♫ But change is never a waste… it’s never a waste of time…♫
Words and music by Alanis Morissette.
When the rate of change inside an organisation is slower than the rate of change outside the organisation, the end is in sight – John Welsh, Chairman, General Electric
I came across this quote and it caused me to stop and reflect. Law firms have not typically been vortexes of change. What implications does this have for the practice of law? On one hand, the law itself has been able to adapt to the rate of change in society…witness video gaming law, IT law, biotechnology law and the like. These are all wonderful examples of how the law itself is adapting to the newer developments in our society. But has the practice of law kept up with the rate of change? Do law firms adapt to change as quickly as the law that they practice? My feeling is that lawyers may be in for a fairly turbulent time over the next while as the forces of change wash over the traditional law firm.
First, there are the developments in Australia from the firm of Slater & Gordon. The 140-lawyer firm is the first law firm in the world to go public through an ‘Initial Public Offering’. As a result, the seven senior partners will each end up owning stakes of between $2 million (USD) and $8.5 million(USD). The new firm will have a market capitalization of roughly $89.7 million (USD) (as per law.com). The theory is that greater access to capital markets will allow law firms to invest in greater innovation (“R&D”).
The UK is looking at the Clementi Report and the Legal Services Bill. The proposed changes to the practice of law in the UK go much further than just opening up law firms to ownership by non-lawyers. The changes that they propose are designed to provide the capital for and foster the development and innovation of legal services and products. Increased efficiency and lower costs are two stated goals in the Report.
However, there are also more subtle factors at work. Demographics, for one. The population is aging and the boomer group of lawyers are looking at retirement. As a result, there are many firms that are now facing succession issues – and their ability to attract, groom and advance younger lawyers to partners will have a direct impact on the retirement plans of the older lawyers in the firm. The challenge for these law firms is to rework the values and culture of the firm to appeal to younger lawyers – thereby bridging the Gen X and Y chasm that has developed and stratified our society.
Another subtle factor is the increasing importance of community. Steve Ballmer, CEO of Microsoft, sees this as a major factor in software – and a challenge for Microsoft (New York Times, Oct. 14, 2006). Now Microsoft deals constantly with change – it is after all, a defining feature of technology. If Steve Ballmer feels that collaboration and interaction at work is increasing in importance, then the logical step is to look at law firms and see the degree that they are forming client teams and practice groups to foster the collaborative approach to meeting (and increasingly, anticipating) client needs. Certainly practice group management and client teams have been a focus of many larger firms for some time – but what about mid to smaller sized firms? How are they adapting to the new collaborative work environment? Are they adopting new technologies, approaches and structures that meet the expectations of their clients?
Further, there is the whole coaching and business development movement, which recognizes that associates and partners alike need to increasingly focus in on the business aspects of the practice of law. Business development is hot right now as firms start to embrace a strategic approach to their business.
All in all, this indicates that individual law firms must become adept at implementing and responding to change at a rate at least equal to the rate of change that surrounds them. The challenge to law firm leadership – and the stakes – have never been higher.This entry was posted on Tuesday, July 24th, 2007 at 11:57 pm and is filed under Change Management, Firm Governance, Leadership and Strategic Planning. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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