New approaches only become embedded in the culture when it is clear that they work and are superior to old methods. Use lots of talk to hype up the validity of the new practices and promote and reward those who support and implement them.
This model of leading change is, in my view, important to leaders of professional teams in two ways. Although major changes have to be led, as Kotter suggests, by a team of senior people, it is evident that team leaders throughout the firm have a significant part to play in communicating the desired outcomes and strategies. They are also responsible for empowering their colleagues to remove obstacles and implement ideas to improve performance. Furthermore it is desirable for them to have played their part in the formulation of the vision in the first place. It is instructive to see how closely the stages outlined were followed in the successful ‘culture change’ programme at DMH, described in the case history below, even though the people involved were not aware, at the time, of Kotter’s work.
The second reason why the model is helpful is that it may be used as a guide for leading changes that are specifically relevant to the work of your own team. You and your colleagues may wish to make some changes, say, to improve service quality, modify working practices, introduce new team processes or move into new markets. The framework outlined, with minor modifications, should help you to succeed.
Leading change – a new culture at DMH
This case history demonstrates the importance of both a strong lead from the top and effective team leadership throughout the firm.
DMH is a medium-size law firm with offices in Brighton, Crawley, Worthing and London. In 1997 a new managing partner was elected. Together with his colleagues he revolutionized the business. Tim Aspinall, the new Managing Partner, had this to say about the firm before the changes came to fruition:
The firm had grown over the years into a multi-site operation with seven branches, all but two of which concentrated principally on private client activities. There were very different service values among our lawyers. Some lawyers behaved as individuals who just happened to practise together. There was a tension between the private client activities based around the high street and the commercial activities based around corporate clients. Nobody was prepared to resolve these tensions as it involved difficult decisions being taken. People were very busy generating fees but these were not always translated into profit. Financial rewards were still broadly based on the ‘lockstep’ principle by which the shares of profits for partners were determined primarily by length of service. We were reasonably successful despite the problems. Local accountants, bankers and other business people said that the firm was underperforming in relation to its potential. The firm was a slumbering giant.
As is often the case, the catalyst for change was a crisis. In 1996 a small group of successful partners who recognized the need for major changes began to contemplate leaving the firm. One of them did leave. Tim Aspinall was encouraged to run for managing partner.
Tim Aspinall described his thoughts:
I was in two minds. I enjoyed practising law. I was 39 years of age and I had concerns about my future career if I became managing partner at such a young age. On the other hand I had become interested in business, leadership and management. I had some clear ideas about what could be done but I was also worried that the firm might not be ready for them. In the end, knowing that I had the support of some key people who were, themselves, desperate for change, I decided to accept the challenge. I decided it was an opportunity that might not come again. I told the partners that I would like to do the job and I explained to them how I would like to see the firm change.
Tim Aspinall’s manifesto for change was to:
- Create a coordinated business with a clear mission and structure.
- Significantly develop the more profitable commercial side of the business.
- Promote the concept of profitable fee earning rather than the maximization of fee income whether profitable or not.
- Close the uneconomic branches.
- Set up a matrix of teams composed of legal specialists on the one hand and multidisciplinary teams to serve the needs of particular market sectors on the other.
- Reduce, and eventually give up, legal aid work.
- Appoint real leaders as heads of departments and teams with accountability and responsibility for results.
- Deliver more profit for the partnership.
Tim Aspinall also told his colleagues that in order for the job of managing partner to be valued properly he needed to be rewarded on the basis of his performance as a leader rather than as a lawyer.
In January 1997 the incumbent managing partner, who was nearing the end of his term of service, indicated that he was happy to give way, and Tim Aspinall was invited into office. The partners also voted Derek Sparrow, a corporate law partner, into office as Chairman. Some partners thought that he would act as a check and balance for some of the more radical aims of the new managing partner. Other partners saw him as someone to turn to if they had significant worries about the way things were developing. In the event the chairman was very quickly convinced that the new direction envisaged for the firm was the right one. He gave his full support for all of the developments from January 1997 onwards.
Tim Aspinall knew that the changes that he envisaged would take three years or so to be fully accepted and implemented. He felt strongly that he needed to progress with the consent of the partners, other lawyers and support people and that therefore extensive consultation would be necessary. He realized that he would have to invest a good deal of his own time in the process, to lead by example and to harness the enthusiasm and dedication of professional and support leaders throughout the firm. The first step in 1997 was to appoint a new management board of partners who were sympathetic broadly with the desired changes. This was not too difficult because the firm’s constitution allows for managing partners to appoint their own boards. The firm was reorganized into teams of specialist lawyers and multidisciplinary teams to serve market sectors and specific clients. Individuals with evident leadership capabilities or potentiality were selected to lead the teams. Accountabilities were defined for members of the management board and team leaders throughout. An intensive programme of training courses was set up to enhance leadership skills within the context of the desired new culture. Emphasis was placed in these courses on leading change, developing and implementing business team strategies, communications, coaching, motivation, influencing, forging teamwork and dealing with conflicts. Workshops on marketing, selling, financial management and service quality were also held for leaders and team members.
It soon became evident that consultative workshops held every two or three months were making a major contribution to refining the vision and to the establishment of the new culture. Everyone in the firm, professionals and support people, was invited to attend. Participants worked in small groups to evolve the firm’s thinking on such matters as service quality, marketing, selling, measuring performance, rewards, conditions for staff and teamwork. In the early days the outcomes of the workshops were largely aspirational. The firm’s leaders, with their teams, steadily turned those aspirations into effect, fostered new methods of working and encouraged more appropriate ways of behaving. Ultimately clear cultural values, broadly agreed, evolved to guide the partners and the staff in appropriate ways to tackle jobs, work together and relate to the clients.
New team leaders were appointed to replace those who, although they may have been outstanding lawyers, were less effective in the leadership role. Every effort was made to help those replaced take on other roles within the firm. Tim Aspinall said:
These days many more young lawyers look forward to becoming team leaders. They know that to become a partner it is now important to be more than a first-class lawyer. They need to be able to develop new business and to lead a team. We think it takes three years or so for qualified lawyers to become really effective professionally. They may then be ready to become a leader of a small team. We no longer feel that it is necessary for a lawyer to be a partner before he or she assumes leadership responsibilities.
DMH has modified its financial reward system so that for both partners and others performance in all aspects of the work is recognized. For team leaders, competence in leading, as well as in legal work, is one of the criteria. Tim Aspinall said, ‘This is a very visible way of reinforcing our belief that leadership is critically important’.
DMH has not achieved its changes without a handful of casualties. Tim Aspinall said:
We had to part company with two or three partners who didn’t like the changes and refused to be accountable. It was not easy to do that with partners who earned high fees for the firm. We took the view, however, that if they were opposed, in word and deed, to where the majority of us wanted to go then this outweighed their fee-earning contribution. The buck stopped with me and taking the decision to part company was a risk. The partnership might have voted against. If that had been so it would have been a resigning matter for me. There is a lesson here for identifying and developing leaders in law firms. Lawyers because of their training and professional duties tend to be cautious and risk averse. Leaders have to be the reverse. We have to take this into account in appointing our team leaders at all levels.
DMH has made huge strides since 1997 and now receives many accolades, including being a Legal 500 and Chambers recommended firm. It is a much more profitable business than it was in 1996. It is regarded as an attractive firm in which to work. It has prestigious clients and receives excellent feedback on its service. In Tim Aspinall’s view the changes at DMH that are now in place, and working, are because they have team leaders who display the following characteristics:
- They are good professionals, business people and leaders within their own groups and as members of the larger DMH team.
- They accept and promote the principle of collective responsibility whereby once decisions have been made they are enthusiastically supported and put into effect even if they were opposed during the decision-making process.
- They lead by example and ‘live’ the new cultural beliefs and values.
- They spend a lot of time communicating the new ways of doing things.
- They give a significant amount of time to their leadership responsibilities.
- They are good at coaching people to change and they empower their team members to provide their own ideas for improving performance within the framework of the new developing culture.
- They think that leadership is important and are enthusiastic about the tasks involved
It is clear from DMH’s experience that welding major changes into the fabric of a firm requires not only a strong and determined lead from the top but also enthusiastic and competent team leaders at all levels. It is very much a team effort.