In this series of articles by Yarman J. Vachha, Managing Director of YJV Consulting, he highlights the legal scene in Asia, the changes to the legal industry and the different resources available to law firms for expansion.
In the last article of the series, Yarman looks to future and share key leadership qualities.
I had previously discussed why firms need to look to the future as they cannot live in the past and will soon become irrelevant in this fast-paced tech-savvy environment. Disruptors are already well established and eating away market share of many firms. Artificial Intelligence (AI) is here to stay and will become more and more sophisticated. For example, standard contracts are now easily available from the internet and there are other solutions in the market to make the “bread and butter” legal services no longer the “black art”, which at one time nobody understood. And then there is the growth of the “in-house” legal departments eroding business lines.
Leadership for the future
To future proof themselves, law firm managing partners need to “lead” and not “manage”. I have encountered many managing partners attempt to manage (and at times micro-manage) rather than lead. Some are good at managing but many miss the critical role of a managing partner, which is to lead, have a vision and to inspire and drive the partners to achieve that vision. Then there are those who are poor managers, the ones that micro-manage or those who are indecisive and are too involved with the detail to see the bigger picture or just do not have time to manage. All these recognisable traits lead to inefficiencies and mismanagement, creating potential financial, retention and reputational risk for the business.
As I have shared in the first article, I believe that the day to day management of a law firm should be left to business professionals who have the necessary skills and experience. Hiring people with this skill set at an appropriate level for the firm is key. Firms need to hire business professionals at the right level and not under hire. I would caution that hiring at an inappropriate level (too junior or too senior) will lead to additional issues and may be a wasted investment. In the commercial world, all well-led and well-managed corporates will have a chief financial officer, chief information officer, chief marketing officer etc. These are professionals in their own right and contribute to the success of the business. Why then do law firms think that partners can run such functions in which they have no real expertise or experience? Part of this stems from a “cost” rather than an “investment” mentality. I think what is not appreciated is that partners are been taken away from their core competencies and thrust into something that they are not trained for. What is not accounted for in the Profit & Loss Account is these lost partner hours that could be better utilised in marketing and discharging work which ultimately adds to the bottom line.
In addition to having a sound professional support infrastructure, it is important for leaders of law firm to interact within the industry, attend relevant conferences, keep up to date with major changes in the market and to respond promptly to the changes that are taking place in the industry. Keeping up with the legal press is also a must.
Law firm leaders need to have a strategy and a “laser-like focus” on what they want to achieve and have a formalised succession plan to ensure there is an ongoing legacy for future generations.
The key to relevancy is a vision, a stated purpose, an evolving strategy to move with the times, a laser-like focus on the ultimate goal, investment in a sound and professional support infrastructure. Bringing all these together requires a strong and decisive leader with an innovative and flexible mindset.
To achieve these goals, I do think it’s very important for the management of the firm to be inclusive and seek the opinions and insights of the lawyers and the business professionals who can help shape the present and future of the firm. Having a sharing and open culture is also important so that all employees know what the firm’s vision is and what are they striving to achieve.
At the end of the day, the management of a firm is in a stewardship role. The priority of these stewards should be lead the firm and make it better than it was when they were put in the position of leading the firm. Having this mindset will help shape and create a legacy for future generations. I would also encourage management not to take a short-term view on all matters. Particularly, longer-term investment strategies that are required in this competitive environment as the firms who take a short-term view are unlikely to survive.
We live in a new age of millennials who are entrepreneurs at heart and are very much plugged into the Gig economy and, much like all of us in this new age, want instant gratification. This group of young lawyers are the engine room of the law firm in the 21st century and very much the future of the business. This is where I believe the disconnect that occurs. The current leaders and managers in law firms are most likely middle-aged and “Gen X” brought up in a different age and with different values which included working hard, being in the office 9am to 9pm, and coming up through the ranks with the ultimate goal of being a partner in a firm. This is not necessarily the mindset of the modern lawyer who has many more life and work choices than the previous generations. Law firm management has to listen carefully to the modern lawyers and take heed of their needs to make them productive, engaged and to retain them in the business long term. Opportunities to work flexibly and remotely are high on their list. This could mean flexible working parameters and strong and secure IT systems to ensure effective and productive remote working. If this is what it takes to make this generation more productive and create an attractive long-term career path, then firms need to respond appropriately with both action and rewards to this changing world.
Women of law
Firms also need to address the ongoing issue of women leaving the profession. Law firms lose many talented women in which much investment has been made when they decide to have a family. Sadly, this talent is often lost for good. Firms should do a much better job of providing flexibility and alternative career paths thus giving these women an opportunity to look after their families and add value to the business.
Let’s not forget that 20 years down the line the same group of millennials will be leaders of the firm and that will have a different set of issues to deal with which we can’t even begin to imagine. I think if the current leaders can forge a blueprint for flexibility, succession, and legacy, this will be ingrained in the DNA of the young lawyers and will bode well for future generations.
In conclusion, my three top tips:
- Have a clear vision and purpose and set accountable milestones for these to be achieved and be inclusive of all in the firm
- Managing partners need to “Lead” not “Manage” leave the management and the execution of strategies to the business professionals
- Build a firm for the future with innovation, the millennials and women in mind.
This strategic and operational review which I have discussed in my articles is really where YJV Consulting’s expertise lies and is our sweet spot. We assist firms to take a hard look at their business, improve operations and profitability, strategise and identify a purpose and set help accountable milestones and targets.
This article is written by Yarman J. Vachha of YJV Consulting Pte Ltd.
This article does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. If you require any advice or information, please speak to a practicing lawyer in your jurisdiction. No individual who is a member, partner, shareholder or consultant of, in or to any constituent part of Interstellar Group Pte. Ltd. accepts or assumes responsibility, or has any liability, to any person in respect of this article.