While many law firms have over the last few years begun pricing improvement initiatives, many have failed to realise their potential and in the most disappointing and frustrating examples, they have eventually reverted to type entirely, losing all of the gains originally achieved. There is good reason for that. It’s hard. The rewards are significant but if it was easy, everyone would have done it a long time ago. So, we have decided to provide firms with a roadmap which will greatly increase the prospect of durable and sustainable improvements.
In doing so, we have developed a law firm specific model which draws on the work of John P Kotter, Konosuke Matsushita Professor of Leadership, Emeritus, at Harvard Business School. Professor Kotter is widely regarded as the foremost international authority on the topics of leadership and change.
In this series which will span 8 weeks, we will set out the 8 steps to a successful law firm pricing improvement initiative. Previous posts have covered:
Which brings us to…
Pricing Transformation - Step #7 – Consolidating Gains
Major change often takes a long time, especially in large law firms. Overt and covert forces can stall the process long before it is completed; departure of influential leaders and managers, and sheer exhaustion on the part of those trying to implement the change can lay the groundwork for defeat.
But perhaps the greatest risk is the reassertion of irrational and political resistance to change - resistance that never fully dissipated but simply went into hibernation.
Sometimes you just can't win over the partner who is appalled when a reorganisation encroaches on their turf or the partner who can't fathom why you would want to spend so much time worrying about innovative pricing as opposed to just getting the work done, or the finance director who thinks that professional development of partners pricing skills is a waste of billable time [Note: I have no-one specific in mind at all for these descriptions; they are just theoretical].
Within the context of change management/transformation, there seems to be one truism - never take your foot off the gas until the job is complete. John Kotter, professor of leadership, Emeritus at Harvard Business School and world authority on leadership and change has noted, "I'm confident of one cardinal rule; whenever you let up before the job is done, critical momentum can be lost, and regression may follow. Until changed practices obtain a new equilibrium and have been driven into the culture, they can be very fragile. Three years of work can come undone with remarkable speed".
Progress can slip quickly for two reasons. One has to do with corporate culture which is the subject of our next and final blog in the series. The other relates directly to the problem of interdependence.
All organisations including law firms are made up of interdependent parts. Within a law firm, there are multiple constituencies that have an interest in pricing and whilst they might share that commonality, their perspectives and priorities are quite different. The different groups include equity partners, all fee earners who are not equity partners, professionals involved in finance and analytics, pricing directors, business development specialists and bids and tenders’ specialists.
The problem is that they are all interdependent. The end result is that you can't change one aspect without it having a knock-on effect. If we turn that around, changes in one area cannot occur because of sequencing issues. In other words, dependencies mean that certain things must occur in one part of the firm before change can be made amongst another interest groups.
Understandably, the prospect of changing everything at the same time can and in reality, probably is, insurmountable and daunting. How on earth do you run a dozen related major change management projects across the firm simultaneously? The following approach can assist;
1) Make small aligned changes across all of the impacted constituencies at the same time. There is no point trying to do everything at the same time. It simply won't work. Nor is there any point in doing a deep dive in relation to one area because that is the core problem with interdependencies. Unless you are chipping away at everything, you will come up against a brick wall very quickly.
2) In previous posts, we have referred to the critical distinction between leadership and management and the distinct roles of each. At the risk of repeating ourselves, this is critical. In our experience, a firm’s leadership can take the eye off the ball thinking that once they have provided the impetus to get the project off the ground, that is the end of their responsibility and they can leave it to senior managers to make the rest happen. That approach exacerbates and hastens the loss of momentum.
3) Because internal interconnections make change so difficult, people begin to raise questions about the need for all the interdependence. Why do we need to get their approval first? What happens if we do it this way for a change and miss out those two steps in the middle? Does it really matter? Why do we do that? Cleaning up historical artefacts does create an even longer change agenda, which an exhausted organisation will not like. However, purging of unnecessary interconnections can ultimately make a transformation much easier
So, to summarise this stage of the process;
- More change, not less: the guiding coalition uses the credibility afforded by short-term wins to tackle additional and bigger change projects
- More help: additional people are brought in, promoted and developed to help with all the changes
- Clear direction from the leadership: senior people focus on maintaining clarity of shared purpose for the overall effort and keeping urgency levels up
- Project management and leadership from below: lower ranks in the hierarchy both provide leadership for specific projects and manage those projects
- Reduction of unnecessary interdependencies: to make change easier in both the short and long-term, managers identify unnecessary interdependencies and eliminate them
- Leadership versus management - to horizons: by virtue of their role, senior law firm leaders must think in terms of years or even decades. In contrast, because of the nature of management processes, managers often think in terms of much shorter timeframes. For them the short term is this week, the medium term a few months and the long-term is a year. It is essential to understand that you need a mix of both.
Next week (final article in the series) - Step #8 – Anchoring New Approaches – Culture, Process & Technology