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The keys for evolutionary Change Management in Legal Services

Lilian Mateu Ruano, Business consultant and Agile coach at NTT Data Europe&Latam and Founder of Selectius Projects

The pace of changes in the world is accelerating and technology is shaping the future of businesses across sectors and redefining the professional services playing field. Legal industry leaders and managers must explore and comprehend the intersection of law, business and technology to shift to a new paradigm.

We are living in amazing transformational times. The type of legal work is changing under the influence of technology and the proximity of legal function to business is causing disruption on how legal professionals provide value to their clients.

Legal services customers demand more effectiveness in work processes, more transparency on fees, more speed on delivery, more predictability and better budget forecasting. The traditional excuse that a change is not possible, because it seems difficult to predict how long a legal matter may take, is no longer valid.

Legal services businesses should aim to make a profit, but not at all cost, and not at the expense of the core of the legal industry: the people. It is time to create a more sustainable work environment for legal professionals. However, we have a systemic dependency because selling time is a profitable way to run a legal business. Moving beyond the time-based legal economy in not an easy ride.

Some think a big shift in the legal business model and a wide-scale adoption of technology is not going to happen soon. There are a lot of things that should change in how law is practiced. However, the evolution of the status quo is a complex process. Changing how things are “traditionally done” has to be gradual.

It is necessary to activate a cultural mindset shift. To evolve and transform the legal services business requires to be adaptative. We have to start thinking, working and organizing in a different way. We need a better understanding of the value of law for the clients and start thinking in services. Legal services businesses and in-house department must focus on higher purposes than just making profits and being profitable.

This is a huge shift and it means reshaping the business model. Overcoming resistance to change is challenging. We need to promote disruptive leadership and modern management strategies to adapt to the news contexts and needs. We need to be agile to reinvent the legal services model building more mature organizations ready to survive in a very uncertain future.

Leading in the legal services professional industry, through uncertainty, isn’t just about introducing new technologies, when it involves pandemics, currency devaluations, terrorist attacks and wars, resilience is what we need.

David J. Anderson has been working for more than 20 years to improve the quality of management, leadership and decision making, focusing on the achievement of true organizational resilience for 21st century service professional businesses, through Evolutionary Change. With the foundations on the Kanban Method, he has developed the Enterprise Service Planning, the Fit for Purpose Framework and the Kanban Maturity Model.

This is the link to the training program created especially for lawyers and professionals in the legal sector: Legal Kanban Practitioner

At the Universidad Kanban and the David J Anderson School of Management we are now training and coaching these methods, frameworks and models for professionals, managers and leaders of the legal industry, wanting to acquire new skills and capabilities to build modern and resilient organizations wired to evolve to survive in the new contexts.

Let’s explore the basics of the Evolutionary Change Management approach and how the legal industry can benefit from it in the transformation of the business model achieving higher levels of organizational maturity.

Focus on workflow efficiency instead of on billable-hour

Legal services have been historically based on the billable-hour model. Hence the industry has been focusing on how many hours individuals are spending on doing the work and not on how long it took to complete the task or the matter. Consequently, there has been traditionally a focus on keeping people busy because this is the most efficient way to be the most profitable business.

This system brings risks for the client both by the unpredictability in the scope of work as well as by potential inefficiency. The change should start focusing less on managing individuals and their time spend to do the work and more on managing the work-in-progress (WIP). First, focus on the efficiency of the work to be done, and then focus on the “flow” (movement) of work.

In any work, we do a series of activities in order to provide the deliverable. We have to introduce the concept of “flow efficiency”, keeping the work moving, producing new information, answers to questions, discovery of facts, and so forth, and doing so in a timely manner.

When a customer asks us for something they care about how long is going to take you to get it done and they do not care in how much effort it took you to get it done. Thinking about the value for the customer and improving the speed on delivering legal services is the competitive edge.

However, there are two important things to recognize when managing knowledge work in professional modern services businesses.

First, is that we are dealing with human beings. We struggle to hold too many things in our heads. We work at an optimal level when we have only two or three things in progress at a time, where one is a primary task and the other two are subsidiary, less urgent, less important, or tasks where we collaborate where another person is the primary owner and we provide input or insight.

So, when we work on many things simultaneously, the time to finish them is too long and the quality is affected. It is not a very efficient way to work.

Secondly, in knowledge work activities where we are discovering information for some purpose, generally, there is a cost on any delay related to that. Information has a shelf-life, is perishable in nature. In legal professional services time matters!. We are dealing with hard delivery dates, like court hearings, tax returns, etc.

Hence, there is a value on discovering information quickly and communicating the results in a timely manner. Service businesses need to work reliably and to understand and improve the lead time.

Improving productivity and predictability via technology will make it easier for legal industry to move to alternative fee arrangements, which in its turn will have a positive impact on the people that are the core of the people business the legal sector is. Legal technology should be providing legal teams tools to manage work flow and improve flow efficiency.

Therefore, the big challenge is that we must re-organize modern legal services so professionals must plan capacity and capability to deliver the catalogue of services we offer to clients, with different service level agreements, adopting the most effective technology, to set and manage customer expectations for the standards expected of us.

Leaders and managers of professional legal services need to think in services. Legal services industry needs professionals who are able to think and organize work in organizations as a network of interdependent services that is pulled together to deliver a value to a client.

So, we should be thinking in services and focusing on managing the workflow rather than focusing on having individuals busy.

Evolve with incremental changes to overcome resistance

Changing the way we think, the way we behave, how we work, how we organize and collaborate is challenging for leaders, managers and for everyone. As humans we experience all social and organizational changes personally. This concept belongs to a branch of science called Social Psychology, the study of how individuals experience social change.

Some changes, as a new job tittle, can affect us emotionally if they might affect our identity, who we are, our position, the purpose and the meaning of our contribution in the organization. Changes, as a new role, that might potentially affect our dignity, our social rank and how we receive recognition, and whether or not we are respected for our organization have the potential to affect our self-esteem.

Other changes, as the tools or technology we use, our methods, may also affect our confidence because when a change affects our skills and capabilities we feel emotionally affected. We worry that we will seem incompetent and hence, that how we are viewed and valued by others in the social group would be diminished.

Any type of changes that affect us socially are going to meet with resistance for most of human beings. Social psychologists call these types of changes Structural Changes because they affect the social structure and organizational relationships.

Whenever we pretend to alter something and we do it changing the social and organizational order dramatically (is also known as a Dramatic Social Change), we must be careful because we are dealing with human beings and we are wired emotionally. So, implementing any drastically structural changes we will be attacking identity, dignity and confidence in people and we will invoke some level of fear, anxiety and resistance.

¨People don´t resist change, they resist being changed” Peter M. Senge.

So, our first strategy with change management should always be to avoid introducing organizational structural social changes when and where possible.

Social psychologists identify another type of change, known as normative or incremental changes, where we do not resist because they do not affect directly the social order. This kind of changes may affect and relate on how we do things, our skills, but they will make us to look better, they will help people to be a better version of themselves. Humans love these changes.

To understand it, think about how initially we used phones, only to do voice calls and text messaging. The phones evolved to be smartphones and as a consequence social behaviour changed. The changes introduced on phones, as the applications, were normative, incremental changes. However, over time, we learned and got used to use all kind of them, such as mobile dating apps, and all of a sudden, without really noticing, the social order has been changed.

So, we have to be smart on how we introduce changes in our organizations, as those related to technology or any kind of structural changes. Introducing them as incremental changes is smarter because they have a collateral effect, which is that with time social and structural change will happen but in an emergent manner and it will not meet with resistance.

The core of the Evolutionary Change approach is that we can introduce gradually incremental changes to p.e. the tools we use, and the methods of working and organizing, but we should try to avoid introducing changes that will attack people’s identity and dignity or the social structure around us.

Initially, in the change management, no one gets a new job title, role, or changed responsibilities. We have to start with what we do and how we work now, and then we focus on the work, letting the workers self-organize around it. And we should focus on the flow of work, measuring and managing the workflow, and shrinking the lead time, from customer request to delivery, eliminating the delays to improve the customer experience.

Secondly, we need to think and operate in services, but not in a way that it involves reorganizing our business into service-oriented units. The normative way we should do it is to encourage existing functional units in our business to cooperate and collaborate together.

We have to define a service which is customer oriented, and that service will need to flow through different units within your organization. We need to focus on driving collaboration and cooperation in the name to deliver a service to the customer. So that people will be better versions of themselves in collaborating with colleagues from across the company, and hence, nobody resists. We don't have to reorganize the company to make that happen.

Lead disruptively applying the sports coaching approach

To drive Evolutionary Change, and implement incremental changes gradually, we need leaders and managers with adaptive capabilities, sometimes this is called disruptive leadership. We need leaders who are willing to disrupt the peaceful equilibrium, modify the status quo in which people are living, working, and operating the business. Leaders and managers need to be willing to make the people a little bit uncomfortable and catalyse adaptation and evolution and do that on a regular operating basis to reach high levels of maturity in organizations.

When we recognize that the external conditions are changing around us, if our business or team is not wired to change, to constantly adapting, mutating and evolving, then the likelihood is that we are going backwards from a competitive perspective and becoming fragile. Given enough time, and sufficient external change, we might become obsolete, and that will lead to our extinction.

The formula that we propose and how we train managers and leaders to drive changes is much like the sports coaching model. In mature sports, coaches have a playbook. They know how to take little kids and develop them over a period of years, through a progression of achievement of levels, all the way to world championships or the Olympic Games. All that is needed is that the kid wants it enough, that they are motivated to improve and pushing from one level to the other.

All we need is to empower and motivate people and take them from a current level of performance, make them a little bit uncomfortable, a bit unhappy with the current performance and so they will need to learn and acquire some new skills and capabilities to reach a next level. Sometimes we will need to inject some stress in the environment.

We must do it in an environment which people will be comfortable, because it’s quite safe to fail, so if they fall over, they won’t hurt themselves. With time, they will not be afraid of falling over and then they will evolve and be ready to perform at a higher level. This is the environment and coaching model we need in our organizations.

Summarizing, the basic formula of the Evolutionary Change model to follow to catalyse evolution is very simple:

  1. First, there must be some stress in the environment. Enough to make people to feel uncomfortable but not too much to break them.

  2. Second, it must be a reflection mechanism, a feedback loop to reflect upon the stress, the fact we are uncomfortable with the current situation and analyse it. What is causing the problem, what can we do about it. Can we hypothesize about the changes and adaptations that we can do that will be improve our fitness for the environment.

  3. And third, there must be an act of leadership, someone must inject the energy to enact the change. “Let’s do something about it”. And then we get better, and we repeat the cycle.

Leaders and managers need a playbook to guide the organization through this cycle because this has to be done correctly. If you stress people and the organization too much you break it and people will leave the organization.

Improve until you achieve "Fitness for purpose"

Leaders and Managers often struggle to understand that an evolutionary change process has not an end point. Continuous improvement is always necessary because the world around us will continue to change and we must not become complacent, we must not slip back into a comfort zone, in a new equilibrium.

We will always need the capability to keep evolving and mutating. We need organizations wired to adapt to changes and evolve. But, are there times where we will need not to change and improve anymore?

When we have done enough changes and they are real improvements so we are fit enough for current market conditions and environment in which we operate, then we won’t need to adapt or evolve, at least not until environment changes. There will be periods when there will be little or no change happening. In evolutionary theory, this concept is known as ¨fitness¨.

In a business sense, we will judge if we have reached that point of “fitness” understanding and empathizing with our customers and other stakeholders to comprehend what they need from us and what represents for them a good enough level of service.

To know when we have done enough changes, they are likely to be improvements to the point that we know our costumer's purpose to come to us because we serve them well enough, we need to understand what risks they are managing and which expectations they have of us in terms of how we need to serve them.

For that we need a thinking tool, a method of gathering information and a decision framework that helps us establish the “fitness” criteria to measure how the services we design and deliver, from the customer experience, are good enough. In which case, no further changes are necessary for the time being, or if there is still a gap that we need to close, we must continue to adapt and improve.

To help drive evolutionary change, David J. Anderson along with Alexei Zheglov developed the Fit for Purpose Framework.

Use technology to improve service delivery

In the legal industry we have been thinking in “matters” and “projects” and talking about “legal project management”, rather than in “provision of services”, so we have been looking for traditional project management type of tooling and developing technology with that approach.

Traditional project management tools focus on “resources efficiency” and keeping people busy, rather than focusing on work and the flow of work. Instead, we need work tracking tools. Some examples of this tools are Kanbanize and Legalboards.

The best of such tools is that help you visualize the work. Professional services produce intangible goods (in other words, invisible work). If we are to use all of our intelligence and apply it to managing our work then we need to engage all of our brain, and we can help this by visualizing the work.

So we want a visual tools that helps us track, manage and analyse the flow of work. We need to identify what types of work we are requested to do by customers, we need to know who asks for it and what we do, how the works flows through our organization. We need to track the work and report on it.

We need to be able to identify the “services” we offer, to identify the types of work that we do. Because every type of work has different workflows, requires different people, applies different technology, takes different amount of time. We must define types of work based on these rules.

Also, we do not always trait the work the same way. We need to understand the urgency of the work, its cost of delay, and this will tell us how it should be treated. Some time we need an ¨express service¨ lane for example. We may need to service things faster for some reason.

Offering different “classes of service”, different ways in which work is treated and prioritized, and flowed through our system, is a way to maximize our profitability and optimize our economic model. It may also improve customer satisfaction and give us a competitive edge. Sometimes customers are willing to pay more for express service, or better treatment.

So we need to use technology that helps us identify work items or a given type, to visualize the flow of the work, to measure, track and report the flow, to limit and manage the quantity of work-in-progress, and to tell us the priority or class of service attached to any item of work.

For bonus points, an ability to track the customer, why a matter was requested, and the risks associated with it, are also useful. We may want to know who is working on and collaborating on any ticket at any given time. We want to know whether the item is flowing, or blocked and if blocked why, and for how long. There is some technology already available to do all of this and for very affordable prices.

Lead with purpose to pursue organizational maturity

Finally, probably the most important: where should be focusing to create better organizations to work?

There is a famous quote that states: ¨People join your business, and they leave their manager¨.

We should be thinking on this more. People sign up for a mission or a purpose because they believe they would be contributing in the world, but they quit because it’s a lousy place to work.

People need to work for a higher reason. There must be a greater reason than just collecting a pay check or improving the CV in order to get out of bed in the morning and show up to work.

So, the first thing to realize is that we must to lead with purpose. We need purpose-driven business and organizations. We need a high purpose in order to motivate professionals and our leaders must be leading with purpose, and not merely for individual or organizational selfish reasons or for business profits.

A favourite quote of Richard Branson, founder of Virgin, is "People believe that businesses exist to make profits. They have that backwards, businesses make profits in order to exist".

Business profits enables us to keep going to survive and to deliver the purpose because we created the organization for in first place. Profits enable the mission, the purpose of the business. But simply making profits is not a good enough reason. A business that is economically viable is not good enough. While preservation of our organization, survival, is a concern, it cannot be our mission. So, we must lead with purpose!

People leave business that are not purpose-driven and that are poorly managed, they quit because of their manager. People leave organizations where their leaders and managers are selfish and not well trained at managing its people, at managing risks, at managing the work, at satisfying its customers. We refer at being bad at those things as a low maturity organization.

Organizational maturity and the quality of leaders and their managerial capability matters. Mature organizations, those that deliver on their purpose, that are well-managed, that are good at meeting customers' expectations, good at managing risks, that adapt as needed, that anticipate stressful events and situations, that have resilience and robustness, and a capability to manage innovation gracefully and thoughtfully, and that are good at creating an attractive place to work, where people are set up for success, are great places to work! Employees enjoy working and want to stay.

Maturity Matters! We must pursue organizational maturity as a core part of our strategy. Not just because employee engagement and their loyalty, so they will stay and help to improve and deliver on the mission, because you will have a great place to work where everyone wins: customers get a great service, managers love working because they get to feel successful, owners are happy because we are running a profitable economically sustainable robust business and your employees are motivated are love working in your business.

To help leaders and managers and deepen the maturity of an organization, David J. Anderson, together with many collaborators but especially, as co-author Teodora Bozheva, developed the Kanban Maturity Model, an organizational maturity model and leadership model, and a mapping of the Kanban Method to those models.

This article has been inspired on the interview I made to David J. Anderson on July 2022, sponsored by Global Legal Tech Hub and Deloitte Legal Spain.

Founder of Selectius Projects

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