At A Glance
Increase in Profits per Partner
As a leading provider of management advisory expertise for law firms worldwide, we understand the challenges and opportunities presented by the rapidly changing business landscape. We are committed to staying ahead of the curve and helping our clients navigate the complex and rapidly changing business landscape.
The journey of transformation is ongoing, however. The legal industry continues to evolve, and law firms must remain vigilant and proactive in their approach to change.
We recently came across an insightful article in the Harvard Business Review, “Persuade Your Company to Change Before It’s Too Late,” by Pontus M.A. Siren, Scott D. Anthony, and Utsav Bhatt The article provides a compelling case study of King & Wood Mallesons (KWM), a global law firm that needed to transform in the face of emerging market trends, but lacked the compelling public data to justify such a transformation.
The firm’s leadership team, including Berkeley Cox and Michelle Mahoney, recognized the need for change, but faced resistance from partners who were risk-averse and sought conclusive information before making decisions.
The market dynamics at play were complex. Emerging legal tech startups were promising to deliver routine legal services more effectively and efficiently. Clients, tired of high bills, were building internal capabilities to handle significant chunks of legal work. Leading accounting firms were publicly announcing their intent to build up their own legal services practices.
Young lawyers were expressing frustration with long hours of often mind-numbing work. These dynamics posed a material threat to the firm’s fundamental operations.
Key Findings and Recommendations:
The article underscores the importance of private data, which includes insights from employees, customers, and proprietary systems. This data can often provide a more accurate and timelier picture of the market landscape than public data. It can illuminate the risks and opportunities a firm faces and can be a game-changer in building the conviction to act. In the case of KWM Australia, private data was instrumental in revealing the firm’s commercial challenges at the low end of the market, where disruptive change often begins.
The article suggests that leaders can lower their threshold of proof by using frameworks and models to make sense of incomplete information. This approach was used effectively at KWM Australia, where frameworks like the information-action paradox and Christensen’s disruptive innovation model helped the firm interpret faint signals and spot trends that might otherwise be dismissed as the usual gradual churn of the market. The article also emphasizes the importance of developing a common language around strategic issues to ensure alignment within the organization. That was crucial at KWM Australia, where robust discussions about various terms, such as “legal tech,” helped prevent miscommunication and fostered alignment.
The article stresses the importance of acting before the need for change becomes glaringly apparent. By generating private data and lowering the threshold of proof, leaders can build the conviction to act and accelerate strategic transformation. This approach can save businesses from ending up on burning platforms, where rigidity increases at the very moment when flexibility is crucial. The transformation journey of KWM Australia serves as a testament to the power of acting early and decisively in the face of emerging market trends.
Credit: Harvard Business Review
Our approach is rooted in understanding each client's unique needs and challenges, and designing strategies that drive growth and transformation.
To illustrate the impact of our work, we present three recent client engagements that exemplify our commitment to driving innovation and profitable growth:
A law firm with annual revenues of $585 million faced competition from both increasing in-house sophistication of legal departments at a few of their top corporate clients, which represented over 25% of the law firm’s annual revenues. The law firm also experienced risk of competition from smaller more nimble law firms with many high-profile attorneys with entrenched corporate relationships, as well as competition from legal tech startups under review by the legal departments of their corporate clients. We helped them harness the power of private data and lower their threshold of proof to drive a successful transformation. As a result, they saw a 15% increase in profits per partner.
A UK-based law firm with annual revenues of £1.8 billion struggled to adapt to the digital age. We helped them implement a client-centric transformation strategy that included a significant deployment of legal tech solutions. This streamlined repetitive tasks, which once consumed tremendous labor hours, and led to a 12.5% increase in profits per partner.
A law firm was facing a similar situation to KWM Australia. We engaged the partners in a transformation process that showed them the need for an urgent response to competitive forces and the importance of embracing change. The partners agreed toa P&C Global-strategy solution, which included — optimizing talent in key positions, which elevated the firm’s successful adoption of emerging technologies and operational leadership; infuencing the partners’ willingness to invest in innovation, digital transformation; and the launch of a new remuneration and employee benefit schema, which improved employee and partner performance. The result: a 20% increase in profits per partner.
As legal technology and transformation experts, we are committed to helping our clients navigate this landscape and harness opportunities to drive innovation and successful transformation.
In the face of rapid change and disruption, the legal industry is at a crossroads.
The best time to act is now. Let’s work together to build a future where your law firm is not just surviving but thriving in the face of change. In the words of Peter Drucker, the Austrian-American management consultant and theorist, “The greatest danger in times of turbulence is not the turbulence — it is to act with yesterday’s logic.” Let’s embrace the turbulence, act with the logic of tomorrow, and shape the future of the legal industry together.