Cashroom Blogs Archives and Information - Page 17 of 17

The Cost of Charisma

When you think of a good charismatic leader, who do you think of? The common response is to think of those leaders that have a high profile, particularly in the media, such as Richard Branson or maybe even Alex Ferguson. They are very different but both seem to share one thing; charisma.

However, what do you want from your leader? It might be the same qualities demonstrated by the two individuals mentioned. Or it may be something that feels altogether different. Because when we consider a leader that is much closer to home, it might not be just about what they can do but also how they make us feel.

The charismatic leader has many qualities that can never be underestimated. Their ability to engage an audience, to inspire an individual to want to follow them, not just because they have to. The charismatic leader can not only do this with their peers, colleagues and employees throughout an organisation, but also with clients and valued stakeholders. They seem to have an energy that attracts people to them, with enthusiastic ears, always willing to listen to what they have to say.

It is important that people trust what their leader says. This can also be the case with the charismatic leader, but not always. And whilst the charismatic leader ignites passion and purpose in the short term, what about long term strategy and results? How important is it to know that the leaders can not only open their little black book of contacts to generate significant revenue now, but also to set their organisation up for success once they have left to move on to pastures new or to retire. It is common practice for a new Chief Executive to already have their ‘exit strategy’ in place, on the day that they arrive, very often with their anticipated ‘end date’ being within three to five years. Does this promote a vested interest in the long term or just the short term? How will they be rewarded on departure, on achieving certain targets during their period of tenure, or securing them long after they have left?

Jim Collins, author of ‘Good to Great’, considers this in his Harvard Business Review article from 2001. He studied organisations that had gone through significant transformation and analysed their performance not just after a brief period of time, but after fifteen years, to see which ones had successfully embraced the changes to secure long term results. He then analysed the leaders of those organisations to see what qualities they had to ensure such a significant achievement. Collins looked at 1,435 ‘Fortune 500’ companies to study which companies passed the test of ‘cumulative returns at least three times the market over the next fifteen years’. Only 11 did and as he mentioned these were not a sample but rather the ‘total number that jumped all the hurdles and passed into the study’. Interestingly, the study did not begin with the sole purpose of analysing the senior executives, rather looking at which companies had the ability to jump from ‘good to great’. However, as the study progressed it was noted, ‘we can’t ignore the top executives even if we want to’. Collins identified two key components that were common to all these ‘long term leaders’ regardless of sector, size of organisation or time of transition The two key qualities were humility and determination.

The results of the article ‘Level 5 Leadership: The Triumph of Humility and Fierce Resolve’ may sound counterintuitive today but when the article was published it was ‘downright heretical, the corporate scandals hadn’t broken out and almost everyone believed that CEO’s should be charismatic larger than life figures’.

This falls very much in line with the idea of ‘Servant Leadership’ identified in 1970 by Robert K. Greenleaf, the idea that the leader ’holds’ that position in order to make sure the organisation is secure, flourishing and set for success so the next leader can take over the mantle to continue the good work, always with the philosophy of doing what is best for the company. With one eye on the present, the servant leader also has one eye very firmly on the future, way beyond the date of their own exit. It has to be said the charismatic leader is most certainly capable of determination and also humility. Just because they might be an extrovert, a visionary, a great speaker, and a good relationship-builder does not mean they are not humble, but it has to be that way. The charismatic leader must ensure, and demonstrate, that their primary role is for the benefit of the organisation, not themselves.

So what does this mean in practice to have one eye on the present and one eye on the future? It actually means making the most of the skills they inherently have. Whilst they do have the energy and personality to attract the attention of all involved, to be a visionary and to paint a picture that people aspire to, it cannot just stop there. The great leader will not only paint such an inspirational picture of the potential that is available, but will also articulate this with complete clarity. As a result, as an employee, not only do I see the vision of the future but I know exactly the role I play in order to allow the organisation to reach its full potential, because I will be reaching mine. I will understand the very purpose, the core, of what the organisation represents, be given clarity regarding the long term strategy, and understand our short term objectives. I will understand what I am doing, when and why. Not only that but the successful leaders of today will understand that the directive ‘tell and do’ leadership style is now outdated, that the true transformational leader will be empowering, an ideas generator rather than an ideas giver, a coach and motivator, as clearly identified by Bernard M. Bass 1985 in the work on ‘Transformational Leadership’ (later developed with Bruce J. Avolio). They will be collaborative, allow people to take part in the decision-making process where possible. They will give people a voice.

The leader here understands the significance of the next generation, ensures a clear and robust succession plan is in place, so when they depart, there will be a confidence that the legacy left is one that will see the organisation into the next decade, or even century. Also, that the younger generation actually want to step into the shoes of their elder leaders, that such a position is attractive, empowering and worth waiting around for. Already the younger generation not only understand that the ‘job for life’ is unrealistic, but they don’t even want it.

The great leader also paves the way for the next leader. What if the next leader is by nature, quiet and more reflective? They may think they have big shoes to fill, and they will, but to be given the seal of approval by the outgoing, and possibly more popular leader, genuinely and wholeheartedly, is important. And the next leader can rest assured, that although maybe quieter and more introspective, maybe not as natural at public speaking or radiating energy, they might just have a couple of qualities that do come more naturally, the qualities that Collins recommends so highly, humility and determination.

Katherine Farnworth

Reference

Jim Collins, ‘Good to Great: Why some companies make the leap and others don’t’, 2001.

Jim Collins, Harvard Business Review ‘‘Level 5 Leadership: The Triumph of Humility and Fierce Resolve’, 2001

Bernard M Bass, ‘Transformational Leadership’, 1985 (developing the original work of James MacGregor Burns, 1978 and laBruce J. Avolio)

Robert K. Greenleaf, ‘The Servant as Leader’, Essay, 1970.

Should I Stay or Should I Go?

I recently came across an article from January 2014 which reports that only 68% of junior lawyers aspire to become a Partner. Perhaps more interestingly, of the 1800 lawyers surveyed worldwide, just 37% of those aged 26-30, and 43% of those 30-40, viewed law as a job for life. I suspect that a similar survey a generation ago, or even 10 years ago, would show a vastly different result.

The key concern identified was flexible working, and a desire for a better work/life balance. It made me wonder whether the legal profession has fallen behind others in terms of technology, or alternative, more flexible, ways of working. Perhaps it is just the nature of a lawyers’ work, or the fact that a reduction in available work has meant lawyers having to do more work, and resultant longer hours, to make the same fee income as they did 6 or 7 years ago.

The other article I came across was again on the The Lawyer website . It reports that Mishcon de Reya, the international firm with offices in London and New York, have told their lawyers they can work as many or as few days as they want. In other words…unlimited holidays! They can also work anywhere they want. Sounds good doesn’t it?

For those who have felt awkward about working from home for a morning / day, for fear of it being deemed as ‘skiving’, a culture where this is the norm sounds great. In my personal experience, working from home is in fact often far more productive. With nearly every firm operating a time recording system of some sort, or means of tracking fee income per fee earner/Partner, those sitting at home watching Jeremy Kyle would soon be caught out anyway.

So, the point is – will we see more of this in the future, as a way of firms retaining staff in the profession, and in their firm? It could also mean that large firms need less office space, thereby saving on rent, heating and lighting etc etc.

The flipside is that some will say the arrangement at Mishcon de Reya will actually result in people taking less holidays. Without the ‘structure’ that comes with an annual holiday entitlement, will people compete with each other to take the least holidays? One key phrase that Mishcon de Reya state is that the flexible working is unlimited, ‘as long as it doesn’t affect their clients’. Will it mean that lawyers can never fully switch off, or leave work behind?

I am interested in your thoughts on this, and whether such measures at your firm would actually make a difference to your views on whether law is a career for life?

Gregor

Please connect with me on LinkedIn and Twitter for future articles and blogs

Becoming a Partner at a Law Firm

You may have worked hard for years, progressing through the ranks from Trainee, to Assistant, to Associate, before finally getting invited to become a Partner. On the other hand, you may be an Assistant who is frustrated at the management of your firm, or simply decided you like the idea of ‘going it alone’. Either way, you are to become a Partner in a law firm. So, what do you need to do from the point of view of your regulatory body? The answer is…very little!

In Scotland, provided you have 3 years unrestricted practice, you require to attend a 1 day mandatory practice management course within a year of becoming a Partner. That’s it! No assessment to pass and no further training, even if you are to set up alone, be responsible for accounts rules compliance, setting up anti-money laundering procedures, or dealing with client complaints etc. In England and Wales, you do not even require to attend such a course, and there is no requirement of being in practice for a certain length of time before becoming a Partner.

Should the regulators require more of a Solicitor who intends to become a Partner? If the regulator is seeking to ensure the protection of clients, should those becoming a Partner require to demonstrate that they understand the responsibilities of their role? Does it depend on whether they are going to be in practice alone? Does it depend on the type of work they are going to do? Does it depend on whether they are going to be responsible for cashroom compliance, or anti-money laundering?

The Law Society of Scotland recently instructed an independent review of the mandatory practice management course and associated practice rules. The report makes for an interesting read. I think that it reaches a sensible conclusion that if there is to be a mandatory course, there should be some sort of assessment to ensure that those who are required to attend, understand what they are being told. Otherwise, it is simply a tick box exercise to say you were there, and whether you engaged in the content or not, is irrelevant. The report also recommends an additional module for those likely to immediately become cashroom partners, or solely responsible for running the business, and refresher modules for all partners in certain areas as part of their CPD cycle (every 3/5 years).

I would welcome any comments / ideas you have, and would encourage Scottish solicitors to respond to the Consultation which is now underway. I think that more guidance on the various responsibilities required of a Partner can only be a good thing, and that some form of assessment ensures that. We do however require to be careful not to make this too onerous, so as to put practitioners off becoming a Partner or setting up their own firm. What do you think?

Gregor

Please connect with me on LinkedIn and Twitter for future articles and blogs

Innovative Legal Business Models

Many of you will have read my colleagues’ article last week on what 2014 may hold for the legal profession (https://www.thecashroom.co.uk/legal_article/profession-2014/ ). One thing we are likely to see as a result of all the points mentioned in that article, is more by way of innovative legal business models.

We have already seen the emergence of businesses taking a new approach to a very old profession, such as LegalZoom, Rocket Lawyer and Riverview Law. While each of these may have slightly different models, the point is that they have taken a fresh look at (a) what clients want, and (b) how legal firms provide that to them.

While the precise need of each client will be different, on the whole, what clients want is a quick and cost effective solution to their particular issue. Your average individual or small business client does not care if you are the most intelligent lawyer in the country, what they want is you to buy/sell their house, sort out their divorce, resolve their personal injury claim, draft a basic employment contract, or set up their company as quickly as possible. For most, a lawyer is somebody they have to use in order to achieve a particular outcome, and the quicker and cheaper it is to reach that outcome, the better. For clients who require bespoke or detailed advice on a complicated area of law, there are always going to be firms that provide that, at a corresponding pricing point!

What the innovative firms have focussed on is providing services at a time, and in a way, that is most convenient for the client. They allow clients access to services in the evening and at weekend, rather than being bound to the usual appointment between 9am-5pm, Monday to Friday. Some have a portal or other way for clients to log in at any time of the day or night, to access free forms and documents, or to check on the progress of their case. They are also providing these services at a fixed cost – something which is becoming more and more attractive to clients.

These businesses have clearly taken a step back, looked at what they think is most important to clients, and done something about it. Out are hourly rates, postal correspondence, and waiting for an appointment to meet a lawyer face to face (unless necessary), and in are transparency over fees, fixed costs, and access for the client to his case/documents online, at a time convenient to the client. It would seem that now, even for lawyers, ‘consumer is king’.

I think that we are going to see more legal firms adopt these types of business model and feeing structures, and the expansion of the current market leaders (Legal Zoom have, after all, recently raised £122m of private equity funding – https://www.legalfutures.co.uk/latest-news/legalzoom-eyes-acquisitions-taking-major-private-equity-investment ). There may of course be plenty of work for those who remain more ‘traditional’ firms, where they have a long established and loyal client base. The point is that those firms need to consider how they keep that work in the future. Are the next generation going to be willing to pay more for ‘traditional’ legal advice too, because they know and trust the firm, or are they going to ‘google’ what they need, and use a firm that provide their services online, at a time more convenient, and at a cheaper price?

The important thing is to take time and think about all of this, how it might affect your firm, and make strategic decisions on how you approach the future. The legal market has changed, and clients’ behaviour has changed. As a result, I think that firms need to respond – either to change as well, or by taking steps to retain their loyal client base. Either way, doing nothing is not an option!

Gregor

Please connect with me on LinkedIn and Twitter for future articles and blogs

What does the future of the legal profession look like?

When people consider the future of the legal profession, many still think of solicitors sitting behind large wooden desks, in grand old buildings, a library of books behind them on a bookshelf, and filing cabinets full of client files. While that may still be the reality for most, we are seeing more and more firms going ‘paperless’. This often means documents being stored more securely electronically, in a way that is easier to find and access at a future date, and freeing up space within their office for staff that make the firm money.

We are also seeing a growing trend of solicitors considering whether they even need an office at all. The new generation of client wants value for money, access to legal advice at a convenient time for them, and in a convenient way. With internet/email access and a mobile phone, many types of legal work can be easily done outwith the traditional setting. Often legal work does not require many face to face meetings, and in fact in some types of work (eg personal injury), a solicitor may never meet their client. Therefore, if a firm can provide a slick and efficient service, for a lesser fee, by cutting unnecessary overheads, they are going to win more clients. Even if your line of work does require meeting in person, there are many serviced offices available in convenient locations for your client, and I don’t think clients are bothered these days about whether your name plaque is on the wall. The additional services required, such as somebody to answer the phone, to run your cash room, and to type letters/documents, can all be easily outsourced.

Even for larger firms, who are going to maintain an office, these are no longer old grand townhouses, but modern buildings designed to accommodate up to date IT services. I think that the forward thinking of these firms will also continue to encourage provision of remote access, hot-desking, flexible working arrangements and amended hours. Why wouldn’t they?

Remote/home working allows firms to retain young talent, male and female, who may have children to look after, but still want to progress their careers. The same applies for amended hours (eg starting/finishing earlier and condensed hours) which will often work better for childcare arrangements. There may also be a benefit to your clients that somebody is there to answer the phone, or respond to enquiries, before the rival firm down the street that doesn’t answer calls until 9am.

Flexible/remote working and hot-desking also frees up space within your office, or may in time allow you to lease slightly smaller premises and thereby make cost savings. It also appeals to young lawyers entering the profession. These are people who would happily work from a laptop, in a café or at home. In fact, they are not only happy to do it, but they expect to be able to do it. I have heard of banks and large accountancy firms seizing upon this, and putting clauses in employment contracts that require staff to work outwith the office a certain number of days a week. I think that law firms will eventually catch up with this.

The issue which may take longer to address is the perception that the person who sits at his or her desk for the most hours every day, is the ‘hardest worker’. This doesn’t take account of two important things: (a) people working more efficiently, and (b) people working remotely or flexible hours. Perhaps over time, firms will look at efficiency and fee/new client generating work as more important than spending endless hours at your desk!

So what does the future of the legal profession look like? Who knows, but I think it is being forced to look at cheaper, more efficient ways of providing legal services to clients. The future of the legal profession is likely to lead to new and innovative ways of running a legal firm, with less non fee-earning staff, less need to be physically present in an office all day, and increased use of technology to provide services at times and in ways more convenient for the client, rather than what is convenient for lawyers. With the advent of Alternative Business Structures, there is now competition from non-traditional law firms, who are likely to have a better awareness of client behaviour and demands. Lawyers are no longer able to sit within their comfort zone, where they only have to compete with other lawyers.

Gregor

Please connect with me on LinkedIn and Twitter for future articles and blogs

Scale your business – how big do you want to be, and how quickly?

If you have answered the first three questions, this one should answer itself. If you have decided that you want to create a niche firm specialising in a particular area of law, acting for a relatively small market segment, and those clients will instruct you because of that expertise, you probably do not need to create a huge firm. However, if you want to create a firm acting for a wide range of commercial clients, across a wide range of market sectors, then you need the scale your business to allow you to do so.

The point is – let your market decide the scale of your business, not the other way round. There is no point in creating a large business, with all the costs that involves, if there is no need. Alternatively, a small business may find it hard to service the clients you intent to work for, or the work you intend to do.

The size of your business will also determine the capital required to launch it. All things being equal its easier to launch a small business than a large one. However, it’s easier to launch a larger business now than it was.

If you have compelling answers to the first 3 questions (What sort of law firm do I want to own, who are my prospective clients, and why should these clients instruct me?), then it will soon be possible to attract external investment to law firms. This should allow legal entrepreneurs to create firms with greater scale, more quickly than was possible in the past.

For a topical example, Google Brilliant Law.

David

What sort of law firm do you want to own?

This is the first article in the “Creating a Law Firm From a Blank Sheet of Paper” series, and it’s perhaps the most fundamental. Before you start ordering computers and letter head, think hard about what sort of law firm you want to create.

How many lawyers take time to think about exactly what kind of law firm they want to work in, and then set out to create that firm? Very few I suspect.

It’s a very personal question. It touches on the fundamental reason of why you became a lawyer in the first place. I dare say it’s different for each of us. But it is the key question to ask when creating your law firm.

If you became a lawyer because of the legal profession’s role in fighting for individual rights, then you probably don’t want to create a large commercial law firm acting primarily for large corporations. If you became a lawyer because you are interested in the process of starting and growing business, which create wealth, opportunity and employment, you might not want to create a niche criminal defence practice.

Trivial examples I know, but they illustrate the importance of the question.

But it goes beyond these trivial examples, to encompass all aspects of your firm. Do you want to have partner’s meetings in a lecture theatre, or do you want all your partners to fit round a board room table? Do you want to practice in a very specialised area of the law, perhaps in a specific sector, or do you want to act for a wide variety of people, helping them with more general legal problems?

The point is – spend time thinking about what sort of lawyer you want to be, and what sort of firm you want to create. These decisions will (and should) have a significant impact on how you create your firm.

The next question is – “who do I want to act for”.

David

« First ‹ Prev 14 15 1617