Strategies for Change Management

ILTA Pittsburgh Lunch, 19 Feb 2015

Ron Friedmann and Jim Tuvell, Fireman & Company

Agenda

• Change is hard

• Understand what has changed + what is changing in legal market

• Learning from change in consumer markets

• Applying these lessons to foster new change

Change is HardEven When Your Own Life is at Stake

Leading Diseases Kill

Lifestyle Decisions Contribute to Illness

Better Lifestyle Chooses are Clear

But Many Do Not Change Habits, instead…

To Foster Change, Understand What Has ChangedOverview of Changes in Law Firms and Law Practice – and some Examples

1970 1980 1990 2000 2010Pre-70

Secretary, Accounting, Library, Facilities

Copy Room, Paralegals, Recruiting, Travel Services

Fax center, IT, Finance, Prof. Dev.

Practice Support, Marketing Tech, BD, Practice Groups, BI, Diversity, Sourcing

Marketing, KM

LPM,

Pricing, Process

Law Firms Have Changed In Many Ways

But How Much Have Lawyers Changed?

• Only in this decade have those changes begun to law practice itself

• Most tech + process changes had little impact on lawyers’ work• Word processing substituted for dictation, long hand, and cut + paste

• Email substituted for fax, Fedex, calls, and memos

• Internet enables new ways to research

• Query how big a change this has really been

• However we answer, let’s learn how those changes occurred…

Adopting PCs in the 1980s

• Make it hard – but cool – to get a PC. • Scarcity can drive demand

• Competition spurs demand

• Two senior partners brag about learning to type

• Many lawyers use PCs in their practice – and present enthusiastically

• Key communication only by email plus commit to client email

>> Top Down, Consciously Planned, Funded, Deep Commitment

Moving from Paper to Images in Doc Review

• Mid-level associates had problems they wanted to solve• Address the mess of dealing with paper• Capture more review info• Avoid drafty, rodent-infested warehouses

• Permissive firm management allowed building new tech / approach• Early use successes sustained effort

• Full text search found more docs• Finding and managing images was easier• Was also cool

>> Bottoms up change by motivated lawyers, willing to take chance. Institutional support and funding but not top down.

Punctual Time Entry

• New managing partner

• Penalties in place• Partner draws held• Associates direct deposit suspended

• Cajoling• Staff walked around reminding• Partners (who were with program) reminding

>> Top down, stick approach, some staff support to communicate, monitoring

Internet Email

• A few firms started early

• But many waited until clients demanded

• At some point, change becomes necessary to • Stay in business

• Recruit new lawyers

>> When you change because the market demands it, that’s not really change management. Closer to execution in a rush, if not a panic.

Frequently Heard – Then (?) and Now

“Why would I ever use email. I just walk down the hall to talk.”

“Law firms don’t have or need websites.”

“I went to law school so I would not have to deal with numbers”

“I can’t create a budget for litigation, it’s just too unpredictable.”

“We could never send legal work to India, it’s not safe”

“We don’t need marketing – our reputation is why clients come to us”

To Foster Change, Understand What Is ChangingOverview of Recent an

KM: Failure to Change Lawyers Led to Automate

• Took a few years to learn lawyers would not do anything extra• Bad titles, bad doc type selection

• After action reviews rare

• Professional support lawyers substitute but uncommon in US

• Most firms end up with enterprise search

>> Lesson: In US, most successful KM is automated. Only lawyer change is learning a new UI (and that’s no longer a big deal)

Legal Project Management Driven by Pain

• Requires basic changes in how lawyers work

• More talk than action to date• Focus has been on pricing and budgets• Monitoring and adjusting is lagging

• Adoption is generally spotty, driven by “partners in pain”

• Firm-wide commitment still the exception• For example, Seyfarth, Gowlings, Baker Donelson• Even in these firms, uptake is not universal

>> Lesson: “Partners in Pain” will drive localized change. Even with PIPs and management commitment, change spreads slowly

Legal Process Outsourcing (LPO)

• Lawyers initially said legal process outsourcing could not work• “India is not safe”. They were wrong

• “Bad Quality”. Lawyers had no metrics + LPO was just as good

• Clients led adoption, not law firms

• LPO worked but spawned many other alternatives

>> Lesson: change was slow, honestly held but false beliefs hindered, clients ultimately imposed. But little of this affected how law firm lawyers worked. If law firms don’t change, others will – rise of NewLaw

Predictive Coding in Discovery

• Substitute tech for humans in discovery (responsive, privilege)

• Almost certainly superior to “linear review”• Linear review is simply not economically feasible• Studies to date show tech better than humans

• Journey remains underway• Clients, law firms, and courts remain uncertain or skeptical• Wider spread adoption likely dependent on courts

>> Lesson: Change is sometimes limited by the law itself, which changes even slower than lawyer

Learning from Consumer MarketsWhy Do our Personal Lives Change More Rapidly?

Adoption Cycle – Crossing the Chasm

As Consumers, We Change Faster and Faster

What Persuaded So Many to Spend So Much?

?

Lessons from Consumer Markets

• Affordability is a big factor

• Viral force a factor (“see it, want it”)

• Ecosystem comes together (e.g., content or apps to support devices)

• The experience and emotions matter

• Habits can change quickly

• Clear answer to “The What’s in it for Me”

Applying Legal + Consumer Market Lessons to Foster ChangeLessons Learned and Approaches to Foster and Manage Change

Motivating Change is Hard Work

• Client request / demand• Management aligns on benefit

• Imminent threat to business• Management that sees compelling

advantage + is willing to act

• What’s In It for Me• Do same work faster / better• Low “barrier to entry”

• What’s In It for Me• Do new kinds of work: make more

or be happier

Know Your Audience

• Open or actively supportive

• Supportive but not ready to act

• Undecided – sees pros and cons of change

• Uninformed / no opinion

• Unsupportive / disagrees

• Hostile

Approaches

• Gamification

• Carrots• Starbucks Cards

• Money – but Kahneman

• Recognition

• Sticks• Evaluations

• Comp

• “Partners in Pain”

• Management buy-in > top down

• Competitive advantage

• Fear of loss

• Client pressure

• Groundswell

• Partner envy

Individual Institutional

When is it Feasible to Foster Change?

• Market necessity – firm is behind, catching up is a crisis

• Management sees a competitive advantage

• Practice has a need or sees a competitive advantage

Ideal Change Recipe

• Institutional Motivators• Client demand

• Management buy-in

• Practice group buy-in

• Execution• Lawyers skin in game

• Firm allocates budget

• Staff build + execute

• Management tracks and manages

• Lawyers communicate changes to clients

Conclusion

• Change is hard

• Distinguish individual and institutional

• Individual is easier; institutional more rewarding

• Choose battles carefully

• Manage your own expectations

• Exit early if necessary

• Don’t sign up for the impossible