Digital transformation has dramatically altered the legal industry and how it relates to clients, the workforce, and society in general.
Law firms that don’t adapt and, as a result, miss opportunities for growth, risk being overtaken by agile competitors who are more willing to embrace change. According to Forbes, research has shown that 38 percent of people enjoy leaving their comfort zone, while the other 62 percent don’t like to leave their comfort zone or rarely do so.
The legal industry is historically averse to change. Since lawyers have largely controlled all the industry components – education, training, the delivery of legal services, the judicial process, and regulation – they have been writing the industry’s narrative since the beginning of the profession. However, as Leon C. Megginson said in 1963, “According to Darwin’s Origin of Species, it is not the most intellectual of the species that survives, it is not the strongest that survives; but the species that survives is the one that is able best to adapt and adjust to the changing environment in which it finds itself.”
Business is resetting the legal industry’s culture, mindset, role, and purpose, and lawyers are now part of an increasingly diverse, technical, data-driven, and customer-service orientated sector. A 2020 Deloitte study found that digitally mature companies are about three times more likely than the digitally averse to experience growth in annual net revenue and net profit margins above the industry average.
Digital transformation has dramatically altered the legal industry and how it relates to clients, the workforce, and society in general. Deloitte identifies several critical transformational elements that mature companies need to invest in. These include data mastery, intelligent workflows, efficiency, service quality, customer satisfaction, up-skilling workforces, and a focus on growth and innovation. Unfortunately, these elements are much easier to identify than implement. However, change management can help.
What is Change Management?
Change management involves the strategies and protocols by which a company identifies and implements change in its internal and external processes. For example, change management is often necessary to successfully implement an organization-wide shift in leadership, culture, or technology.
There are three common types of organizational change. These include:
- Developmental change – improving and optimizing current processes, strategies, and procedures.
- Transitional change – moving an organization forward from its current state to solve a problem.
- Transformational change – fundamentally and profoundly altering an organization’s culture, core values, and operations.
With all the changes taking place in the world in the past few years, change management is now a critical business function. One example of when change management is necessary is implementing new technology within an organization.
How Does Change Management Work?
Law firms have developed around the way societies and businesses function. Embracing technology has become a crucial part of enhancing client relationships and efficiently delivering legal services. Firms can be more able to manage change by following these principles:
Align Strategies and Execution
Because change is often disruptive to many businesses, particularly law firms, you must explain why it is needed, what it should address, and who will oversee implementing it. Firms that fail to get all their senior management on board with the process find change extremely difficult, but those who align their data, technology, and firm strategy have the best chance for success.
Embrace Incremental Change
The success of change management depends, at least in part, on how well those involved accept the change, and it is extremely unlikely that a disruptive technology or process will be accepted immediately. Therefore, instead of upending everyone’s daily routine, changes should be developed and introduced incrementally. While significant changes can lead to unforeseen outcomes, small changes often focus on solving immediate problems.
Change management will fail if the way a firm communicates is not effective.
Use Data to Guide Your Decisions
Humans may be resistant to change; however, data doesn’t lie and is essential to change management in several ways. For example, it can help focus innovation, measure the success of a particular type of innovation, and motivate change. Data can answer these questions and help identify areas that need improvement.
Flexibility is critical to the success of any change management effort, as things will not consistently implement in the way you think they will. Building flexibility into your change management plan means that you’ll be able to go with the flow as the process evolves. Embracing flexibility can also prevent investing excessive time and money into a single project before realizing that it will not work.
Change management will fail if the way a firm communicates is not effective. Therefore, when developing a process to implement change, ask these questions:
- How do we communicate?
- What channels do we use?
- Who does the communicating?
In a law firm, many may be unsure about the necessity and efficacy of the change. As a result, these questions need to be answered before beginning any change process.
Next Step: Implementation
Once the principles for change management have been explored, the next step is to implement the change. To find out how CARET Legal’s end-to-end practice management system could make positive change a reality for your law firm, schedule your personal demo today.