Leadership and Management

The difference between a successful firm in the Old Normal Era and a successful firm in the New Normal era is huge.  How to get from one to the other?  Big changes.  So how to get to the New Normal?  Watch this video by Dan Heath who, with his brother Chip, authored Why Change is So Hard.  Punchline of the video?

And here’s why this matters for change: In almost all change situations, you’re substituting new, unfamiliar behaviors for old, comfortable ones, and that burns self-control. Let’s say I present a new morning routine to you that specifies how you’ll shower and brush your teeth. You’ll understand it and you might even agree with my process. But to pull it off, you’ll have to supervise yourself very carefully. Every fiber of your being will want to go back to the old way of doing things. Inevitably, you’ll slip. And if I were uncharitable, I’d see you going back to the old way and I’d say, You’re so lazy. Why can’t you just change?

This brings us back to the point I promised I’d make: That what looks like laziness is often exhaustion. Change wears people out—even well-intentioned people will simply run out of fuel.

What’s the point for law firms?  How hard is it going to be to rewire the DNA of law firms built on hourly billing?  Do firms think it is easy to start operating efficiently, cutting out the fat that has been fodder for increased billing for decades?  It is exhausting in the extreme, and people like Dan Heath might love to do case studies on law firms seeking to become Value Fee firms.  But the point for law firm leaders is that every change needs to be thought out carefully and new behaviors monitored with an eagle’s eye for prey.

 


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"If you don’t like change, you’re going to like irrelevance even less."

                             –General Eric Shinseki, then Army Chief of Staff

Courtesy of a tweet by my friend Gerry Riskin (who also blogs about this video here), comes this eye-opening (and if it doesn’t open your eyes, you’re dead) slide show prepared Beaton Research and Consulting.

Gerry’s advice is to use this slideshow at the beginning of a partnership or practice group meeting.  But every lawyer, and certainly every leader, should be thinking about what this slideshow means for the practice of law in the United States.

Yesterday, I spoke to a group of mostly insurance defense lawyers.  Earlier, I wrote about Rio Tinto bringing in an Indian Legal Services Provider to lower costs.  Is it foreseeable that even the staid insurance world will be swept up in this frenetic pace of change?  How can it not be?

But certainly corporate America is caught up in this change, and it is dragging the legal world along with it.  Wake up.  Pay attention.  Or become irrelevant.

 


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An absolutely brilliant piece by Paul Lippe in today’s AmLaw Daily makes the case that lawyers’ belief that they will reduce risk by making choices that are conventional or appear safe is misplaced, especially in today’s rapidly changing world.  Lippe’s piece, Welcome to the Future: What Bill Belichick’s Taste for Risk Can Teach Law Firms, uses Bill Belichick’s recent decision to go for it on a fourth down and 2 in the waning minutes of the Patriot’s game against the Colts as the starting point for his analysis. He does so after noting John Maynard Keynes classic observation (that seems perfectly directly at most lawyers, and certainly most managing partners), “Most people would rather fail conventionally than succeed unconventionally.”  There is comfort in the herd, but you go through life no better than the herd.

Here’s Paul’s punchline:

Over time, the Belichicks who think through risk and make choices that can be second-guessed are better risk managers than the folks who always make conventional choices. And whether he was right or wrong, you can be pretty sure that Belichick (and other coaches watching) thought very carefully about when to punt and when not to after the loss. Conventional choices may minimize the possible harsh glare of criticism, but they also minimize learning.

The same reality is emerging in how lawyers manage their business and careers. I was on a panel recently with leaders from two large firms. When asked how they would respond to a hypothetical client seeking an alternate fee arrangement that involved some risk sharing, one replied, in essence, “If we completely understand what it is, and there’s no risk for us, and we’re assured our normal level of profitability, and everyone agrees, then we could consider it.” The other leader replied “yes.” Which one do you suppose thought through the alternate fee approach harder? Which one is more likely to learn and be in a position to manage risk more effectively?

As an aside, you have to love a lawyer who, when a client seeks “an alternative fee arrangement that involves some risk sharing” sharing responds by telling the client that so long as “there’s no risk for us”.  Wonder where he learned that definition of risk sharing.

But to Paul’s point, to be blind to the risk posed by staying with the herd, ignoring the perils that stand to decimate the herd, is hard to fathom.  Yet the insight of the definitionally-challenged leader only confirms that people can be blind to their world.

And Bill Belichick?  He’s far too comfortable with risk to ever be a managing partner.  And even if he got there, his shelf life as managing partner would be considerably shorter than Eric Mangini’s tenure with the Cleveland Browns.


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