Tilt Into 2016: Gaining a Competitive Advantage
Competition is fierce.
As cost pressures from clients intensify, as new service providers emerge, and as new technologies are deployed, it is unwise for any firm to avoid thinking about how it should work differently. (Richard Susskind, Tomorrow’s Lawyers)
In The Globe and Mail article “McCarthy Tetrault’s Tracie Cook leading firm’s radical transformation”, Jeff Gray discusses McCarthy Tetrault’s attempt to modernize. The firm has instituted:
- new billing practices;
- open-concept floor plans;
- reduction in 200 support staff; and
- has established a client service innovation team.
“The moves have come as the sector grapples with new competition from global players and changing demands from clients, who want more efficient services and more predictable bills.”
Although the containment of costs is important, law firms must move beyond superficial reforms to establish a deeper competitive advantage in 2016 and beyond. In Tilt: Shifting Your Strategy from Products to Customers, Niraj Dawar argues that to gain a competitive advantage we must address the costs and risks associated with buying our product (legal services).
You get answers by asking what costs and risks you can reduce for your customers in their search for, purchase of, usage of, and disposal of the kind of value you produce, not how you can generate more economies of scale.
Dawar states that to uncover the hidden costs and risks, we must ask:
- What are the hidden costs that your customers incur in buying and using your product or service?
- What are the hidden risks that your customers incur in doing business with you?
- Why do potential customers not buy from you (what are the costs and risks that prevent potential customers from doing business with you)?
When companies solve the reason that customers do not buy from them, they are able to maintain their margins. Dawar provides the example of Hyundai. Hyundai noticed that people were worried about losing their jobs so they refrained from purchasing new vehicles. In response, Hyundai offered a no-penalty return policy. This policy removed the disincentive for purchasing cars. As a result, more people bought Hyundais, and the company realized increased profits.
Similarly, by uncovering the hidden costs and pain points in the interactions between law firms and their clients, law firms can refine the way they deliver legal services and gain a more meaningful and lasting competitive advantage in 2016 and beyond.
Two things in the Globe and Mail article have me baffled they are: first, “[t]he rest of the space is open concept. Lawyers move around and work in groups, carrying laptops and staying connected with headsets.” For some reason this scenario doesn’t strike me as being conducive to collaboration. Would it not be more collegial and collaborative to lose the laptops and headsets and simply give your colleagues your full attention thereby also imparting respect for each other?
Second, “…Ms. Crook said: ‘We tried to hear everything that they wanted. They wanted more of a Starbucks atmosphere so they could take their computers and work there.’” Usually this atmosphere consists of a long line-up of jittery individuals anxiously awaiting their hot beverage to dash out the door. Or single individuals occupying tables with their attention either focused on their laptop screens or those of their smart device. Perhaps, the regular customers may exchange brief nods or greeting with other but otherwise I’ve yet to see groups of people working face to face in collaboration with each other in the new old-fashioned way. Maybe I’ve looked in all the wrong places.
You neglect to mention that the article also notes that “hundreds of support staff” were let go. This is a good news story? Published at this time of year? Ebenezer Scrooge couldn’t have done better.
Verna Milner, it would be interesting to see if and how open concept improves lawyers’ work. If the shift to open concept floor plans is accompanied by a change in the way work is done (with the objective to make working more fun and enjoyable) it could benefit lawyers. However, if it distracts lawyers and makes them feel overwhelmed, then offices that are not open concept will have an advantage in recruitment.
I predict that the shift to open concept offices is here to stay as firms try to cut down on spending.
Ms. Douglas, your above prediction on the subject of open concept offices may very well be true. Hopefully, however, law firm leaders will realize eventually that redecorating offices and cutting costs are ephemeral in a situation where remodelling the entire organizational structure is what may really be needed to succeed in a remodelled and refashioned market.
Re: Verna Milner’s comment about laptops and the lack of collegiality, I’ve seen collaborative work spaces sit empty aside from a few partners who still do all of their work on paper because there had not been an accompanying move to mobile technologies. You can give your colleagues your attention while still having access to the electronic documents that you are working on together and still being available for phone calls. Firm support for laptops and more functional tablets needs to go hand-in-hand with any push for collaborative workspaces.
I’ve also seen tons of people talking with others in coffee shops. It is actually extremely rare for me to go into a coffeeshop and see literally no one talking to anyone else. In the downtown core, I actually overhear people talking about business matters in coffee shops on a regular basis, which is concerning for confidentiality reasons. Creating comfortable spaces within the office where people can sit down together and discuss a legal or business issue in a relaxed way seems like a great idea for keeping those kinds of discussions protected.
Sarah thanks for your comment to my comment. In my opinion, everyone should enjoy a relaxed, pleasant work environment it’s good for the worker and the employer, it increases productivity. However, with regard to your statement: “You can give your colleagues your attention while still having access to the electronic documents that you are working on together and still being available for phone calls.” I’ll leave the following quote for consideration…
“In a 2005 study, the psychologists Alena Maher and Courtney von Hippel found that the better you are at screening out distractions, the more effectively you work in an open office. Unfortunately, it seems that the more frantically you multitask, the worse you become at blocking out distractions. Moreover, according to the Stanford University cognitive neuroscientist Anthony Wagner, heavy multitaskers are not only “more susceptible to interference from irrelevant environmental stimuli” but also worse at switching between unrelated tasks. In other words, if habitual multitaskers are interrupted by a colleague, it takes them longer to settle back into what they were doing. Regardless of age, when we’re exposed to too many inputs at once—a computer screen, music, a colleague’s conversation, the ping of an instant message—our senses become overloaded, and it requires more work to achieve a given result.
Though multitasking millennials seem to be more open to distraction as a workplace norm, the wholehearted embrace of open offices may be ingraining a cycle of underperformance in their generation: they enjoy, build, and proselytize for open offices, but may also suffer the most from them in the long run.” (Maria Konikova, “The Open-Office Trap” in The New Yorker, January 7, 2014)