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Change Management - a theory

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Viv Williams, CEO of 360 Legal Group examines the way law firms can bring essential management skills into their business in an affordable way.

We have all read the articles and comments regarding the inability of many law firms to manage their own practice, let alone deal with the changes currently sweeping through the profession. Many Partners/owners have never been trained in management skills and are finding it difficult to evolve a strategy for their future.

A surprising number of law firms are embracing change by using the skills of a non- executive partner/director to help them formulate strategy and implement change within their organisation.

Recognising your own strengths and weaknesses will result in a realisation that many partners do not have the necessary skills to develop a change management strategy within their practices. We have seen a steady growth in non-lawyer Chief Executive positions within larger and mid-sized practices when external management skills can make a significant difference. These "management specialists" come from a variety of backgrounds and will command a salary commensurate with their experience - in other words you get what you pay for! The impact of a CEO can carry the costs of a partner but in many cases make a significant improvement in the bottom line therefore justifying their costs.

However, many firms are reluctant to make the commitment in investing in such a position and either tries to do it themselves or employs a half way solution in a practice manager who has little or no authority or responsibility. If partners do not accept that change is inevitable then they are not ready for a CEO - a number have tried it and said it didn't work for us. Was that because once the CEO told the partners some unpalatable news, such as a reduction in drawings in line with performance, that the CEO role suddenly becomes redundant?

The use of a non-executive is both a cost effective and extremely productive alternative; if resources are tight, utilising the experience, knowledge and skills of a non-executive can be the difference in thriving rather than just surviving. Having someone prepared to challenge the partners and ensure the strategic plan is implemented will have a dramatic impact for those practices that have the fundamental desire to embrace change. It could well be that the current partnership is under some pressure seeing a reduction in turnover and P.E.P. yet fundamentally they wish to remain as a partnership providing world class client service at a premium rate to genuine clients. It has been argued that continually reviewing the client base and deliberately removing the bottom 10% of their clients will make the firm more profitable. I have only used the word client in the above scenario and it is essential that we do not confuse the client with the customer. Clients value your service and will pay a premium for your time whereas customers are buying on price - you simply cannot make money by providing client led services to customers.

Solicitors who enjoy practicing law have rarely been trained in management skills and with the current sweeping changes within the profession it is more important than ever for ideas and management skills to be brought into the practice at an affordable cost.

Alternative business structures, referral fee bans and the changes to legal aid are just some of the outside influences that are technically out of your control but will have a huge impact on the future of your firm if not dealt with correctly.

If the firm has dealt with the recession properly then they will have cut their costs, made the necessary, although painful redundancies and reduced drawings accordingly. The luxury of having an external chief executive, probably a non-lawyer, to run the practice appeals to many practioners but the cost of employing a full time CEO is prohibitive in the current circumstances.

Hence the growth of the non-executive director/partner within mid-sized and even smaller law firms; a non-executive will allow you to still run your organisation but will give you invaluable advice and guidance in all aspects of business and managing change. The opportunity facing law firms far outweighs the downside, on condition that you are running your practice as a business. Bringing those business skills into your practice does not have to be expensive but should make an incredible difference. The strategy may well be to bring in a CEO role in a few years' time and many non-executives are seen as an interim arrangement towards that goal.

Whether you have a strategy for the future or are looking for guidance, consider joining the ranks of the ever growing trend of legal practices that are embracing the opportunities and utilising the skills of a non-executive to grow and enhance their practice.

Viv Williams
CEO, 360 Legal Group