Over dinner with a colleague, the question of where should law firms invest their change dollars came up. The basic concept is you divide a firm’s lawyers into three groups: #1 gets it, and is already making changes to the way they price and practice. #2 is somewhere in the middle, perhaps willing to embrace some changes, but not really taking proactive steps. #3 is oblivious to the need or unwilling to make changes, since the old way has been working fine for so long.
So the question is where should a firm commit resources to improve its operations and bottom line? Which “third” of the firm will generate the highest return on investment in change? Here are some pros and cons for investing in each group:
#1 Pros: This group is already well on their way and will quickly adopt any changes that help them improve. In the classic style, this is investing your dollars on the highest performing part of your business.
#1 Cons: This group will keep adopting change no matter the investment. Spending money here may well have low returns, since the group is already well on its way to the New Normal.
#2 Pros: This group is generally amenable to change and likely just needs some encouragement and exposure to new thinking. Dollars invested here will likely return immediate value.
#2 Cons: The return on investment from this group may not be as large as #1, since this group may be willing and able to only go so far. So although quick returns may be seen, they may not be deep and sustainable.
#3 Pros: This group has the most ground to gain and any adoption of change will bring significant returns.
#3 Cons: With a history of inability and/or unwillingness to adopt change and improve performance, group #3 seems the least likely to embrace new ways of thinking and doing.
The outcome of our conversation: My colleague pointed to traditional management theory, which says focusing on the bottom third will drive the entire firm up the change ladder. Although I see some logic to this approach, I couldn’t agree with it. My experience is that the bottom third in a law firm are so entrenched in their thinking and methods that they not only avoid change, they fight it. My gut tells me to invest in the high performance group - #1. It sends a message to them that their efforts and approach are appreciated, and it lets the other two groups know what the future needs to be.
Every firm will need to look at its three groups and decide what works best for them. Whether it’s adopting AFAs, embracing Legal Project Management, or even just implementing process improvement, law firms should consider the “Thirds” question and focus their investments on their highest ROI return lawyers.