethe fee is payable on thebasis of an hourly rate.

What is interestingis that, in responding totheir competitive chal-lenge, the Bulk ProviderLaw Firms have beenhighly innovative, buthave not had to entirelyre-invent the servicedelivery wheel. Theyhave, however, remod-elled and reshuffled it aggressively to provide amodel which is responsive to current needs. Whatwe learn from their experience is that they havemanaged to achieve enormous efficiency savingsand profitability improvements by radically chang-ing—and then standardising—the way they dothings. This requires an innovative approach, fromthe service strategy stage right through the processdesign stage to the service delivery methodology.

We have held conversations with a numberof Managing and Senior Partners from LawFirms who are essentially providers of HighVolume, Low Margin work. From these conver-

sations and from our own experience, the fol-lowing six essential features have emerged:

1. The old Partnership model has to be redefined.Many Law Firms have discussed abandoningthe concept of Partnership as a managementstructure in favour of an entirely corporatemodel, but this slightly misses the point. Whatis vital is not a change of structure but a changein working methodology and partner

behaviour. Firms can nolonger act as essentiallysets of Chamberswhere individuals areentirely free to get onwith practising law intheir own way as solepractitioners. Nor, inan environment wherespeed and flexibility arekey, can decision mak-ing be channelledlaboriously throughpartners’ meetings.Decisions, such asstaffing levels, pricingand infrastructureresources, have to be made swiftly and effi-ciently. Accordingly,management and deci-sion making must be

delegated to an efficient management teamwith the authority to bind the partnership.This is far from easy to achieve. As one SeniorPartner told me,"We have lost some partnerson the way. Not every partner will be preparedto give up his autonomy in this way; difficultdecisions have to be made and if necessary non-compliant partners should be persuadedto move on". A Managing Partner from anotherfirm confirmed this: "In low margin work,every aspect of management is thrown intosharp relief—it is very easy to lose moneyvery quickly unless you actively managealmost on a minute by minute basis".

NEW MODELS FOR SERVICE DELIVERY–LESSONS FROM THE BULK PROVIDERS IN LAW FIRMS

hat is interesting is that,

in responding to their competitive

challenge, the Bulk Provider Law

Firms have been highly innova-

tive, but have not had to entirely

re-invent the service delivery

wheel. They have, however,

remodelled and reshuffled it

aggressively to provide a model

which is responsive to current

needs

W

7

2. Compliance regime has to be in place.The challenge for Law Firms is not just to improve profitability but to manage qualityand service efficiency. In the drive for costsavings, it is all too easy to cut corners and toopen the firm up to increased complaints andclaims. At the end of the day, successful exe-cution boils down to the need to obtain bothefficiency and consistency. Methodicallyapplied case management systems can helphere. To quote the Managing Partner of onefirm with a bulk re-mortgage operation, "Thebiggest benefit of Case Management is the management of risk". But the history of CaseManagement is littered with examples of Firms where implementation has only part-ly taken place or is deeply flawed. This isusually because partners have chosen toignore the new systems and carry on doingwhat they have always done.

We have seen two possible change manage-ment approaches here. In one case, the approach was consensual: "Getting peopleto change their ways and use new processesand systems is a major hearts and mindsexercise—as it not only needs them to dothings differently, but they also have to adaptto the Case Management system doing thingsfor them in a way they are not used to. Thekey is having Champions to blaze the trail."The alternative approach is more brutal withthe introduction of a well enforced and dis-ciplined regime where compliance becomesobligatory - shape up, or ship out.

3. Efficient Management of Time and Moneyis critical. It is quite noticeable, in the firmsto whom we have spoken, how much empha-sis is placed on the management of both timeand money. In most cases, fixed fees are involved, and the responsible partner willspend a great deal of time trying to figureout ways to cut an extra few seconds of timeout of each stage in a transaction or project.

As an example, we were told that in one casea 25 minute process had now been engineereddown to one and a half minutes. The prob-lem (away from the Bulk Providers) is thatlaw firms have become accustomed to regimeswhich place a huge reliance on measuringinputs (Chargeable Hours recorded) ratherthan outputs (successful outcomes). This isall well and fine when the client will pay forevery hour spent and billed, but is not sustain-able in an era when clients increasingly wantto know exactly what is achieved with the timespent on their affairs. In addition, in low mar-gin work, pricing and base cost are absolutelykey and both have to be watched like hawks.

What is of even greater importance is the management of workflow. One senior part-ner told me "Managing the numbers is a majorissue for us. Too much work coming in andwe can’t cope. Too little, and we have peoplesitting idle. You have to have reliable knowl-edge of the volumes of work being introduced.It takes us, on average, six months to staff upfor a doubling of volume from any of our insti-tutional clients." What is more, the proces-ses and procedures have to be constantlyrevisited and re-engineered so as to adaptto new client requirements and differentclient preferences, and to ensure continuingcost effectiveness. Most low cost providerstherefore find that they are devoting con-siderable resources and energies to the con-tinual task of trying to find ways of doingmore for less in a shorter time.

4. Client relationships are nurtured on an ongo-ing basis. Doing large volumes of work for big institutions requires, among other things, a sus

- tainable and close relationship to ensure that theservice continues to meet changing client andindustry requirements. A recent example ofthis, in the United Kingdom, is the recent intro-duction in the United Kingdom of demandingnew money-laundering regulations. .


It is encouraging to see that the more pro-active firms seem to be discussing all aspectsof their relationships openly and regularlywith their clients. An important aspect ofthis is to agree and refine processes andmethodologies, a practice which not onlyhelps to cement relationships but anticipatespossible future trends and ambushes as well.

5. Training and Development is essential notoptional. One Law Firm told us that at anyone time, they have 35 new members of staffundergoing initial training aimed to inductnon lawyers in the technology, legal processand systems of their business. Another firmfinds it so difficult to find, train and retaingood people that they are contemplatinghead-hunting the best lecturer from the localLaw School and starting up their ownAcademy. The challenge is to keep staff inter-ested and motivated in work which canquickly become repetitive and dull, and toprovide them with sufficient career devel-opment to enable a good level of retention.We were told "How you treat people is key.You need a fixed regime which is tough butflexible and relaxed. A brutal atmosphere,where people have to put their hands upfor permission to visit the bathroom, doesnot work".

6. Trends must be persistently tracked. In thecase of most Firms we looked at, the originalroute to the provision of bulk services seemsto have emerged as a strategy over a periodof time, from the intuition of the partners,and from actions taken piece-meal over a period. Those actions then converged overtime into some form of consistent pattern,which was then re-enforced and accelerated.But in all cases, what was needed in the firstplace was a deep understanding of the mar-

ket-place and its opportunities, the ability todiscern trends before they arose, and then thecourage and conviction to exploit those trends.This trend-seeking formula of analysis andintuition is equally important during thejourney as at the start of it. In Law Firms, thereare many obstacles to any form of plannedapproach, not least of which is the reluctanceof partners to give up some fee-earning timeto think about long term objectives. But inthe context of service delivery, new and antic-ipated trends—whether industrial, technolog-ical, economic or legislative—need to be fil-tered and synthesised almost on a daily basis.Different ways of doing things need to beidentified and piloted. New technologicaldevelopments have to be investigated andassessed. Innovative business models mustbe unearthed. Industry meetings should beattended. In the successful Law Firms whichwe looked at, one feature was absolutely clear.Somebody (in some cases, more than oneperson) took on the responsibility for achiev-ing all of this.

It is clear that, for the Bulk Providers, thesix features outlined have been introduced andmanaged aggressively and commercially.Although the specific models for service deliveryare not generic for all types of ProfessionalService Firm, the innovation and implementa-tion of the strategies for successful executionapply universally.

Nick Jarrett-Kerr is a partner with Edge International.

Nick is a Solicitor and the former Managing Partner of

a large UK national Law Firm. He specialises in

Professional Service Firm Leadership and Strategy. He

can be reached by email at [email protected] and by

phone on +44 (0) 1761 463115

8

NEW MODELS FOR SERVICE DELIVERY–LESSONS FROM THE BULK PROVIDERS IN LAW FIRMS

PROSPECTIVE CLIENT

Ask partners for a list of potential prospects. No problem.

Ask them when they are planning to make contact. Get ready

for all the excuses as to why it might not be appropriate given

their existing friendship, why they fear they might offend…

Maybe your firm is already overburdened with too much of

the kind of high quality work that has partners racing enthusi-

astically to their offices in the morning. Maybe you don’t

expect partners to concern themselves with developing a book

of business. Or, maybe you just hold to the notion that if

every partner just does good work, the phone will ring.

On the other hand, if partners aren’t enthusiastically racing to

the office inspired by their growing book of business, isn’t it

about time you helped them develop their business develop-

ment skills?

PROSPECTIVE CLIENT

WE ALL KNOWWE ALL KNOW

that there are times when it is appropriate to explore a new

business opportunity. So why does the very thought of having

to take action make most partners’ hands sweat?

Take the CEO who happened to get dragged along by one of

our loyal clients to the last seminar and found the content

quite engaging. In fact he expressed interest as he exchanged

business cards with on of our partners. But that was three

weeks ago and the business card remains somewhere on the

partner’s desk. No, it didn’t get buried there by accident or

because this partner is spending every waking moment on

good billable work. It got buried because this partner is suf-

fering a mental block, not having the nerve to pick up the

phone, or knowing exacting what to say.

AUTHO

10

A key tension in any law firm is balancingthe managerial authority required to meet busi-ness objectives, with the professional autonomyand independence demanded by the firm’slawyers.

Corporate scandals such as those that led tothe demise of Arthur Andersen have made italmost sacrilege to mention "power" and "man-agement" in the same breath. Managerial poweror authority is now often automatically suspect-ed of bad intentions and therefore mistrusted.

Management, we are told, needs to be "bot-tom-up," inclusive and participative, not only toprevent managers from misbehaving, but also totranslate democratic norms of everyday life intothe workplace.

IN DEFENSE OF AUTHORITY: DEBUNKING THE MYTH OF COLLEGIAL MANAGEMENT

Authority

Power or right to en-

force obedience; the

right to command, or

give an ultimate deci-

sion; power to influence

the conduct and actions

of others; power over

the opinions of others;

intellectual influence

Shorter Oxford English Dictionary

Managerial authority is a particular anathe-ma in many law firms. One chief executiverecently complained that he was not able "tobuy a box of paper clips" without deferring firstto his management committee. Even trivialmanagement actions may be debated and re-debated in committee ad nauseum until it isonly the need to get back to billing that forcessome sort of conclusion. While there are highlysuccessful law firms that have staggeringly col-legial cultures, in all too many firms decisive-ness is sacrificed in favour of consensus.

Ironically, it is precisely when decisiveness is mostnecessary, that this flaw emerges. In most firms,performance would improve if those charged withthe management of the firm were allowed moreauthority in the execution of their duties.

by Robert Millard, EDGE I N T E R N AT I O N A L

I N D E F E N S E O F

DE B U N K I N G T H E MY T H O F CO L L

RITYE G I A L M A N A G E M E N T

11

DOMINANCE

Beneath the collegiality and mutual respectthat underpins most professions lies a simple fact:Like most commercial enterprises, the most prof-itable firms seek single-mindedly to dominatetheir markets. Dominance is different in law than,for instance, the accounting profession where agreat deal of the global business is focused in ahandful of mega-firms. Even the largest global lawfirms have only a fraction of the number of feeearners of one of the ‘Big Four’ accounting firms.

What dominance means in the legal profes-sion is a three dimensional strategic focus onbeing one of the top firms (usually one of thetop three) in selected practice areas, in selectedgeographical markets, and serving selected

clients or categories or clients. In their quest fordominance, the top firms ruthlessly strip keyexpertise out of their competitors, bolsteringtheir own capacity and increasing their marketshare. Size is an important issue in achievingdominance, simply for its own sake and also the

depth and scale that it allows in service delivery.They operate at the cutting edge of innovation,finding ways to deliver commodity services at

finding ways to deliver commodity services at ever lower cost, eventually driving less efficient competitors out of the market. They developnew services or client strategies that competi-tors cannot easily match. Not just incremental


Beneath the collegiality and

mutual respect that underpins

most professions lies a simple

fact: Like most commercial

enterprises, the most profitable

firms seek single-mindedly to

dominate their markets.

improvements, but also truly new stuff thatchanges the ‘rules of the game’ for all players.They are intolerant of sub-standard perfor-mance and inefficiency, either on the part ofindividuals in the firm or unprofitable practiceareas. They know where their strengths lie andhow best to play to them. They also understand their limitations and design strategies that min-imize their impact.

Ruthlessness may sound like an extremeterm, but it is entirely appropriate. It is appliedwithin the context of a high standard of ethics,professional respect forpeers and the collegialityof the profession, but itis ruthlessness nonethe-less. Like Olympic ath-letes, the top firms real-ize that winning doesnot imply unsporting orunethical behaviour. Insport, winning is the veryessence of sportsman-ship and one doesn’t getvery far without beingpre-occupied with it.Likewise in business, apre-occupation withwinning has become aprerequisite for a place at the top end of the mar-ket. Whether this is "fair" or "just" is irrelevant. Itis a fact of life. Across the world, in all sorts ofindustries and professions, the softer, nicer firmsare in trouble. Sometimes deep trouble.

Imaginative and focused managementwith real power and authority is a criticalingredient in successful firms, especially intoday’s markets where key sources of competi-tiveness can change in weeks. It simplyrequires practice managers that are competent,skilled and trusted, with the power and author-ity to drive the implementation of the actionsthat the firm agrees are necessary to achieve itsstrategy within parameters that are also deter-mined by the firm.

BALANCING PROFESSIONAL AND COMMERCIAL INTERESTS

Some have said that lawyers resist man-agement simply because they are inherentlyconservative and pathologically independentand self centered. This is a myth. Firstly, thesetraits certainly do not accurately describe allsuccessful lawyers. Secondly, they exist in equalmeasure in other organizations, where manage-ment is effectively applied. Furthermore,lawyers happily subject themselves to theauthority of their peers in the way that they

practice. So why do somany firms struggle toapply the same level ofexcellence to imple-menting managementactions to execute theirbusiness strategy thanapplies to the profes-sional advice theydeliver to clients?

The truth is: manylawyers experience dis-connect between thedemands of their pro-fession and the com-mercial demands of

their firms. On the one hand is the professionaldemand for altruism, neutrality and a clientfocus that surpasses monetary considerations.On the other hand is the need to operate abusiness in a highly competitive market, toproduce decent financial rewards for the firm’slawyers and staff. Like most professionals,lawyers act within two simultaneous, very dif-ferent paradigms. In the professional para-digm, they make their own decisions, applyindependent judgment and operate withoutmanagerial control. In their commercial para-digm, managerial control is essential to theoptimize profitability and competitiveness.Different rules apply to implementation ofbusiness strategy, as opposed to professionalpractice. The challenge is to transfer the willing-

12


n law firms the resources

being managed are people, not

raw materials, machinery or

production lines. When it

comes to managing people

directly, management and

leadership often blend into

one.

I

ness to submit to peer authority that exists in theintellectual, professional practice paradigm, to awillingness to submit to management authority inthe action oriented focus of the commercial para-digm. There are four key issues that a firm needs toconsider, to get this right:

Present managerial power in the commercialparadigm, in a context that clearly supportsthe ethics and norms of the professional paradigm. ("We need to do this in order to better serve our clients," rather than "we justwant to make as much money as possible.) When playing "hard-ball," it is even moreimportant than usualto have a clearly de-fined ethical road-map.

Ensure that the link-ages between man-agerial power and thefirm’s "bottom line"are unmistakable.Lawyers, being h u m a n , a r e n o tentirely altruistic.Personal income, the trappings of success andbeing part of a successful firm are very impor-tant too. So is simple human competitive spirit. Winning just for winning’s own sakeis not only good for morale but an importantingredient in sustaining dominance.

Ensure that the systems in place in the firmsupport management authority. It is point-less paying lip service to this, while managerialcontrols conflict with the way people are REAL-LY encouraged to behave. The quickest way todestroy effective management in the firm is toallow some (usually more senior) lawyersexemption from management authority.Management authority needs to be builtinto the very fibre of the firm’s culture, to beeffective.

Ensure that managers are leaders too. Thereis much debate in business literature aboutthe differences or similarities between the twoin general business. In law firms the resourcesbeing managed are people, not raw materials,machinery or production lines. When it comesto managing people directly, management and leadership often blend into one. Managers(as opposed to administrators) in law firmsneed to have the personal qualities and skillsthat are respected and valued by the lawyersthat they manage.

Managerial con-trols in law firms needto be empowering, notb u r e a u c r a t i c .Management bureau-cracy widens the gapbetween the profes-sional and commercialparadigms even fur-ther. It is self defeating,eroding motivationand performance.Formal, standardizedprocedures are onlyjustified as risk man-

agement tools, where their absence can placethe firm in danger. Bureaucratic controls alsoraise the transaction costs of doing business,often to the degree that their costs outweightheir benefits.

One of the most effective ways of achiev-ing business goals in a professional servicefirm is simply to ensure that everybodyknows what the firm is trying to achieve, andwhat each person’s role is in achieving thosegoals. Management authority then becomesfocused on removing obstacles to individualsbeing able to achieve their own personal tar-gets or actions, and on defusing situationsthat arise that work against the agreed busi-ness goals.

13


Management authority

needs to focus only on those

areas of the firm where specific

discipline is required, in order

to meet both commercial and

professional goals.

●

●

●

●

Management authority needs to focus onlyon those areas of the firm where specific disci-pline is required, in order to meet both com-mercial and professional goals. Areas such asachieving superior client satisfaction, attractingand retaining top people, knowledge sharing,financial discipline, innovation and businessdevelopment. They make sure that action ori-ented programmes are implemented to drivethese issues.

The best firms avoid direct, overt controlswherever possible. Rather, they develop equallyrigorous but subtle and intangible controls,based largely on social integration, teamwork,and comradeship. The controls rely on twobasic premises:

Shared efforts are the best way to achieve individual goals such as personal prosperity,professional self actualization and personaldevelopment

The firm will reward actions that promote these shared efforts, as long as they are legaland ethically sound, and punish actions thatwork against them

Lawyers derive a great deal of their senseof self worth and of community from theirfirms and their practice groups or other firms.They spend far more time with their col-leagues than their spouses and families, letalone the rest of their communities. Corporateespirit de corps, the satisfaction derived fromteamwork, pride in their professional practiceand a job well done are therefore the primarydrivers of the typical lawyer’s self worth.Insofar as managerial authority supports anddrives these sources of self worth and commu-nity, therefore, lawyers can be persuaded toaccept them.

CONCLUSION

Identify those areas of your firm wherespecific managerial control is required; whatneeds to be done to achieve and sustain domi-nance in your chosen geographic market, areasof practice and selected clients. In that way,management authority will be properlyfocused.

Find people that are trusted, capable,skilled and willing to drive the implementationprocess. Empower them with the authority andpower to achieve their mandate. Hold themaccountable and reward them for achievingresults and then get out of their way while theyget on with it. In that way, managementauthority will be effective.

Ensure that the social interactions andcontrols that are required to make certain thatagreed corporate goals prevail over, but arealso compatible with, personal agenda. Weavethem deeply and inextricably into the fabric ofthe firm’s culture. In that way, managementauthority will be sustained over time. It willalso become a source of competitive advan-tage that competitors will find very difficultindeed to replicate.

Robert Millard is the partner in Edge’s office in

Johannesburg, South Africa. His practice is currently

focused mainly on assisting firms in that country with

the major strategic realignments being driven by black

economic empowerment legislation in South Africa. He

has advised firms of various sizes in Africa, Europe and

North America on issues relating to strategy and busi-

ness development. Robert can be contacted in South

Africa on +27 82 602-2009, via Edge’s toll free numbers

or by email at [email protected].

14


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BOILERPLATE?

Competitive advantage means getting out in front, by focusing

on those areas in which you can be unbeatable. By definition,

if you are doing what everyone else is, you don’t have an

advantage. Do you have the courage and the foresight to see

beyond what everyone else is doing?

If you’re ready for someone to get results; to ask the really

hard questions – the questions that lead to marketplace dis-

tinction; and someone who will not compromise in ensuring

that implementation is an integral part of each step in the

formulating of a truly competitive strategy…you may be ready

for our for our BREAKAWAY® program.

Alternatively, if you’re just interested in a boilerplate strate-

gy, they are all pretty much the same. If you’d like one for

your bookcase, we will happily tear off the cover of one we

have, duplicate the contents and forward it to you, complete

with your firm’s name inscribed on the front.

BOILERPLATE?

HowHow

Different is what you are doing right now – the strategies that

you are employing – from the key competitors in your market-

place? If your answer is "not much" then how are you expect-

ing to surpass their performance?

"Not much" is usually attributable to some boilerplate strate-

gic plan created by some brand name consultants. It comes

packaged as a fairly weighty tome (at a fairly hefty fee). It

contains mystic thoughts unsullied by any methodology for

achieving meaningful differentiation, insights on creating new

revenue streams, has no means of implementation, and is ulti-

mately destined to find it’s resting place on the managing

partner’s bookcase.

by Gerry Riskin, EDGE I N T E R N AT I O N A L

MISTAKES MANAGING PARTNERS MAKE

16

Mistakes Managing Partners MakeManaging a law firm can be a

mixture of both the delight and frustra-tion generated from working with bril-liant practitioners. As a former manag-ing partner, I can empathize with yourlack of resources, especially time. Thelessons in this piece were learned by myown experience and by watching someof my very gifted counterparts over theyears. My hope is that these lessonslearned can help you, as a managingpartner, avoid a sand trap or two. If youhave any additional suggestions, I wel-come and appreciate them.

There is an enormous amount ofwasted effort being expended by those

involved in the management of theirfirms. You can decide for yourself whetherany of this applies to you. If it does, thenyou may want to plug the holes throughwhich your valuable time is rushing likepotable water from the reservoir.

I know you are smart and thatyou grasp concepts before they arecompletely formed in the mouth ofthose addressing you. I know thatyou know your environment inti-mately—you grew up in it (or one nottoo different from it). And, you knowyour people—oh, how you know yourpeople—like family members; you areaccurate to within a thousandth of a


Quantum

Mechanics

Physics 101: an

area of space-

time with a

gravitational

field so intense

that its escape

velocity is equal

to or exceeds the

speed of light.

Yes, that’s

administration

all right.

millimeter in predicting the idiosyn-cratic responses of almost every indi-vidual to every kind of issue or prob-lem or initiative. In fact, you under-stand the complexities of your envi-ronment so well that you have cometo accept progress at an extremelyslow pace. You have settled for mov-ing in the right direction even if youare moving at the pace of a turtle (infact, some settle for simply fending offa decline). You probably feel you aredoing the best you can at enormouspersonal sacrifice.

The following will identify areaswhere many managing partners runinto challenges at the opportunitycost of progress. Do any of theseapply to you?

CONSUMED BY ADMINISTRATION—THE BLACK HOLE OF THE LAW FIRM.

Quantum Mechanics Physics 101:an area of space-time with a gravita-tional field so intense that its escapevelocity is equal to or exceeds thespeed of light. Yes, that’s administra-tion all right. And yet, administrationis essential for the financial health ofthe firm. The challenge here is not tojettison the financial discipline oftasks like great accounts receivablemanagement but rather to get it offyour desk. That’s why they call the

17

MISTAKES MANAGING PARTNERS MAKE

18

head of admin an "administrator."Let your administrator do it. You canbe alerted when something is out ofwhack (and it will be). Then you canguide, coach or instruct but don’tbecome the administrator. There isno limit to the appetite of the beastthat is administration. Keep your dis-tance or expect to be the Black Hole’svictim. You’ll know you are in troubleif you are too busy to "manage" yourfirm’s performance. Performance isabout your people becoming evermore valuable, working in teams,sharing knowledge and attractingbetter work. That’s where you canmake a real difference.

INVEST TIME TO PROTECTYOUR MARKETING STAFFFROM YOUR PARTNERS

You read that correctly. It’susually just a question of time,isn’t it? When the honeymoonends, the partners find fault likekids find ice cream. They don’tlike the new logo…they think thead was a mistake…they felt thewriting on the environmental pro-posal was not of the quality com-mensurate with the great institutionthey believe their law firm to be.

Unless you do something to man-age it, marketing professionals andlawyers quickly develop a toxic rela-tionship. You are either a lawyer oryou are not, but what is a marketingprofessional? Could be anything,really…a promoted secretary who dis-played an aptitude…a PhD with expe-rience at a Fortune Top 100 compa-ny…a talented professional with ashining background marketing prod-ucts, not services…or a young, ener-getic individual recently graduated

with an MBA who entertains dancingvisions of potential that will trans-form your firm.

As lawyers, what do we do? Weuse precedent to solve and preventproblems. We do what worked beforebecause that is how we gain a measureof certainty; marketers do what hasnever been done before becauseunless a message is imaginative, it willnot be heard above the noise of themedia. Lawyers do things they know

will likely work, whereas marketers trythings without knowing at all whetherit will work and spend resources totest the approach. The lawyer wantsto know who has done it before andthe marketer wants to make sure thatno one has ever done it before. Themarketer is creative; the lawyer is crit-ical and analytical. (This is not aninsult, by the way. It is fabulouslywonderful for lawyers to be criticaland analytical, but that mode ofthinking mixes with creativity like oilmixes with water.)

Some of the marketing profes-sional’s relationship with your part-ners has the potential to be quite chal-lenging, again, unless you manage it."Managing it" in this context meanstraining your marketing staff to facili-tate in its interactions with yourlawyers. Lawyers need choices—options. The marketing professionalis an internal expert consultant, butwhat some marketing professionalsnaively ignore to their detriment isthat lawyers are frequently called

upon to pit one expert againstanother, and sometimes they dothis for sport. The marketing pro-fessional must learn what the bull-fighter knows only too well: thatyou need to get out of the waywhen the bull takes a run at you.Making a single recommendationto a lawyer leaves no options. Therecommendation might havemerit but when you are cautiousand trained to see the risks—thedownside—how likely is it thatthe recommendation will be gladlyaccepted? Offer a choice betweentwo such recommendations, andone will be preferred over theother. Add two parts "listening" toone part "facilitating" and the mar-keting professional can fly above

the clouds of doom that hover overmost of their counterparts.

MANAGING BY MEMORANDUM(OR, TOSSING STARDUST IN THEAIR).

Managing is not about the forceof great reasoning. You can have thebest plan in the world—the envy ofintellectual giants—flawless, com-pelling, inspired, even poetic. You canthen communicate that plan in a memothat is terse and efficient or with prose

If you stop one of those par-

ticipants on the way out the

door and ask, "So, what will

you do differently as a result

of those delicious delibera-

tions?" watch the facial

expression change into that of

a stunned and bewildered

puppy seeing something for the

first time.


that would make Pulitzer notice. Andwhat will that get you? (That plus $4will get you a cappuccino at Starbucks.)

People are not motivated by theirminds, they are motivated by theirhearts. Their minds will scan for flawsand weaknesses, especially when theirhearts are not in the plan. Win theirhearts and their minds will obedient-ly follow.

Therefore, take the memorandumout of your management toolbox. Amemorandum can effectively trans-mit essential information (numbers,facts) but it cannot manage.Management happens one-on-one,face-to-face. If your firm is too big foryou to interact with all your people withsufficient frequency then you probablyhave group heads, department heads oroffice heads who need to be taught thesame lesson and follow suit.

MANAGING BY CONCEPTUALSTIMULATION—A DELICIOUSCEREBRAL FEAST.

Welcome to the stereotypical part-ners’ meeting. The insatiable cerebralappetites gather round the table andsomeone begins with the courage to assert

an idea. In the absence of rules ofevidence and a presiding judge, thatidea won’t make it 18" out of the mouthbefore someone else draws their cere-bral sword and cuts a swath neatlythrough the heart of that idea. It is quiteglorious to behold such skill and talentat a full gallop. The meeting ends andthe participants’ cerebral appetite seemsto be satisfied. If you stop one of thoseparticipants on the way out the doorand ask, "So, what will you do differ-ently as a result of those delicious delib-

erations?" watch the facial expressionchange into that of a stunned andbewildered puppy seeing something forthe first time. "Do?" is usually the reply.

I hope it is clear that the alternativeto managing by conceptual stimulationis managing by action. Deliberationsare all well and good but only if theylead to specific action or a consciousdecision not to take any.

Action does not follow naturallyfrom arguing. Arguing (or debating, assome would genteelly put it) polarizes,making it difficult to decide what actionis appropriate, at least without theapplication of force. The objective is tomaintain a constructive dialog and neu-tralize, or prevent, arguing. Some veryeffective managers accomplish this bycreating ground rules for discussion.New ideas will be protected until theyhave been fully vetted and mined forpotentially useful components. Whenappropriate, others are welcome to gener-ate options and alternatives. (If I have con-cerns about opening an office in Timbuktuthen perhaps I need to suggest alternateways to meet our growth objectives.)

Your most powerful weapon toavoid excess debating in your meetingsis the art of raising the level of abstrac-tion until there is agreement. For exam-ple, two individuals are debating thewisdom of continuing to sponsor asymphony orchestra. One argues thatthere is no return, the other argues thatthe benefits are tangential and unobvi-ous but are definitely there. Raising to ahigher level of abstraction means focus-ing the group on the nature of benefitsthat the firm might be trying to achievein doing something of this nature (com-munity profile, creating an image ofbeing supportive of the arts, generating

business directly, etc). With a flip chart,a group can generate a decent list in afew moments. Now the discussionmight be moved to the generation of alist of options (if we don’t sponsor thesymphony, then what?). Another list iscompiled in a few moments. Finally,perhaps a list of options as to how thebenefits of a particular tactic (like spon-soring the symphony) can be mea-sured? Now the appropriate sub-groupresponsible for execution can be instruct-ed and authorized to interim action, theresult of which is designed to make thedecision easier—perhaps even obvious.

CONCLUSION:

Unfortunately intuition andtechniques perfected by you as a prac-ticing lawyer may have to be re-evalu-ated in the management context. Ihope that the identification of thecommon mistakes in this articlemight be of some assistance to you.If you have identified other mistakesManaging Partners make, I wouldappreciate your sharing those withme at the email address below..

Gerry Riskin is a former Managing Partner

with a truly global practice and has con-

ducted retreats for law firms and associa-

tions of law firms around the world. Gerry

is the co-author of Practice Development:

Creating the Marketing Mindset,

Herding Cats and Beyond Knowing" and

the creator of the acclaimed audio produc-

tion Successful Lawyer®. Gerry resides in

Anguilla, BWI, and can be reached by

email at [email protected]

19

20

"I don’t know. That’s what we’vealways done."

If so, you’re ahead of the game. Forin reality, many firms dare evenapproach detailed questions abouttheir operations.

Why does it take a week to get aconflicts search? Why aren’t we actually

ries or celebrating annual events orcommemorating special anniversaries,but in the cutthroat world of legal prac-tice, tradition can produce a swift slidetoward stagnation.

To avoid such stagnation and spurinnovative change, consider perform-ing an operational review. Have thecourage to ask why. Investigate the nitty

using our new technology? Why can’t Iget bills out of our system that ourclients can use? These are all excellentquestions. Sadly though, most wouldbe answered by the same tokenresponse, "I don’t know. That’s whatwe’ve always done."

Tradition serves a wonderful pur-pose in creating fond holiday memo-

LOOKING UNDER THE ROCKS: THE COMPETITIVE ADVANTAGE OF THE OPERATIONAL REVIEWS

by Karen MacKay, EDGE I N T E R N AT I O N A L

UNDER THE ROCKS:

THE COMPETITIVE ADVANTAGE OF OPERATIONAL REVIEWS

Have you ever paused to ponder the operational intricacies within your firm?

Have you ever been frustrated by the areas that support your practice? Have you ever

wondered exactly how things get done? Does the following phrase sound familiar?

21

gritty details of how things are beingdone and discover ways of doing thembetter. Practicing law is difficult andincreasingly demanding. Clients expectnothing short of perfection. As a result,innovation and efficiency are increas-ingly key characteristics of successfullaw practices. They have become neces-sary for survival. Competitive advan-tage is all about doing something yourcompetitors cannot easily copy.

So how do firms create inno-vation and produce efficiency?They must first observe and evalu-ate the forces that influence opera-tions within their firms.

EXTERNAL FORCES

Clients drive law firms. Legalexcellence builds a law firm’s repu-tation. Interpersonal skill buildsclient relationships. Yet, no matterhow well firms develop their repu-tation or build their client base,details still matter significantly.

As mentioned, the practice of lawhas become increasingly competitive.Large firms are encouraged to focus onsignature clients. These signature clientstell us they continue to reduce thenumber of law firms on their roster. Asa result, law firms are under pressurelike never before. Copy centers mustproduce flawless documents.Accounting must provide invoices thatare useful and meaningful to clients.

This is significant because in addi-tion to impeccable quality, perhapsmore than any other benefit, clientscrave value – and on their terms. Iffirms fail to quickly resolve conflict orsteadfastly check errors, client percep-tion of value slips and frustration soars.Value is measured at many steps along

what we call the "Client’s Value Chain®" Along these steps, clients are able tomeasure the value of the service theyreceive from outside counsel. Thishelps to determine how satisfied clientsare and how to increase their percep-tion of value.

The Client’s Value Chain® beginswith Instructions. If firms can’t get aconflicts report that is meaningful andtimely, instructions can’t be taken and

clients may go elsewhere. Properengagement letters and specific finan-cial arrangements help officially estab-lish the lawyer/client relationship anddispel any ambiguity. Next, theTransaction involves the lawyer orteam of lawyers working closely withthe client. Here, value is measured bythose interactions and by the quality ofthe advice given. Deliverables is wherefrustration can especially mount if thet’s aren’t crossed and the i’s aren’t dot-ted. Billing must be timely, perfect andmeaningful. Clients need useful infor-mation. For example, one generalcounsel told us that law firms will soonlose the work if they fail to provideinvoices that can clearly be charged tothe appropriate business unit – notbecause of the quality of the legal workbut because of the frustration arisingfrom the billing system. "There are lots

of good lawyers out there–that’s a given;it’s the other stuff that makes us crazy."These are a few of the stages whereclients consciously or unconsciouslymeasure value. Operational issueswon’t get you on the roster of a newclient, but they certainly can put you offthe roster of an existing one.

These issues also work together tocreate an impression of the legal ser-vices provided. What impression are

you creating? Clients often will"automatically" label as a goodlawyer that articulate, engaginglawyer who can wow the crowd insocial settings. This is based onperception rather than fact–a con-clusion reached by observingother factors. Similarly, if theprocesses discussed herein fail tomeet client expectations, clientslikely will label your legal skillsnegatively as a result. Poor perfor-mance even in the simplest mat-ters transfers to an opinion of

poor legal skills. "They can’t even sendme a bill that I can use, how can theymanage my file?"

INTERNAL FORCES

Stagnation is compounded byinternal influences as well. Internaloperations affect everything from prof-itability to morale and everything inbetween. Along the same client valuechain above, firms are able to dissectoperations within the firm to createmethods to improve functional effi-ciency. If some functions, especiallyback office functions, can be performedmore efficiently while still being com-pleted accurately, more money flows tothe bottom line and into partners’pockets. This keeps clients satisfiedwhile simultaneously producing happi-er, wealthier partners.


perational issues won’t

necessarily get you on the roster

of a new client, but they certainly

can put you off the roster of an

existing one.

O

22

Of course, producing happier, wealth-ier partners is only one aspect of internaloperations. Law firms often become stag-nant by applying the same tired solutionsto every dilemma to cross the path. Forexample, hiring people is rarely the mostprofitable quick fix to a problem, but thissolution is a typical knee-jerk reaction tostress within law firms.

Wisely, clients tell us that to add anassociate to a practice group, managingpartners typically require a businesscase—a report that includes suchdetails as billable hours of everyonein the group, new client work, esti-mates of the hours and level of talentrequired to handle the new work,and a recommendation for a newhire. But when an administrativegroup needs a new hire, businesscases often boil down to a simple cryfor help, such as, "the group is busyand can’t keep up with demand."

Further, I hear many times thatfirms have smartly invested in newtechnology to automate existingprocesses but then fail to use thetechnology to actually change theprocess at all. We have witnessed firmsretain high-tech automated systemswhile still utilizing the comfortable butinefficient outdated paper systems ofthe past. Such glaring inefficiencies area sure sign of stagnation.

PRIORITIZING OPERATIONAL FORCES

Law firms must bring togetherthese internal and external forces with-in their organization to begin to con-

sider the possibilities of how to createchange. Operational functions of anylaw firm involve three distinct sets ofareas of consideration that work togeth-er in a way that impacts the overalleffectiveness of a law firm.

CLIENT SERVICE

Client service issues are theabsolute first priority. These issues com-prise the external forces that influencelaw firm operations. Most firms must

meet at least some minimum standardof client service. However, most firmsalso fail to define these standards.Client service standards vary by individ-ual lawyer, by practice area and/or byoffice. Regardless of the variance,though, law firms absolutely mustdeliver on this issue.

POLITICS

Political issues influence the peo-ple and work within the firm, which inturn, influence the client. These issues

comprise many of the internal forcesthat influence law firm operations.Here, turf wars between functional areasof administration and issues amongoffices within the firm create frictionthat can plummet morale and produc-tivity. Law firms must prioritize politicalissues before they get passed down toclients in the form of poor service.

EFFICIENCY

Lastly, efficiency issues impactboth client and political issues.Efficient improvements amongpolitical issues translate into bet-ter client service. And thoughrenewed efforts at efficiency mustbe monitored carefully withinclient services so that clients don’tthink they are being cheated orthat firms are cutting corners,more effective use of time andresources also produces better ser-vice. Further, partners immediate-ly reap the benefits of cost savingssince those savings immediatelypass through to them. Partners aredeterred from increased effortwhen that effort fails to produce

results that translate to the bottom line.Thus, increased efficiency improves allaspects of operational functions.

A FRESH SET OF EYES

So how do you generate newideas when the firm has a loyal andlong-standing management team?Bring in someone new. To enactchange, observers must evaluate theaforementioned issues and influenceswithin a law firm. We have found that

LOOKING UNDER THE ROCKS: THE COMPETITIVE ADVANTAGE OF THE OPERATIONAL REVIEWS

nnovation and efficiency are

increasingly key characteristics

of successful law practices.

They have become necessary for

survival. Competitive advantage

is all about doing something

your competitors cannot easily

copy

I

to produce optimum results, the facili-tator must be knowledgeable, unbiasedand willing to make changes. You don’thave to fire people to generate newideas. Switch people around. Seekinput from knowledgeable peoplewithin the firm. Or, hire an outsideconsultant. An outside perspective canbring the depth of knowledge andbreadth of perspective to the issuesfirms must address in order to success-fully compete.

According to Dennis Sherwood,author of Unlocking Your Mind: A practi-cal guide to deliberate and systematic inno-vation, deliberate innovation is morethan a simple glance around.Deliberate innovation is a process. Wehave recently been engaged by severallaw firms to perform operational stud-ies. In one case, the firm was strugglingwith executing its strategic plan andwanted to determine how operationsmay be inhibiting achievement. Inanother, the firm chose to tackle theabyss of conflicts and records manage-ment. In still another, a growing firmwanted to set up a new structure to sup-port the professional staff.

In all of these cases, innovationbegins by documenting existing pro-cedures. We look at the life cycle of aparticular process in the firm. Wethen seek input on that process fromvarious stakeholders in the firm.Some will be directly involved; othersmay remain uninvolved but will haveobserved the process; still othersshould have been involved from thebeginning but never have; and others

are consumers of the service. Thepower of observation produces the"how," then analysis leads to "howcan it be different?" It takes courage torecognize the problem and the poten-tial benefit of change, but the realmagic is in asking how things can bedifferent, and then acting on thatinformation.

BENEFITS OF OPERATIONAL REVIEWS

A fresh set of eyes

New ideas

Benchmarking against ideas from other firms

Confirmation of thinking

Validation of ideas from within thefirm

Alleviation of political tension by seeking outside advice

WHAT YOU CAN DO

Systems and processes evolve overtime. They are the result of ideas gen-erated by individuals over the history ofthe firm. They are "the way things aredone around here."

Many challenges create roadblocksto innovation and change. First, theday-to-day pressures of keeping up withthe workload absorb the time neededto stop and challenge the process.Second, pride of ownership, fear andego prevent us from questioning our-

selves with the same rigor as we ques-tion others.

So, to encourage an environmentof innovation and efficiency, be coura-geous. Allow others to ask tough ques-tions. Be willing to invite in an outsider.Someone may end up stepping onsome toes. Someone may develop abrighter idea. But in the end, the profitof innovation and efficiency derivedfrom a thorough operational reviewwill soften any hurt pride.

Karen MacKay is a Partner in Edge

International. Her practice has evolved

around people and operations, in partic-

ular growth, support and development

of the professional staff, business plan-

ning and operational reviews. She is a

skilled and popular retreat facilitator.

Myers Briggs qualified and a Certified

Human Resource Professional, Karen

earned her MBA from the Rotman School

of Management at the University of

Toronto. Karen can be reached by

email at [email protected].


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23

24

SUCCESSION PLANNING

Yet, is it even realistic to believethat succession planning can work ina professional service firm? The clas-sic corporate model of successionplanning -- having a designated suc-cessor for each position -- is certainlyunrealistic in the partnership setting.In most firms, leadership is elected bythe partners who notoriously insur-rect against any action viewed as dis-enfranchising their prerogatives. Sostrong is this defense of partnershipdiscretion, that many firms havefound the label of "designated successor"

All of a sudden, succession plan-ning seems to be on almost every pro-fessional service firm’s managementagenda. In part, this interest in succes-sion planning results from babyboomers (the largest segment of oursociety and the generation of mostfirms’ management) reaching an agewhere they are confronting their ownmortality. In part, it may result fromfirms having grown, and often invest-ing increasing authority and manage-ment responsibility in individual part-ners while relying less on committeesthan in the past. Perhaps it is that theyhave seen first-hand with their clients,

the disruption caused by the suddenloss of a leader in a closely held com-pany, or that they remember whenmuch of Dow Lohnes & Albertson’s (asuccessful Washington/Atlanta law firm)management died in a tragic plane crash.

For many firms, the sudden loss ofa leader could be devastating. And theloss need not be death. Each year, wesee firm leaders step down due to dis-ability, or accept a management posi-tion with a client or even move lateral-ly to another firm. Being able to rapid-ly identify a qualified successor maydetermine a firm’s survival.

You are a partner in a large law firm with a well known and widely

respected managing partner. One day, the managing partner dies of a

sudden heart attack. Walking out of the memorial service, the General

Counsel of the firm’s largest client and a close friend of the managing

partner pulls you aside and asks, "Now what?"

FINDING NEW LEADERSHIP: SUCCESSION PLANNING FOR PROFESSIONAL SERVICE FIRMS

FindingNew Leadership:Succession Planning for Professional Service Firms

by H. Edward Wesemann, EDGE I N T E R N AT I O N A L

to be the kiss of death for anyoneaspiring to firm management. It isdifficult to envision a firm with anemergency backup leader already inplace – one capable of stepping into amanaging partner’s shoes on amoment’s notice and in a way wherepartners barely notice and the firmscarcely misses a beat.

Perhaps the limits of successionplanning for professional service firmleaders, really lie in what many suc-cessful firms have done instinctivelyfor years -- creating a pool ofpeople who have the basic skills,abilities and knowledge to beconsidered for a leadership posi-tion. If so, then succession plan-ning involves understanding thebasic traits necessary for leader-ship, identifying people withthose traits, and providing themwith the necessary skills andknowledge to assume a leadershipposition.

For most people, leadership is atrait that must be observed. That is,they know it when they see it but havedifficulty describing the specific traitsthat comprise a good leader. Weknow that effective leaders tend to bearticulate, yet some highly effectiveCEO’s are horribly inarticulate.Conventional wisdom tells us thatleaders tend to be empathetic, butmany strong leaders are aloof. Logicwould dictate that the best leaderswould possess experience in a lesserposition. Yet, we often see new man-aging partners and practice groupleaders plucked from obscurity andstill marvelously successful from dayone.

WHAT NEW LEADERS SAY

To better understand successionplanning, we decided to interviewpeople who have lived through theprocess. We spoke with 21 law firmpartners and three accounting firmpartners who became the managingpartner (or equivalent title) of theirfirm within the last five years andasked them what features wouldhave most helped them as part of asuccession planning program. Theiranswers were remarkably similar.

1. RELATIONSHIP-BUILDING.

A major role of leaders in most pro-fessional service firms is the abilityto build consensuses. In all but afew firms, partnership decisions arereally made through consensusrather than majority vote. In fact,many firms take pride in rarely, ifever, taking actual votes and, if theydo vote, the result is always unani-mous. This means that, in order tolead, managers must be able to iden-tify and sell courses of action theentire firm can accept. This is apolitical process based on relation-ships between the managing partnerand individual members of the firmwho can influence other partners.Relationship-building takes time, anda managing partner who has failedto create at least a base of strong rela-tionships prior to ascending to a man-

agement position will have difficultysucceeding.

2. VISION.

Leadership and vision are virtuallysynonymous. In order to performthe functions of a leader, a managingpartner must have a clear picture ofwhere the firm is going and be ableto communicate the vision to others.Experienced leaders explain that thevision does not have to be new orinnovative. In fact, it is often easier

and more powerful to convey aconsistent vision with that of theprior manager. But many man-aging partners warned that anew leader doesn’t have time tocobble together a vision afterthey are elected, and a "fuzzyvision" threatens to make theleader ineffective in every othera r e a o f t h e i r m a n a g e m e n tresponsibilities.

3 CULTURAL APPRECIATION.

One of the biggest surprises to newmanaging partners was that theyfailed to fully understand and appre-ciate the importance of the firm’s cul-ture. One of the difficulties is thatmost new managing partners entertheir position from other areas orpositions within the firm, such aspractice group chair or office manag-ing partner. As such, their under-standing of the firm’s culture is basedonly on a single segment of their orga-nization, which, like the blind mantouching an elephant, can be deceiv-ing. Several of the managing partnerswe spoke with felt that some of theirbiggest mistakes resulted from a mis-understanding of the culture or fromassuming that every practice group oroffice shared the same culture.

26


t is difficult to envision a

firm with an emergency backup

leader already in place…

I

4 ELECTABILITY.

In talking about succession, onecommon theme among managingpartners is that sometimes good can-didates for management positionsexist within the firm but are simplyunelectable. Electability is difficultto identify and in many firms is con-stantly shifting. In part, it is based asmuch on the absence of a negativeimage as it is on the presence of apositive perception in the minds ofmost of the partners. As onemanaging partner said, "a partnerwho wants to be managing part-ner can’t be too much of a reluc-tant bride but yet can’t seem to beoverly eager for the job either."

5 PERSONAL ISSUES.

Almost every managing partner,upon entering their position, wasplagued with uncertainty aboutthree issues:

COMPENSATION. Most often, new-ly elected managing partners are paid the same compensation theyreceived prior to their election. But, even though the managing partner is expected to give up much of the practice on which his or her compensation is based,there are rarely any clear objectivesestablished or bonus criteria set. As a result, successful attorneys, accustomed to controlling their compensation destiny through their performance, become, as one managing partner put it (paraphrasing Blanche DuBois) "dependent upon the kindness of strangers." This causes anxiety, especia-ly in situations where the new manag-ing partner’s compen-sation history is significantly

higher or lower than his or her predecessors.

PRACTICE TRANSITION. A second area of anxiety stems from what will become of the attorney’spractice. In slightly more than half of the firms we spoke with, the managing partner’s roll is expected to be full-time. In theother half, the managing partner is expected to maintain some practice. Frequently, the mix was

anticipated to be 50/50, but mostmanaging partners say that a one-third/two-thirds mix is more realis-tic. For a partner with a significantpractice, the transition of handingoff their practice to others withoutlosing the client is difficult and stressful. Making the process evenmore complex is the fact that manynew managing partners attempt tomaintain a connection to the clientas a security blanket for future uncertainties.

EXIT STRATEGY. Closely relatedto both the issues of compensationand practice is what will happen tothe new managing partner when they eventually voluntarily or invol-untarily leave the position. This isespecially difficult in a firm wherethe managing partners have tradi-tionally been older when elected

and retired out of the position. Asyounger partners enter management,the reality of having to re-enter their practice becomes an impor-tant personal issue, involving notonly compensation guarantees butalso the ability to update rusty practice skills.

COMMONALITY AMONG FIRMLEADERS’ BACKGROUNDS

In the process of our conversa-tions, we could not help but noticesome areas of commonality amongthe managing partners with whomwe spoke. All of the managing part-ners were in the age range character-ized as baby boomers (age 40through 59). All but two were male,yet when we raised the question ofwhether a woman would be disad-vantaged in the pursuit of a man-agement role, most believed that

there was a better-than-even chance thattheir successor would be female. Severalnoted that women might possess bettertemperament and stronger groupdynamic skills than men. All but onehad served in a significant managementrole prior to their election, and threehad served in a designated successortype of role. All of the accounting firmmanaging partners and all but four ofthe law firm managing partners were"lifers" with their firm or with a firmthat merged into the current firm. Thefour who joined the firm as laterals, didso as associates.

A WORKABLE SUCCESSION PLAN

It does not take a great deal of studyor observation to conclude that the onlyeffective means of creating a successionplan for professional service firms is to

27


●

●

●

a"… partner who wants

to be managing partner can’t

be too much of a reluctant

bride but yet can’t seem to be

overly eager for the job either."

create a pool of partners from which toselect future leaders. Creation of thispool involves three steps:

1. EARLY IDENTIFICATION O FL E A D E R S H I P T R A I T S

If it is true that recognition of leadership is observational (peopleknowing a leader when they seeone), there must be a means ofcommunicating that recognition.In most firms, the best, if not only,means of such identification is theassociate evaluation system. Thereis at least anecdotal evidence thatsuccessful managing partners begandemonstrating leadership as an asso-ciate. As one said, "I was always thespokesman for the disgruntled associates."

2. CREATE LEADERSHIP OPPORTUNITIES

Regardless of whether one believesthat leaders are born or made, cer-tainly leadership skills are honed.Simply identifying future leaders isinsufficient. Potential leaders needthe opportunity to build lead-ership skills, to be tested andobserved by the partnership andto build self-confidence in theirown leadership and managementabilities. It also cannot be assumedthat every attorney who displaysleadership characteristics has thedesire to be involved in the man-agement of the firm. An earlyleadership role gives the individ-ual the opportunity to test theirown tolerance for "herding kittens."

Often, the best leadership train-ing ground comes not from theformal administrative commit-

tee system many firms employ.Instead, ad hoc committees de-signed to study and eventually sell a specific initiative provide a better opportunity for new leaders. Using a mixture of asso-ciates on these committees givesfirms the advantage of early live-fire demonstrations of the assoc-ates’ capabilities, as well as, oppor-tunities for the associates toobserve a variety of leadershiptechniques and applications.

3. PROVIDE SKILL DEVELOPMENT.

The basic blocking and tackling ofmanagement and supervision in-volves some basic skills that areapplicable to all forms of business.Probably, all of these skills could beacquired by observation and the trialand error of experience, but someformal training can shortcut the timerequired for observation and expe-rience. To provide necessary devel-opment for their potential leaders,a surprising number of firms havecreated internal management train-ing programs under local businessschools.

CONCLUSION

Recently the world business com-munity saw the importance of succes-sion planning with the sudden death ofMcDonald Corporation’s CEO. Share-holder and franchisee confidence andmarket value were maintained by thecompany’s ability to name a full quali-fied successor within hours. But ascomforting as this level of planningwould be, experience seems to dictatethat the classic forms of successionplanning used by corporations—hav-ing a designated successor for every

management position—don’t work inthe real world of professional servicefirms.

This does not mean that firms canor should avoid succession planning.However, it seems clear that firms needto both create a cadre of leaders capableof being considered to assume manage-ment tasks, and remove the concernsand barriers that might cause profes-sions to avoid participation in theirfirms’ leadership.

Succession planning is not a quickfix that a firm can decide and imple-ment. It takes time to develop an effec-tive leadership program and even longerto be able to benefit from the results.That’s all the more reason to get startedimmediately.

H. Edward Wesemann is a partner in Edge

International. His practice is limited to

strategy and growth issues. Ed can be

reached by e-mail at [email protected].


28

HELPING YOUR PARTNERS TAKE ACTION

So you communicate the need for this newdirection or initiative with your partners. Youvisited with and talked to each and every part-ner. You developed a convincing power-pointon the need for everyone to adopt a change intheir behavior and presented it at the last part-ners’ meeting. Everyone was in agreement andexpressed a willingness to give it a try. You sentfollow-up e-mails. Now you sit back and waitto see the inevitable beginnings of the necessarychanges. You wait and you wait and nothingchanges; no one is behaving or doing anythingdifferently. What gives?

Your partners not only see that the old wayis now wrong, but they also have a clear idea asto what the new way is . . . right? You have madethe picture very clear and compelling. Ironically,you are now feeling that the clearer you makethe picture and the more you repeat it, the morereluctance to taking action seems apparent.

We all understand that if people don’t rec-ognize the need for change, they are not likely toembrace change. But if people see the need forchange, why would they fail to take action?

Why, even after your partners hear from theclients directly, then acknowledge the need to

form client teams, and finally agree that they eachmust invest non-billable time in delivering a high-er level of service, do they often still fail to move?

Would you believe . . . because they are verysmart and intellectually gifted individuals? I’mdead serious!

Very smart professionals recognize right offthat they cannot go directly from doing the oldhabit well to doing the new behavior well. Theyunderstand that the normal progression is thatthey will go from doing the old well, to doingthe new poorly – and that is a terrifying propo-sition – so much so that they become paralyzed.Even if you didn’t recognize it or tried to hide it,your colleagues are very smart, they know thatthat is exactly what is going to happen.Essentially, from their perspective you are tellingthem, "Follow me and let’s all do the right thingand execute it poorly." Now how appealing isthat?

Consider the situation from your partner’sperspective: how reasonable is it to venture outinto the unknown just because it might get a bituncomfortable where we are today? As strangeas it may seem, even if we cannot deny that thepast behavior is now wrong, when lacking a newdirection, we will intensify our efforts at doingwhat we do know and feel comfortable with.

Patrick McKenna

A partner in Edge and

author of the inter-

national business best-

seller, First Among

Equals.

WHY CHANGE? THE CHALLENGE OF IMPLEMENTING YOUR STRATEGIC INITIATIVES [ P a r t T w o ]

Why is it, that when partners do see the need to make changes

in their behavior, they often still FAIL to take any decisive action?

THE CHALLENGE OF IMPLEMENTING YOUR STRATEGIC INITIATIVES

by Patrick J. McKenna, EDGE I N T E R N AT I O N A L

This is the second part in our prescriptive counsel on how to get lawyers to change behavior. [PART TWO]

30

No one expects to be instantly great at some-thing they have not done before. This is part ofthe reason we don’t eagerly take up learning anew language or sport. It creates an ego discom-fort doing something new, poorly – and that dis-comfort gets amplified as we get older or morestuck in our ways of doing things. Therefore, ask-ing any professional to go from being competentto incompetent is a very unappealing suggestion.

The clearer and more compelling your argu-ment for going in a new direction or changing

behavior, the easier it is for any of your partnersto see and anticipate (because they are smart)all the various ways in which changing will con-tribute to making them look personally incom-petent or stupid. Thus, after a professional life-time devoted to being brilliant, your partnersdon’t yearn to look stupid. The clearer theimages of how dumb you will look, the less youwant to take action.

Add to all of this a potential internal culturewhere mistakes are often punished and learning

32


HOW PROFESSIONALS LEARN

Can you remember when you first learned how to play golf? Before you even approached thegame, you were still in the "ignorance" stage. You did not know how to play golf and you didn't evenknow why you didn't know how to play the sport.

When you first went out with a coach to learn, you arrived at Phase 2: Awareness. You still couldn'tplay, but because of your new awareness of the game and its components, you were consciouslyaware of why you couldn't. You may have felt overwhelmed by the skill required, but when the vari-ous skill components were broken down one by one, they weren't so overpowering. They becameattainable. Step by step, familiarity replaced discomfort.

With some additional practice and guidance, you were able to become competent in driving the golfball through recognition of what you had to do. However, you had to be consciously aware of what youwere doing with all of the mechanical aspects of the swing as well as with your body. This third phaseis the hardest stage - the one in which your people may want to give up. This is the "practice" stage.People tend to feel uncomfortable when they goof, but this is an integral part of Phase 3. Humanbeings experience stress when they implement new behaviors, especially when they perform themimperfectly. In Phase 3, you must realize that it is natural to want to revert to old, more comfort-able behaviors, even if those behaviors are less productive. At this phase, you must realize it's allright to make mistakes. In fact, it's necessary so you can improve through practice, practice, andmore practice.

Returning to our golf analogy, think of the last time that you played. Were you consciously aware of allof the actions that you went through? Of course not! Most of us, after playing awhile, progress to alevel of "habitual performance." This is the level where we can do something well and don't have tothink about the steps. They come "naturally" because they've been so well rehearsed that they'veshifted to automatic pilot. This final stage, Phase 4, is when practice results in assimilation and"habitual performance," where your productivity increases beyond its previous level and reaches anew and higher plateau.

By experiencing success and encouragement at each level, of this four-phase process, change can beexciting instead of intimidating. The bottom line: skills, competencies and attitudes improve by tak-ing one step at a time.

new skills slow to be rewarded and who wouldwant to venture into certain incompetence andprobable punishment, when you can continueto quietly reside in your existing comfort zone?From that position, you can then wait and watchto see what happens to those more adventuresomein testing the waters of the new and unexplored.

Indeed, when professionals talk about theirfirm’s "culture," they imply a certain measure ofstability and routine. Today, we reinforce thatstability with giving practice leaders job descrip-tions that prescribe in fairly concrete terms whateach leader is expected to do. There is also animplied agreement that if a fee-earner does X,and does it well, the fee-earner will receive Y incompensation and be viewed as a firm contribu-tor in good standing.

Obviously if you are to have any hope ofbreaking out of this quagmire, you must helpyour partners see, and more importantly, believein a path to take them from doing the newbehavior poorly to doing it well, as quickly aspossible. Helping your partners to gain thisbelief requires that you:

make sure that they clearly see the destination;

give them the resources and tools, or help themto quickly develop the skills necessary to reachthat destination; and

deliver positive recognition, and/or ample pro-tection, along the path.

1. CLEAR DESTINATION

What may surprise you is how often a practiceleader believes he or she has clearly articulated andpointed the way to the right direction or behavior andthen someone independent like me comes along to bethe sounding board for all of those partners who haven’tthe foggiest idea of what the expectations really are.

Consequently, you need to assure yourself, inyour leadership role, that your colleagues are clear on

where they believe the firm or group needs to go, orwhat new specific behaviors all the partners need toadopt. Both in one-on-one meetings with each part-ner, and then collectively, you need to have themdescribe to you each key element that is going to berequired and what the new destination will requirefrom them in terms of their new behaviors and skills.

The point here is that for complete comfort withthe beginnings of any change, your colleagues needto see clearly where they are going and to perceivethe implications for them, and the steps required tomake the journey.

2. RESOURCES OR SKILLS REQUIRED

The key question then becomes whether yourpartners believe that they possess the necessaryattributes to walk the new path.

What is required is to have your partners identi-fy the resources needed and whether they believethose resources are currently available within thefirm or whether they feel that they would benefitfrom some form of external support.

33


●

●

●

ery smart professionals

recognize right off that they

cannot go directly from doing

the old habit well to doing the

new behavior well. They

understand that the normal

progression is that they will go

from doing the old well, to

doing the new poorly—and

that is a terrifying proposition

—so much so that they become

paralyzed.

V

Sometimes the resources that partners needmight involve added manpower, or bringing in exter-nal assistance. In other instances, the need might befor a budgetary provision such that more non-bill-able time may be invested in learning new skills. Thismay require time invested with training, mentoring,coaching or any number of other techniques to generatethe essential knowledge and skills for mastering the newbehaviors necessary to a successful change initiative.

Keep in mind that there may be a need to fast-track your people’s skill development in order topave the path for them to feel comfortable taking anymeaningful action.

3. RECOGNITION OR PROTECTION

All of us know the power of recognition in moti-vating and moving people. There is no substitute forknowing your partners and understanding what typesof rewards they value. For some, it is quiet recognition;for others it may require drawing peer attention totheir progress. Only you can discern which motivatoris the most influential for each given individual.

The key thing to be mindful of is that your part-ners must believe that these support provisions are inplace. It is their belief that really matters, not yours.

One important mandate that resides with you aspractice leader, following the introduction of somenew program, is that of managing your colleagues’expectations.

In the immediate short-term following theacceptance of your new program or initiative, mostlygood things are perceived to happen. Promises ofopportunity fill the air. The subsequent transitionperiod soon transforms into a prolonged vacuumbetween the old reality and the pending one. In thisin-between time, neither the old rules nor the newrules work. It is time when everything seems to be upin the air; chaotic, unreal and confused.

Every change potentially terminates relation-ships and plans, shifts power and status. When youunder-manage this transition, performance can be

severely damaged. Unmanaged uncertainty is trans-formed into speculation, confusion and unproduc-tive anxiety. This phenomenon is similar to the post-operative phase of recuperation experienced by anindividual undergoing surgery. The recuperatingpatient will display a drop--off in productivity; andthere will be difficulty in mobilizing personalresources. Firms undergoing change usually strugglethrough a comparable adjustment process.

Regrettably, a frequent response is to keep a lowprofile, offer reassurances, and largely to do nothingfor weeks or even months following announcementof the new initiative. The typical comment becomes,"Let’s let the dust settle for a while and allow people toget comfortable with things." But comfort isn’t usual-ly what people are feeling. Sadly, there has not been acorresponding attention given to managing thischange transition and integration process after some"new program" has been announced. The result hasbecome that too many of these worthwhile initiativeseither evoke such discomfort that expected benefits areshort-circuited, or the firm involved gravitates to otherpriorities and the initial impetus wanes over time.

Worse yet, you may easily succumb to implicit-ly promising more than may be capable of being eas-ily delivered. The fact is that any new change ofbehavior is slow, expensive and difficult to imple-ment. There is always a longer-than-promised timeof confusion and mess; and it always seems to cost alot more (in time and energy) than anyone estimat-ed it would. We have repeatedly witnessed the after-math of unfulfilled promises about how some pro-posed new initiative would solve the firm’s problemsor set the firm on a more profitable new course; howthe change would be so well planned as to not sig-nificantly disrupt present operations; how it wouldnot take very long; and how it would not cost verymuch, by way of non-billable time to implement.

NURTURING YOUR PARTNERS TO FOLLOW-THROUGH

Even after getting your partners to see thatthe old ways will no longer work and recognize thechanges that have to be made; even after getting

34


those partners to clearly see the new path, helpingthem develop the skills and obtain the resourcesrequired, and believe that they can do it compe-tently, your change efforts can often falter. Infact, this is the one area where we see nine outof every ten firms fail!

The problem that many in leadership face isthat they think that once having launched thenew strategy or initiative, the job is done andthe rest will naturally come about of its ownvolition. Unfortunately, it just doesn’t happenthat way. The real leadership investment of time

35


THE J-CURVEWe begin every new initiative at some level of performance. The performance factor could be

objective, such as cost, time, client satisfaction, or other indicators; or it could be subjective, such asthe perceived morale of the professional staff. We expect that things will start to improve right away andthat the variable plotted on the vertical axis will immediately start to climb. We allocate budget dollars,appoint a task force, launch the new project, start the training seminars, and do all the things we'vethought of to achieve the improvements we want. We expect that the results will move upward towardthe level we seek.

Having to revise expectations occurs quite regularly; in fact, it qualifies as an official syndrome of orga-nizational change. To visualize it, picture the flow of events as shown by this "J-curve":ZZ

What happens is that things don't start improving immediately; they get worse. Why? Because we haveupset the system. We've introduced instability and change into a system that previously operated onwell-established habits. If we reorganize, we'll have an inevitable period of confusion; people have tofigure out how the new arrangement is supposed to operate. If we change responsibilities, people tendto mix old behaviors with the new ones, until they get used to the new rules. If we change the informa-tion systems, people need to learn to use new procedures. Instead of smooth, harmonious change, weget confused, stressful adaptation. You begin to sense, unconsciously at first and more clearly as timegoes on, the grotesque disparity between expectations and results. This gap, more than anything else,tends to demoralize, plant doubts in your colleagues’ minds, and put them off from any original enthu-siasm. At the point of greatest disparity between expectations and results, shown on the graph as theValley of Despair (VOD), many change initiatives die.

If you understand the concept of the J-curve, condition your colleagues as to what to expect, and toughit out to get past the valley of despair, things can begin to turn around. Some of the hoped-for resultsbegin to appear. Partners begin to feel more confident and get behind the new way of doing things.Morale improves; a sense of optimism begins to set in. We begin to sort out what works from what doesn't.

Our observations confirm for us that the vast majority of new initiatives fail due to the lack of decisiveaction after the initiative has been announced. In fact, as a practice leader, you are likely to spend aninordinate amount of your time conceiving the strategy and developing the issues; but spend only 8%of your total time on the critical transition issues following the change . . . a time when your new pro-gram or initiative is most vulnerable.

ORG

AN

IZAT

ION’S

PERF

ORM

AN

CE

TIME

C U R R E N T

Change InitiativeV O D

D E S I R E DWhat We Expect

What Actually Happens

in bringing about the desired change now begins.

The "rubber" of change meets the "road" ofresults in partners’ behavior. In other words, newinitiatives and strategies do not make a differ-ence until people act differently. However, nomatter how we approach it, it takes time for thedesired change to cascade throughout the team.As a consequence of this time lag, there is a possi-bility that some partners will not only get fatigued,but even disoriented during their journey.

Your partners areasking themselves,"Can I trust that wewill actually achievethe outcomes thatwere promised?" Andif you are one ofthose practice lead-ers, who with thevery best of inten-tions, has alreadyhad a couple of priorinitiatives fall flat,your partners mayalso be re f lec t ingupon, "How can I beassured that if I investthe non-billable time and effort, that the rugwon’t be pulled out from under me and somenew strategy or program announced, just as I’mgetting the hang of things?" The gravity of yourfailed prior change efforts, combined with thepull of their previous comfortable ways ofbehaving exerts a constant and massive force.

Consider one of your partners, we’ll callGeorge. Unconsciously, George compares his per-sonal return on investment with respect to hisexisting behavior versus the new behavior beingadvocated. The old behavior involves minimumeffort and the ego gratification of feeling powerfuldoing what is comfortable. The new behaviorrequires lots of effort and not that much immedi-ate reward. Should George trust that the rewardswill improve? Should he believe that eventually,

his new behaviors will translate into better perfor-mance for the firm and thereby a more rewardingfuture for him personally? Unfortunately, Georgeis alone in his contemplation.

Repeat this scenario by the number of part-ners required to change their personal behaviorsin some way, and it is easy to see the magnitudeof your challenge.

Now if George loses faith or his trust iseroded, or he simply gets tired of exerting the

effort, the gravitationalp u l l o f o l d h a b i t squickly overpowers anyinitial momentum. It’seasy to see why yourgrand new strategy mightnot transform your firm,or its bottom line.

Change initiativescan of ten fa i l to beimplemented becausepartners get fatiguedwith put t ing in theenergy required to walksome new path with anunproven return on

their investment. Partners become disillusionedby the vapor of trust, when the concreteness of thepast has worked and might continue to work justas well, with only some fine-tuning. Why Change?

Let’s be optimistic and suggest that you havepartners who are committed to going the dis-tance. Six months go by. George has been work-ing diligently. He feels as though he has madesome progress . . . but how much progress? Heis not sure. He now wonders about the rest ofhis partners, "Are they working at this as hard asI am?" He suspects that he is among the minor-ity and that most of the others are not really tak-ing this as seriously as he is. George just isn’tsure where things stand. He is starting to feeldisoriented and wonders why he should keepmoving forward.


36

very transition period soon

transforms into a prolonged vacuum

between the old reality and the

pending one. In this in-between

time, neither the old rules nor the

new rules work. It is the time when

everything seems to be up in the

air; chaotic, unreal and confused.

E

Now, as is always the case, George wants todo his part, he cares about how his fellow part-ners view him, and really does want to be seen asa team player – he just doesn’t want to be theonly "sucker" putting in all the extra effort!

Knowing that this challenge exists for Georgeand others, here are a few actions that you cantake to nurture your partners to follow through:

APPOINT AN IMPLEMENTATION CHAMPION.

It may be a given that your executive com-mittee and all of the partners support thechange. However you need to manifest that sup-port with some dedicated attention. The bestway to do that and to achieve success with yournew initiative is by appointing some senior andrespected partner to devote the necessary non-billable time to serve as an "implementationchampion" – someone who will provide constantsupport, care, and nurturing to those (like George)who are taking their walk in faith.

In those cases where you are attempting alarge-scale change effort, you may need toappoint a number of implementation championsand invest the time required. In those instanceswhere that might be impractical, the best courseof action would be to begin your change initiativewith a smaller, contained pilot launch.

Your implementation champions mustknow what to look for and what behaviors toreinforce. What is it specifically that you arelooking for? Are you looking for concrete resultsor well-intended efforts? My strong contention isthat you begin any change effort by focusingsimply on reinforcing and recognizing wellintended efforts. Concrete results will comelater. Remember that your partners are not goingto be great at something they have never donebefore or feel slightly uncomfortable with, intheir initial efforts. To demand results at thisstage will only intimidate and demoralize peo-ple and cause them to return to their old habits.

Focus on what’s working. In an attempt tofix what seems to be broken, people assumethere’s something wrong (with the plan, theconcept, or even the people). What is oftenoverlooked is all that is already working.Cement, for example, goes through a curingprocess. There’s a point at which it may looksolid, but is still soft and (great for kids) pliable.Is there something "wrong"? Of course not.

Whether your plans call for completing abrief bank or changing the culture of your firm,there are always things that are working – everyday – in your plan. When you focus your atten-tion on what’s not working, all you’ll see iswhat’s not working. The natural cycle of enthusi-asm is greatly influenced by where and how youfocus your attention. If you focus on the "lack ofenthusiasm" or "lack of change", then you areactually causing the enthusiasm to diminish andchange to cease. Great leaders know this, andinstead put their attention on what IS working.They’ll focus on the enthusiasm that still exists,and the efforts (however small) that are occur-ring. By doing so, these leaders understand thenatural cycles of motivation and will influencethe process to continue to resolution.

IF YOU AREN’T GOING TO MEASURE, THEN DON’T BOTHER.

You’ve heard it before: "What gets mea-sured gets done." It’s still true. An effective mea-surement system that scans both the lagging(outcome) measures and leading indicators toallow mid-course corrections can and shouldbecome your framework for managing theimplementation of your program. Keeping trackof what is being done (ensuring everyone ispulling the rope in the same direction) can onlybe accomplished with a measurement systemthat is tied to your strategy.

The best measurement system is one that cre-ates a "dashboard" of the few, but critical, keyindicators. This dashboard should include lag-


●

●

37

ging indicators (often financial or client satisfac-tion data) that will allow you and your team toclearly see and evaluate the results that have beenachieved. It should also include leading indicators(like scheduled meetings with key clients orplanned service enhancement actions to be taken)to monitor the progress of change and makecourse corrections as necessary. Many teams havea slew of financial measures they pay attention toand, while the financials are important, they alsoare retrospective. They can only tell you where youhave been, not necessarily where you are going

Each partner’s progress needs to be charted,monitored, and communicated. Without that inter-cession, George is left to imagine the worst. And ifGeorge does not perceive that progress is beingmade, what is his motivation to want to continue?

People cannot and do not suspend judgmentand conclusions for long. Lacking any informa-tion or conclusions from practice leaders, theysoon form their own. George and his colleaguesmay assume that if things were good, they wouldhear about it. As they are not hearing anything,that must mean that things are really appalling.

Achieving success requires monitoring andcommunicating at the individual level. Each ofyour partners needs to know that he or she isgoing in the right direction, behaving in thedesired manner, making some progress, and thatthe firm or group is collectively moving towardthe desired result. Concurrently, those samepartners need advice, counsel, and continualhands-on assistance on how specifically they canmake further improvements.

CONCLUSION

Getting your team to align their behaviorwith your proposed strategy for the future usual-ly means that each partner must, to some extent,change the way they work and think. And sincewe all know that people resist change, thereinlies the problem, right?

The point here is that it is not really changethat your partners resist. In fact, each of yourpartners frequently and voluntarily makes specif-ic decisions in their lives to create and embracesome new change. What these partners reallyresist is the loss of control over the professionallives that they’ve worked so long and hard to cre-ate. When we say "change" they think: "I used tohave this figured out, if it changes will I knowwhat to do? Do I have the skills and support Ineed to be successful? What if I fail?"

There is good news in this message. If it isnot truly a resistance to change, but fear of a per-sonal loss of control that some of your partnersare experiencing, then as a leader how big a stepis it for you to figure out how you can help yourcolleagues begin to retool and regain control?

Regaining a personal sense of control is, inlarge part, a process of regaining personal com-petence. With competence comes confidence;and with confidence comes commitment.

If we as leaders, can stop thinking abouthow to best sell our fellow partners on our lat-est new strategy, program, direction, initiative -and focus instead on helping our colleaguesreestablish control over their professional lives,our implementation challenges will become farless formidable.

38


Patrick McKenna Patrick has worked with law firmssince 1983 and has served at least one of the top tenlargest firms in each of over a dozen different countrieson issues associated with developing competitivestrategies, improving profitability, client serviceexcellence, and systems for effective practice groupgovernance. Patrick may be contacted by e-mail [email protected].

Because today’sCOMPETITIVE CHALLENGES

demand a Higher Standard of Performance

MICHAEL J.ANDERSON

has 15 years as anExecutive Directorof law firms andover 15 years as aconsultant to thelegal industry. Hisprimary focus hasbeen with partnercompensationissues, practicegroup leadershipand profitability aswell as innovationswithin the profes-sion. Michael canbe contacted [email protected].

NICK

JARRETT-KERR

is a UK Solicitor, theformer ManagingPartner of a largeregional U.K. lawfirm and an expertin Professionalfirm leadership,management andstrategy. His con-sulting practicespecializes in pro-fessional firmleadership, man-agement and strat-egy. Nick can bereached by e-mailat jarrett-kerr@

edge.ai.

KAREN

MACKAY

has over 20 yearsexperience bothworking in andconsulting to lawfirms ranging insize from 30 toover 2000 lawyers.Karen’s practiceinvolves strategy;in particular theprofessionalstaff—their rela-tionship with eachother and theirclients. Karen canbe reached [email protected].

PATRICK J.MCKENNA

has worked exclu-sively serving pro-fessional servicefirms worldwidesince 1983. Patrickis also co-authorof the internationalbestseller, FirstAmong Equals(Free apress, 2002).Patrick has servedat least one of thetop ten largest lawfirms in each of overa dozen differentcountries on issuesassociated with devel-oping competitivestrategies, improv-ing profitability,client service excel-lence, and practicegroup governance.Patrick can be con-tacted at [email protected].

ROBERT

MILLARD

has more than adecade’s experi-ence as managingdirector of a SouthAfrican consultingpractice. His par-ticular interestsare in conflict resolution, extremechange manage-ment and assistingfirms to proactivelyevolve their cultureto align with theirstrategy. Robertcan be reached [email protected].

GERALD

RISKIN

is a Canadianlawyer andBusiness Schoolgraduate with aglobal reputationas an author, man-agement consul-tant and pioneer inthe field of profes-sional firm eco-nomics and mar-keting. Gerry hasclients whichinclude the mostprominent profes-sional servicefirms in the world.Gerry can be con-tacted by e-mailat [email protected].

ED

WESEMANN’Sconsulting practicespecializes in assist-ing law firms withstrategic issuesinvolving marketdominance, officelocation, mergerand acquisitionand the activitiesnecessary forstrategy implemen-tation. Ed hasworked with firmsranging from 25attorneys to severalthousand. Ed canbe reached [email protected].

1 800 944-EDGE (1 800 944-3343) in North America0 800 964 911 in the UK1 800 123 366 in Australiao 800 999 849 in South Africa(402) 398 4969 North America globally

ROAD KILL

Edge’s CULTURE ASSESSMENT can help you effectively mea-

sure and manage the cultural transition between two firms

considering a merger or alliance, and assess a myriad of crit-

ical factors. This assessment was developed by Dr. Daniel

Denison, known for his pioneering studies on the cultures of

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Our CULTURAL ASSESSMENT translates often difficult to

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Your ideal partner is out there. All it takes are the

resources of someone with the expertise and tools to help

bring you together. Alternatively, if you are just into serial

ROAD KILL

IT IS CLEARIT IS CLEAR

that many firms are entering a high stakes mating ritual.

(Of course some are just serial dating!) Imagine your ideal

partner. A partner with similar business objectives. One

whose strengths, strategy and vision when joined with yours

could forge a powerful breakthrough combination.

There are four general concerns that your partners will

raise. Is there a cultural fit – will we enjoy practicing with

these people? Is there a practice fit – will they have excel-

lent work for us and vise versa? Will client conflicts become

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impact be? Mistakes will be made. Some firms will become

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tion.

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