Page 50 - Legal Leaders 2018 Master Copy - 999
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have critical insights that could inform the analysis. She was incredulous, believing that the point
of hiring outside consultants was to avoid distracting internal stakeholders.
An independent consultant can ask questions, interview stakeholders, conduct objective
and unbiased research, and make recommendations without undue political influence. The best
outcomes, however, result from a participatory and cross-functional process in which
stakeholders from across the organization are involved; when there is a clear communication
plan about the effort underway that helps those not involved in the details stay abreast of
progress; and when those who are impacted have the opportunity to see both how decisions are
made and what data supports the various conclusions. This is often contrary to the paternalistic
mindset employed by many managers, where information is closely guarded. The rank and file,
perhaps via designated representatives, can and should have the opportunity to offer insights into
the day-to-day operations of an organization, and to illuminate and often dispel beliefs leaders
have about “how the sausage is made”; this creates more informed analysis and acceptance on
implementation.
Building a Data-Driven Culture
Good business leaders and consultants rely on objective data to inform decisions. Even
when data are limited, such as understanding how a competitor’s cost structure impacts its
pricing strategy, there is still a framework for plugging in whatever data are available and
assigning a corresponding confidence level. Many legal organizations lack data. Law
departments are beginning to understand the power of analyzing years of electronic billing
records to identify quality and performance metrics and to distinguish between reliable and
unreliable service providers. Law firms who have long treated “knowledge management” as a
document archiving exercise now embrace cost accounting and experience tracking in order to
better staff and price future services. Even so, data often still take a backseat in the strategic
planning decision framework.
In a recent strategic planning effort for a mid-sized U.S. law firm, there was strong
resistance to including any voices other than management committee members and top
rainmakers. The partners felt that sharing any financial data, revealing any organizational “dirty
laundry,” or even exposing strategic deliberations to anyone outside this group would likely
generate disastrous consequences. These partners had yet to learn what corporate strategists have
long known: Insulating those who devise strategy will create an echo chamber. Strong opinions
will override sound analysis; political considerations will gain undue influence; confirmation
bias will lead to analysis that supports the status quo and minimizes negative input; and, not
surprisingly, few decisions will be made that negatively impact the leaders devising the strategy
in any material way.
In a law firm this challenge is particularly acute: Partners are also owners, and they feel
they have a right to assert their voice in business strategy, so a common result is that partner
preference prevails over sound business judgment. The largest waste of time in a law firm
strategic planning process is to allow partners to endlessly debate esoteric concepts when neither
side has supporting data, and no matter what’s decided the partners have veto power if they don’t
like it. The single greatest approach to overcoming uninformed partner input is to have relevant
data on hand that supports a conclusion.
To be clear, partners may make decisions that are not in their economic self-interest, and
many do, but these can and should be conscious decisions. For example, many law firms
36
of hiring outside consultants was to avoid distracting internal stakeholders.
An independent consultant can ask questions, interview stakeholders, conduct objective
and unbiased research, and make recommendations without undue political influence. The best
outcomes, however, result from a participatory and cross-functional process in which
stakeholders from across the organization are involved; when there is a clear communication
plan about the effort underway that helps those not involved in the details stay abreast of
progress; and when those who are impacted have the opportunity to see both how decisions are
made and what data supports the various conclusions. This is often contrary to the paternalistic
mindset employed by many managers, where information is closely guarded. The rank and file,
perhaps via designated representatives, can and should have the opportunity to offer insights into
the day-to-day operations of an organization, and to illuminate and often dispel beliefs leaders
have about “how the sausage is made”; this creates more informed analysis and acceptance on
implementation.
Building a Data-Driven Culture
Good business leaders and consultants rely on objective data to inform decisions. Even
when data are limited, such as understanding how a competitor’s cost structure impacts its
pricing strategy, there is still a framework for plugging in whatever data are available and
assigning a corresponding confidence level. Many legal organizations lack data. Law
departments are beginning to understand the power of analyzing years of electronic billing
records to identify quality and performance metrics and to distinguish between reliable and
unreliable service providers. Law firms who have long treated “knowledge management” as a
document archiving exercise now embrace cost accounting and experience tracking in order to
better staff and price future services. Even so, data often still take a backseat in the strategic
planning decision framework.
In a recent strategic planning effort for a mid-sized U.S. law firm, there was strong
resistance to including any voices other than management committee members and top
rainmakers. The partners felt that sharing any financial data, revealing any organizational “dirty
laundry,” or even exposing strategic deliberations to anyone outside this group would likely
generate disastrous consequences. These partners had yet to learn what corporate strategists have
long known: Insulating those who devise strategy will create an echo chamber. Strong opinions
will override sound analysis; political considerations will gain undue influence; confirmation
bias will lead to analysis that supports the status quo and minimizes negative input; and, not
surprisingly, few decisions will be made that negatively impact the leaders devising the strategy
in any material way.
In a law firm this challenge is particularly acute: Partners are also owners, and they feel
they have a right to assert their voice in business strategy, so a common result is that partner
preference prevails over sound business judgment. The largest waste of time in a law firm
strategic planning process is to allow partners to endlessly debate esoteric concepts when neither
side has supporting data, and no matter what’s decided the partners have veto power if they don’t
like it. The single greatest approach to overcoming uninformed partner input is to have relevant
data on hand that supports a conclusion.
To be clear, partners may make decisions that are not in their economic self-interest, and
many do, but these can and should be conscious decisions. For example, many law firms
36
