This post was originally published in Legal Business World on November 5, 2018

It’s no secret that the legal market is a challenging place to be today.

Mergers, non-law firm players, clients continuing to take work in-house, increasing investment in technology, changing demands from different generations…the list goes on.

With a staggering number of reasons in front of us for why change is imperative, what’s holding lawyers back? And what steps can we take to face these challenges head on? 

Barriers to Change

If we all know that change is happening, what is holding us back or slowing us down?

  • Change is hard (and maybe it’s not for us…): While there are studies and interviews that reflect that law firm leadership recognize that change is essential, it turns out that identifying the issues and actually executing the solutions are two vastly different things. Add to that the reality that most law firms operate as rather loosely affiliated silo-partnerships and not businesses, and you have a managing partner or committee essentially herding a bunch of cats. The analogy is used frequently for managing lawyers because it’s an apt one.

  • Success as justification: D. Casey Flaherty, legal operations consultant and founder of Procertas, is one of my favorite reads on this subject, and he’s written a lot about it. He suggests that powerful partners within firms use their success as the reason for refusing to change: “The pain just isn’t that acute for most rainmakers who can point to decades of empirical evidence that suggests they will be just fine. Given their stature, relationships, and time horizons, many of them are probably right.”

  • Clients leave quietly, or in increments: Law firms and lawyers often expect that their relationships with their clients are strong enough that if a client wanted to go elsewhere, they would inform them. But in-house counsel can often leave the relationship so incrementally that the slow burn isn’t enough incentive for firms to change. There is a surplus of good lawyers in the marketplace – and now, alternative service providers. So unless firms have a strong differentiating factor beyond “I’m great at what I do, and my clients like me,” they can’t be secure in their client relationships.

  • There’s a lack of innovation: While the industry itself is seeing a great deal of innovation, from alternative service providers and some in-house counsel who are having to get creative, law firms, by and large, have struggled with this. I’ve spoken to a lot of lawyers who are now expected to expand their role from “legal” advisor to “business” advisor, which can mean identifying opportunities for their clients, introducing them to key relationships, and more, in addition to providing them with high quality legal advice. For most lawyers, this is brand new territory, and doesn’t even touch the technological and in-firm business advances they need to be making to stay relevant. These types of changes are challenging, and they were never given a rule book for how to make them.

The above barriers are not insignificant, but you can overcome them if you continue to focus on the reasons for change. Whether you find the current landscape exciting or not, even those of us who are the most adept at it can find it daunting and exhausting. In the legal industry, where change is historically slow, when it happens at all, it can be even more overwhelming. We hear an awful lot about it, but it can be challenging to know where to start.

There are companies jumping into the space from other industries, disrupting the status quo and throwing out the old ways of doing things. Clients like them, and they should. They’re more efficient, they bring fresh ideas, and they force those of us who’ve been here a while to sit up and pay attention. But obviously, there’s room for us too. We know this place the best, after all. Some argue that the more things change, the more they stay the same, and in many ways that will be true (client service, good solid legal advice, etc.). But let’s not let that argument be an excuse to avoid taking a hard look at ourselves and the ways that we can do better.

Essential Lessons for Change

There are three essential lessons for change that I’d like to touch on – two of them you can implement fairly straightforwardly, and the third will involve a bit more digging in. All of them require a commitment to follow up and continued change.

Listen to Your Clients

This seems like a fairly obvious one, but how often do you listen to your clients? This lesson is two-fold – first, establish a feedback loop with your clients about the matters that they’re handling, in order to deal with the barrier that we talked about above. There are lots of great consultants who can assist in creating a client feedback program with you and will act as third-party interviewers to get the candid feedback that you need to improve your service offerings.

Second, it’s more important than ever to undertake your clients’ opinions when making strategic business decisions. Many firms are already bringing in their clients when deciding about relocating or redesigning office space, or considering starting a new practice or industry group, or expanding into a new geographic region. How are you incorporating your clients into your strategic decisions, so that your future aligns more closely with their success?

Differentiate Yourself

As we suggested above, it’s no longer sufficient to say that you’re a high-quality law firm with talented lawyers – that’s table stakes. Further, differentiation by practice or industry area is also starting to no longer be enough. Potential clients, and even current clients, need to have a reason to hire you or your firm over all others. Everyone is hungry for business. Differentiation isn’t just about marketing and branding – it’s about deciding about the business model you’re going to pursue as a firm. This goes beyond niche marketing, but about how your firm’s business model is ferociously supporting your clients and their businesses. If you’re not sure and it’s not blatantly apparent, start asking some of your key clients what they think separates you from all other firms in your market. Continue to refine your model and ask again. Ask incoming associates what made them choose your firm over others. Ask lateral hires the same question. Ask your existing partners why they love working there. Continue to refine your model until it is clear to everyone in the firm what separates you from everyone else, how you support your clients with that message, and leaves no doubt in your clients’ minds.

Rethink Your Business Model

This can be the most challenging for lawyers and law firms, because it’s hard to think of the law firm as a business. But it is. It’s essential to look critically at your firm as a business, so that you’re offering real business and legal solutions to your clients in a practical and efficient way. This may mean outsourcing certain functions, investing in technology heavily over the next few years, looking at contract lawyers, maintaining a strong balance sheet, providing strong and transparent leadership, hiring laterals conscientiously. Working on your firm’s business model is likely the place where you’ll see the most pushback from within the firm, and will require the most patience and grit, but it will also show the biggest dividends when it comes to benefiting from the current marketplace.

If there’s one thing we’ve learned from the past decade, it’s that those firms that are the most successful today are those that are flexible and responsive, and able to collaborate with their clients as business partners. That’s not just true for today but will be true for tomorrow too. Flexibility translates to being open to market shifts, advances in technology, and adapting your partnership/business model to the needs of clients and the marketplace. The more flexible and adaptive firms can be, the more prepared they will be for whatever the future holds – whether that’s big changes, or small ones.