A Blueprint for Change - Part 1
Applying business school models for organizational design and change to law firms and legal departments.
Change is Here, Let’s Get to Work
“I currently have a billion dollars in legal spend. I want to cut that number in half. But it’s so hard to make lawyers change!” These were some of the first sentences heard in a room from a CIO and Board Member shortly after Generative AI (GenAI) became publicly available and skyrocketed to 100 million monthly users in 2 months. The same milestone took Instagram over 30 months. It took Twitter 2 years to get to 1 million users, and Netflix 3 and a half years.
This executive may have been taking studies of how impacted the legal profession could be by GenAI too far, or maybe not. I’ve spent most of my career in transformation and automation in legal, and I believe the two catalysts for why this moment might be different are the: 1) cost of access, and 2) pace of development and adoption. We’re talking about technology that is as readily accessible as Microsoft Word, and is rapidly improving, or rather evolving, on a weekly basis.
Fortunately, or perhaps unfortunately, I don’t think many organizations can simply turn on this technology and cut their costs in half. Achieving that kind of organizational change is a massive undertaking. It requires not only changing technology, but transforming how an entire profession works, creates value, and gets rewarded. But not to worry, lawyers are fantastic at change (sarcasm).
Following the 2008 financial crisis, a very wise CHRO of the firm I worked for at the time hired Dr. Larry Richard to help our firm change. Dr. Richard is considered to be the leading expert of the psychology of lawyer behavior. He shared to help our firm better understand the lawyer brain, which showed that lawyers as a personality type are two standard deviations more skeptical than the general population, hypercritical, and low in resilience (withstanding criticism) and sociability.
This creates a unique opportunity for change leaders in law. One where they must paint a clear picture of the future that is as defensible as it is achievable, before all that future has played out, to help their fellow legal professionals embrace their first big steps toward change.
It may seem daunting, but it is achievable, and in a profession that’s in a race to be second, others have done it before too. Pro tip: Talk to your intellectual property brethren. Provided below is a model that I have adapted from the writings and teachings of Dr. Don Hambrick), an internationally recognized management scholar who is an Evan Pugh University Professor and the Smeal Chaired Professor of Management, Smeal College of Business, Penn State University. He is also Bronfman Professor Emeritus, Graduate School of Business, Columbia University. I will review this model over the course of a two-part series, and have used this throughout my career to achieve strategic change in both law firms and corporations. This typically takes place in a workshop setting over the course of a couple days.
3 Steps to Strategic Change
- Understand the present
- Where are we now?
- What are the pain points and obstacles that get in the way of our goals?
- Imagine the future
- Where do we need to go?
- What solves our problems, removes our obstacles?
- Plan for change
- How do we get there? What needs to change?
- What do we do first (priorities)?
- How we get the change done.
For steps 1 and 2, you will map the current and future organization design using the Six Elements of an Organization (see below). The first step requires psychological safety in order for the change leadership team to take a realistic look at the current environment, both internally and externally, as well as the current strategy. In the second step, creativity can be unleashed, imagining all the things you’ll have and do in the new organization. Unless your budget is limitless, pragmatism and tradeoffs are core components of this step. Step 3 is where things get tactical. Here, you are mapping what happens when, over a longer period (i.e., typically 18+ months). Now, let’s unpack the rest.
The Team and Common Goals
Before we jump into the remaining components, let’s examine the makeup of the change team and where they sit in the organization. More commonly, this model is used by a cross-functional team within a law firm or corporation, with global strategy having been set at the executive level. The team is ordinarily made up of leaders from each of the essential functions that will drive and execute the change. They should first analyze the organization's market goals, conditions, and strategies to win, generate revenue, and profit. Together, they can harmonize the goals that have been set for their functions individually and identify the target outcomes that must happen to make that true, as well as common behaviors across the workforce that will reliably drive success. Cross-functional alignment is key! Moreover, carefully map how the success of these goals directly connects to the success of the firm / organization in the market. Strategic planning is all about making choices, and there are many tools to do that, but I’ve found the following to be more formulaic and simpler, while still comprehensive.
Six Elements of an Organization
- Strategy
- Our company will be / become something (the best, the leader, the most differentiated!)
- By doing / executing specific actions, bringing things to the marketplace
- In a way that combines these elements that is hard for competitors to copy, and reflects our culture
- Structure
- Organization: Groups, sub-groups, decision rights
- Roles and special units (includes staff / support)
- Geography, where people sit and how they are connected organizationally (centralized vs. decentralized)
- Systems & Processes
- Internal: Systems (technology), how people share information, learn, and act
- External: Systems (technology), how customers / partners share information, learn, and act
- Workflow: How do we make decisions, form teams, assign roles / responsibilities, and set priorities?
- Rewards
- Formal: Compensation and bonuses; driver metrics
- Informal: Status and behavior incentives
- Performance: How do we measure work quality?
- People
- Recruiting and training
- Signature vs. Required Skills: What does everyone have to be good at, and what does each department need to be successful?
- Do we have the right people, and/or need new departments?
- Culture
- The (Firm / Company) Way, Our Style
- Shared Values
- Heroes / Stories
It is important to think of these elements as reinforcing components of how an organization works. In the second piece of this series, we’ll go through these elements in greater detail in the context of a law firm or corporate legal department.
