♫ 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.

♫ Oh, oh, listen to the music
Oh, oh, listen to the music
All the time…

Oh, baby, let the music play ♫

Words and music by Tom Johnson, recorded by The Doobie Brothers.

Some interesting research is coming out of Cornell University by Thomas Seeley, a professor of neurobiology and behavior at Cornell, working with University of California-Riverside entomologist Kirk Visscher and Ohio State University engineer Kevin Passino. They have been observing, devising experiments and mathematically modeling honeybee swarms.

(see http://www.news.cornell.edu/stories/April06/swarm.quorum.ssl.html)

And along the way, they are shedding new light on the problem of decision-making and leadership. Inevitably, they are also throwing a monkey-wrench into the traditional view of running a law firm along the lines of either an authoritarian (i.e. the ‘beneficial despot’) or a traditional committee decision making process.

What are the bees rules for decision-making? They “seek a diversity of options, encourage a free competition among ideas, and use an effective mechanism to narrow choices”. This method so impressed Seeley that he now uses them at Cornell as chairman of his department.

“I’ve applied what I’ve learned from the bees to run faculty meetings,” he says. To avoid going into a meeting with his mind made up, hearing only what he wants to hear, and pressuring people to conform, Seeley asks his group to identify all the possibilities, kick their ideas around for a while, then vote by secret ballot. “It’s exactly what the swarm bees do, which gives a group time to let the best ideas emerge and win. People are usually quite amenable to that.”

The idea is that even in complex decision-making processes, people can form smart groups. The requirements for a ’smart group’ are that the members are diverse, independent minded and use a mechanism such as voting, auctioning or averaging to reach a collective decision (James Surowiecki, The Wisdom of Crowds).

(”Swarm Theory”, National Geographic, July 2007, p 138).

This has important implications for any law firm facing decisions such as whether to take on a new client, deciding which business opportunities to pursue or the choice of a software application in the office. Rather than having an individual or small group decide the issue, swarm theory (or the theory of smart groups, which I prefer) indicates that a law firm should involve as many people as possible into the decision (seeking a wide diversity of opinion to achieve collective intelligence), disseminate information about the options to the group, allow time for a diversity of opinions to form, encourage a free competition of ideas (presumably by holding open discussions where people are free to discuss the concepts (ie being hard on the problem and not hard on the person) and then allow a confidential method for the aggregation of opinion around the best option (a secret ballot would be one method that could be used, either by paper ballots or by using an anonymous on-line survey tool such as www.surveymonkey.com or www.zoomerang.com).

The implications of ’smart group’ intelligence is profound. By linking together millions of computers in a world-wide network, we have crafted The Internet, which in turn has spawned Google and Wikipedia, themselves examples of the application of collective thought and aggregated decisions. By tapping into smart group thinking, a law firm taps into the collective intelligence of all of the members (provided that the group isn’t being overly influenced by one member or a small group therein).

The idea is to create an environment where the best ideas win rather than having decision-making by position (ie the practice group leader decides) or by hierarchy (the management committee decides). Law firms today can take a different approach by letting all voices be heard and in the process, allowing the best ideas to emerge and come forward, and in the process benefiting by listening to the music. I think the application of swarm theory has potential to create a real buzz in law firms today.