The hazards of instigating transformational change within professional services firms

While the basics of instigating and driving change within professional services environments are essentially the same as corporate environments many traditional professional services organisations are further complicated by their ownership structure.

In the corporate environment, management, the board and the shareholders are normally mutually exclusive. In the traditional professional services partnership structure, management, the board and the shareholders often overlap. This is why instigating major change in professional services firm can often seem like an insurmountable problem.

There are two major stages of organisational transformation. The first is to actually instigate the transformation. The second is to ‘drive’ or implement the transformation. 

 Instigating transformational change

 Instigating transformation in legal firms is often the hardest step.  This is because encouraging partners who are in their comfort zone to realise, firstly, that they need to change and, secondly, that they need to actively and enthusiastically embrace change is extremely hard.

Partners are often reticent to risk what is perceived to be a “collegiate partnership culture”. Other fears include losing staff and having to change silo or personal work practices.  Fear of the unknown and inertia are the major reasons why many legal firms decline rather than making a proactive decision to change. 

Instigating change means working with human psychology. Finding out what drives the decision makers, appeasing fears and presenting a vision for the future are critical at this stage. 

Change can only ever be instigated by a compelling argument, by presenting facts and figures which support the reasons why change is necessary. Fear can only be eroded by clear and logical thought. Facts and figures that build a business case for change may include:

§ Declining net profit or returns to equity partners over a given period of years

§ Decline in partner/staff numbers over a period of years

§ Decline in market share

§ High staff turnover

§ Loss of key clients or reliance on a couple of clients

§ High levels of staff or client dissatisfaction

§ Inability to achieve stated strategic goals. 

In addition, the following are often symptoms of a declining business:

§ lack of future direction (no strategy)

§ inability to make decisions at the board room table (or infrequent partner meetings)

§ silos operating in the business

§ high turnover in management staff due to frustration

§ reactive rather than proactive decision making

§ clock watching

§ low pay environments

§ poor culture

§ political assassinations.

 Legal firms in decline will often only actively search for change solutions once the hip pockets of motivated partners reach a level that leaves them personally uncomfortable.

 Driving transformation change

Once the board or partners have accepted the need to change and you have support to progress, there are two imperative roles which must be filled if the change is going to be successful. These are:

1.       The driver – the person with change management and technical experience who will make sure the change happens, will formulate the strategy and implement the project plan. 

2.      The champion – a partner who is respected by the other partners and the driver, who is a performer and has interpersonal skills to support the driver. The champion needs to be able to take the lead from the partners’ perspective in supporting the change and is the bridge between the partners and the driver. This person will be needed when the driver takes on important issues within the partnership and may need to shield the driver during significant periods of instability. The champion helps to implement the vision of change, prevents white-anting of the process and brings the partnership along on the journey. 

To get the best results from transformational change, consider the following:

§ Launch a formal change program in the firm

§ Educate everyone on why change is needed, what the change will achieve, what to expect during the period of change and how to manage change.

§ It is important to get the partners and senior management fully behind change. Leading from the top is the only way. Make sure that any dissention in the top ranks is done behind closed doors and that everyone walks the talk when with staff.

§ Communication is key. To sell change there must be a silver lining. Quantifiable goals which are published to relevant groups or people and compared to actual results over time are a good way to show that the changes are working.

§ Have a forum for communication; develop some really good people strategies to build a happy culture. Try to balance bad news with good news. 

§ Celebrate wins. Get some quick wins happening at the beginning of the change process to ignite momentum.

§ Teach business skills to all fee earners so they can make the right business decision in their area of responsibility.

§ When the business starts hitting goals, reward the staff too. 

§ Tie your key staff to the business, be generous with remuneration, be a great place to work. Say thank you to your staff for their efforts. 

§ Keep the momentum going, keep your staff happy and the business will boom.

 Transformation takes strong leadership. While the results of transformational change are worth the pain of the journey, if you don’t have someone (ideally both the Chairperson of the Board and the CEO) who can shoulder pad up and tackle the difficulties, don’t even bother trying to make the changes.