Steam, Electricity and Law Firm Management
0 Comments - Posted By Rob Millard In "Off the Wall" Insights , , , , , , - Permalink -
At 3 PM on September 4 1882, Lower Manhattan was transformed as Thomas Edison’s spectacular, cutting edge electric illuminating system went into operation. The American public was astounded at this revolutionary new energy supply. Clearly, it was only a matter of time before it would take over as the primary energy source in industry too.
So it did, of course, but four decades later, only half of America’s factories were fully electrified. Why did it take so long for a clearly superior technology to establish itself?
The reason is simple: The very best, state-of-the-art factories at the time (the product of a century of refinement and innovation through the course of the industrial revolution,) were designed in such a way that electricity provided little advantage. Unlike today’s factories, where every piece of machinery has it own electric motor, factories at the end of the 19th Century were designed around central energy sources. Machines were powered by elaborate systems of pulleys and shafts called “group drives” that transferred energy from the central source (typically a water turbine or steam engine) throughout the factory. The most efficient way of doing this was to minimize the length of the drives. Factories, as a result, were multi-storey buildings with one or more shafts per floor, each driving a group of machines. The entire factory, in effect, was designed around the limitations of the power supply.
So what use was this newfangled electrical energy? Initially, it was used to provide lighting and steam/water turbines were replaced with central electrical motors. Electricity only came into its own when a new generation of factory buildings started being built, where machinery could be arranged and rearranged to optimize production line efficiency. These were typically sprawling, single storey plants. Small, efficient electrical motors powered each machine independently. Electrical wires replaced the cumbersome group drives. There were no more awkward steps and elevators to navigate between floors.
Replacing the factory buildings was a slow and expensive process, however. One does not simply through out such capital investment and the know-how built up over a century or more.
This little case study provides a valuable lesson in how innovation progresses in law firms too. Many of the great ideas out there today provide little advantage to law firms as they are currently constituted.
The Chairman of a very prominent national US law firm mentioned in a conversation that we were having recently that except for the computers, there is little difference in a law office today, to what existed 50 years ago. The arrangement of offices, structural hierarchies and suchlike are still “just as they always have been.” Other practices like hourly billing and aversion to alternative work arrangements would fall into the same category. This is more than just generational differences in perception between Baby Boomers / Gen Xs / Gen Ys. The changes that people talk about today are challenging the very foundation of the way in which legal services are being provided to clients.
The good news is that just as electricity was around for 40+ years before it was fully adopted, so many of the solutions to the problems facing law firms today are also out there, in plain sight, in the market. The challenge is not so much in finding the solution, as in overcoming the corporate inertia of the firm’s business model, to get those solutions implemented.
Billing by the hour a problem? Fine … replace it with value pricing or risk sharing models. But how does one actually do that with the same ease as filling in time sheets? (My view on the billable hour is that it is an excellent example of something that will eventually go the way of the dodo, but first the "factories need to be reinvented.")
“Generation Y’s” want flexible work arrangements and a work/lifestyle balance? Fine … let them work from home and other remote locations. But how does one actually do that while maintaining teamwork and service quality?
You want to be able to harness the combined intellect of your firm whenever necessary, to craft strategy, to develop virtual client teams, to share knowledge? Fine … create an online collaborative system using one of the emerging Web 2.0 internet based tools (see here and here.) But how does one actually do that in an environment where there is deep suspicion about such tools?
Performance levels differ widely amongst individual lawyers and sometimes, truth be told, some (ever more expensive) junior associates do better work and are more valuable to the firm than some of their senior colleagues. Fine … develop a system that easily measures performance and links it to reward in a way that is seen to be transparent and fair. But, how does one actually do that where the hierarchy of partners and associates/assistants developed over a century is heavily entrenched, true performance is difficult to measure and compensation discussions are often a source of considerable stress?
Some firms are quicker than others in developing ways to implement solutions. Market changing revolutions that effectively deconstruct the environmental parameters of a profession, like those that will follow final enactment of the Legal Services Bill in England and Wales will catalyse a whole slew of innovations and firms elsewhere would do well to watch those in England carefully. Likewise developments in Australia. Sometimes, there may be some “first mover advantage” for firms that adopt new practices quicker. More often that not, though, it is the “second mover” that gains the real advantage. Innovations are typically adopted sequentially. First: by small, fringe firms with entrepreneurial leaders and less corporate inertia. Second: by market leader firms that can afford to “try” something new without the change (or possible failure) being threatening. Last: by the mainstream in the middle, who are driven (rightly, in most cases) by precedents.
If you are a leader in a mainstream firm, the key is therefore to constantly be a thoughtful observer of what your competitors are doing and what your people are saying. Then, to have the courage to shamelessly “steal” the best ideas that others come up with and build them into your firm.
Hat tip to Alan Greenspan, who wrote of Edison and the adoption of electricity in industrial America in his book The Age of Turbulence: Adventures in a New World
, on page 474-475.Its Not Just About The Money
0 Comments - Posted By Rob Millard In Strategic People Issues , , - Permalink -
Today's New York Times (Saturday 1 December) has a great article on what some of the top US firms are doing to make the lives of their lawyers (especially associates) more convenient, happy, balanced and, above all, productive. With workdays routinely stretching into the evenings and weekends and the war for top quality talent intense, offering market competitive salaries is just the starting point in attracting and retaining that talent.
The article, For Lawyers, Perks to Fit a Lifestyle, lists a whole host of different ideas. (Click here for a PDF if you have trouble with the hyperlink.) Any group of professionals could brainstorm dozens more without even working up a sweat. The possibilities are endless. But why bother with these "soft" issues? Do they really drive profitability, or are they in reality unnecessary luxuries?
The perks seem to fit into three major categories:
1. Those aimed at improving productivity. These include concierge services; premier quality dinners delivered to the offices; naps rooms, well equipped gymnasiums, and arranging nanny services, to free up lawyers' time as they bill up to 60 hours per week and beyond. Blackberries, laptops and other "productivity aids" that are now de rigueur in many firms also fall into this category.
2. Those aimed at improving lifestyle. These include sabbaticals to pursue diverse interests; guarantees for home mortgages; gestures like DLA Piper reimbursing employees $2,000 when they buy a hybrid car that acknowledge greater environmental awareness amongst today's young professionals; anything from coaches and psychotherapists to masseuses to provide help in combatting stress, burn-out, depression. Also in the category are improving the quality of firm functions (better quality food and premier wines, for instance.)
3. Those aimed at simply making people feel appreciated. In the frenetic, stressful and intense work environment that characterizes a premier commercial law firm today, it is easy for people to feel under-appreciated. This has led to some firms tackling the issue of making people feel appreciated (a spokesperson for Seattle based Perkins Coie talks of "random acts of kindness") that are executed in a deliberate rather than random fashion. These vary from financial bonuses to something as mundane as unexpected milkshakes appearing on desks.
All this serves to create a culture of: professional excellence ... mentoring and training ... high performance ... collegiality ... concern for individuals ... balancing work and lifestyle. It binds talent to the firm and makes lawyers more productive and enthusiastic about their work.
As such, these measures are worthy of very, very serious consideration indeed.
Don't Be a Cultural Knucklehead
2 Comments - Posted By Rob Millard In Culture , - Permalink -
Seth Godin points the way to an excellent posting on Pamela Slim's blog Escape from Cubicle Nation, titled How not to be a cultural knucklehead in a global business world. ESSENTIAL reading for those who operate internationally.
Some gems:
Be aware of the level of interpersonal formality in the society in which you are working. German professionals do not appreciate being introduced as "my mate Klaus" yet Australians find use of titles or even surnames pompous. In more formal cultures, use salutations rather than first names ("Dear Dr Schmidt" or "Dear Tanaka-san" (in Japan) rather than "Hey Klaus" or "Hi Jim") in emails.
Continue Reading
Dream Teams or Dysfunctional Nightmares
0 Comments - Posted By Rob Millard In Strategic People Issues , , , - Permalink -
A new year beckons! What do you plan to do in your firm, in 2007?
Are you contemplating going out into the market, to hire brilliant individuals away from your competitors, to let the magic of Dream Teams loose in your firm? If so, be certain that the magic that is released is not black magic! You may first want to read a piece by Geoffrey Colvin titled When Dream Teams Fail that was published in Fortune recently.
Dream Teams are a beguiling idea. Assemble a team made up of the very best brains and success will be assured, right.......? All too often: No, not really.
Continue Reading
Closed Door Policies .....
0 Comments - Posted By Rob Millard In Strategic People Issues , , , - Permalink -
Imagine giving a group of bright, talented twenty-something professionals in your firm the following test:
Question 1: Which statement most accurately represents you:
A. I am determined to grow my capabilities and skills as a professional and value mentoring and nurturing from senior members of my firm very highly.
B. I aim to grow as a professional and can tolerate an environment where I have to do so on my own, but if an opportunity for a more professionally nurturing environment presents itself, I’ll take it.
C. I am quite happy not to receive mentoring or nurturing input from experienced, senior professionals in my firm Continue Reading
Positive Deviancy
1 Comments - Posted By Rob Millard In Culture , Innovation , Inter-Generational Issues , Strategic People Issues , , , - Permalink -
One of the worst things that can be said of any professional practicing in a professional service firm is "he/she doesn't fit in here." Career-wise, it's often a death blow. This is particularly true in the precision-based professions such as law and accounting (as opposed to creative/design professions, where deviancy is more tolerated and sometimes even encouraged.)
Herein lies a clue as to why these firms often experience such difficulty innovating or even changing. Probably without even realizing the impact of what they are doing, they positively stamp on anything or anyone that goes against the norm.
Continue ReadingRoots and Wings
0 Comments - Posted By Rob Millard In "Off the Wall" Insights , Culture , , - Permalink -
Frequent readers of this blog will know by now that I have a particular interest in differences in culture across different countries or social groups; the alignment of culture and strategy; and the proactive evolution of culture in professional service firms to support and drive strategy.
Here's a quick quiz that illustrates one of the key variables in culture, especially internationally e.g. between east and west. I'm sure that you'll find it fascinating.
Continue ReadingMeasuring and Describing a Firm's Culture
0 Comments - Posted By Rob Millard In Culture , - Permalink -
Does a firm's culture influence the likelihood of successful execution of its strategy?
You bet it does! Culture is an extremely important strategy driver.
Misalignment between what strategy needs and what the firm's culture supports or evens allows, is one of the most fundamental causes of breakdown in strategy execution.
This makes it critical to, in the first instance, be able to accurately measure and describe a firm's culture. Then only can its alignment with strategy be assessed.
There are many tools on the market that purport to analyze culture. Most rely on "scale of 1 to 5" questionnaires that are translated into diagrams of one sort of another, to show where the firm is "strong" or "weak." The problem with most is that the ratings often relate only to the firm being surveyed. They are not benchmarked against the market.
This is a very significant failing. What, after all, does "4.2 out of 5" really mean? If all your competitors would score 4.6 for the same question in the same survey, then you are performing poorly. If they would score 3.6, then you are doing well.
Continue ReadingTrust and Betrayal in the Process of Strategy
0 Comments - Posted By Rob Millard In Culture , Leadership , The Strategy Process , , , - Permalink -
Religious conviction; the national Treasury; a firm handshake: all symbols of trust that evoke expectations. Most importantly: the expectation that one will not be betrayed. If there is one place where trust is paramount, it is in firms that practice professions such as law, accounting and consulting, where the service being delivered is so intangible that trust is the only assurance that the client has, that its work will be done properly. Small wonder that trust-based relationships both with clients and internally are the very cornerstone of the cultures of such firms; certainly those at the 'top of the curve.'
The March/April edition of the Harvard Magazine contains an article on the differences between risk aversion generally and aversion to being betrayed. It makes fascinating reading and, I think, introduces a seldom-considered facet to the process of strategy.
Continue ReadingHarnessing the Phoenix
0 Comments - Posted By Rob Millard In "Off the Wall" Insights , Competitive Intelligence , Culture , Innovation , Inter-Generational Issues , Leadership , Strategy 101 , Tools for Strategists , , , , , , , - Permalink -
Surely the most dramatic mythological example of rebirth and renewal, is the Phoenix (or "Firebird.") It is found in ancient Egyptian mythology, various myths derived from it and, most recently, in Professor Albus Dumbledore's study in Harry Potter.
Said to live for 500, 1461 or for 12594 years (depending on the source), the phoenix is a bird with beautiful gold and red plumage. At the end of its life-cycle the phoenix builds itself a nest of cinnamon twigs that it then ignites; both nest and bird burn fiercely and are reduced to ashes, from which a new, young phoenix arises. The bird was also said to regenerate when hurt or wounded by a foe, thus being almost immortal and invincible.
Imagine, for a moment, that you were able to regenerate your firm in this way. Miraculously, you were able to instantly transform it into an organization of the highest performance with, what's more, that performance being sustained.
Continue ReadingThe Entitlement Generation
0 Comments - Posted By Rob Millard In Inter-Generational Issues , , - Permalink -
Graphic from Nicholson Cartoons
I mentioned in my previous post that Graeme Codrington is a guru of some stature when it comes to matters of intergenerational issues in the workplace. Here is a post on his blog TomorrowToday.biz, about those on the cusp between Generation X and Millennials, now apparently nicknamed the Entitlement Generation.
Continue Reading