Collaborating for success
By Nicola Laver
How can law firms learn lessons on collaboration from the construction industry? Sally Calverley and Martin Griffiths explore the benefits of collaborative relationships and how firms can approach them
Collaboration could be the next big move for law firms that want to strengthen their offering to clients and increase resilience.
And let's face it, who doesn't want to do that?
If you have tried mergers, invested in new information and technology (IT) and digital solutions, restructured and rebranded – and you’re still not reaping the benefits – the time has come to look at how to use your biggest asset: your people and their ability to be human.
Collaboration offers the opportunity to harness the collective brain-power and emotional intelligence not just of your entire workforce but also that of your suppliers' workforce (and even your clients’) – and use it for the benefit of your business.
All you have to do is get them to work together.
We have learned, through our work in the construction sector, it is (at best) challenging to develop and embed collaborative behaviours.
For example, keeping a client up-to-date on progress is a basic collaborative behaviour. However, one in five of the referrals to the Legal Ombudsman relates to the failure to do this.
Like the legal industry, the construction industry depends on effective people and risk management.
The construction sector is short of 300,000 professionals but an inability to recruit is a key restriction on growth.
The good news is that collaboration is a positive draw for professionals with the right attitude. What’s more, it also leads to greater productivity efficiencies that can reduce the need for recruitment.
For instance, law firms that collaborate effectively with clients across the organisational boundary can streamline tasks across both sides of the divide, not just the part managed by private practice.
This means that expensive, talented, human resource is freed up for more value-adding work.
Collaboration has been determinedly sponsored by public bodies such as Highways England and Network Rail in search of lower costs and maximum value.
Alongside smart procurement and lean principles, they demand that collaborative behaviours are embedded because the potential savings from that alone are between 10 per cent and 13 per cent (more than can be achieved through lean alone).
What's more, innovation accelerates at a faster rate than might otherwise have been the case, which creates a virtuous spiral of benefits for the collaboration.
Nevertheless, for those firms willing to take on the challenge to develop collaborative behaviours, the benefits will outweigh the disadvantages.
The benefits – better productivity and improved profit margins as well as the potential to uncover innovative, beneficial ways of working – could give your business the edge over competitors.
In a market under increasing pressure, anything that provides firms with a competitive edge is worth consideration.
The legal market has responded to increasing competitiveness with structural diversity; opening boutique and niche firms and challenger firms (similar to challenger banks) that benefit from lighter touch regulation and newer, more agile IT to offer innovative models to clients.
This will only accelerate after November 2019 when the Solicitors Regulation Authority’s new regulatory regime will allow for freelancing and for non-reserved services to be delivered from within non-regulated bodies.
Existing firms are also responding. After a flurry of mergers to bring down costs we have seen a move towards firms looking to create competitive advantage through mutually beneficial relationships. After all, mergers can fail for reasons completely unrelated to the original rationale for working together: unbalanced equity shares or mismatched IT systems, for example. If the synergy between the two firms survives the hurdles, a collaborative approach – perhaps a contractual joint venture – can still reap the intended rewards.
While collaboration is hard, it is certainly not unknown in the legal sphere. The spectrum of existing collaborative approaches in the legal industry covers a number of categories:
Shared interest groups: eg the Association of Personal Lawyers (APIL) and Action against Medical Accidents (AvMA).
These are shared interest groups that promote the benefits of a particular subset of lawyers or client. Aligned by self-interest, they promote or campaign against changes in the law.
International law firm networks: Perhaps one of the oldest forms of a collaborative model, mid-tier law firms without foreign offices can extend their reach to provide a better service to international clients.
Legal Referral and Support Network: After the demise in 2016 of Connect2Law, several regional players such as Veale Wasbrough Vizards in Bristol and Hugh James in Cardiff retained the hub-and-spoke referral relationships they had developed with smaller firms.
Virtual law firms: eg Gunner Cooke and Carbon Law Partners. Virtual law firms offer a structure within which partners can offer mutual legal support, refer work and collaborate to win new business as well as provide a back office and procurement facility.
Michael Burne of Carbon says: “As a platform law company, we’re clear that creating the conditions for collaboration by lawyers sharing core services and building brands provides a compelling choice”.
Procurement networks: eg South Law and LawNet. LawNet, for example, describes itself as a community of successful law firms.
It’s a mutually-owned network where members benefit from collective purchasing, shared knowledge, best practice and expertise.
It encourages a collaborative approach so that, for example, on topics such as artificial intelligence (AI) members benefit from the experiences of their colleagues.
White labelling relationships: Some firms are forming relationships through which they share work across organisational boundaries, eg a regional law firm ‘white labelling’ commercial property work for a London-based American firm with a corporate practice.
Blurring the boundaries: More visionary firms have gone beyond mutual self-interest to try to form relationships that collaborate not just with other firms – but also with clients. asb law, for instance, has collaborated with law firms of all shapes and sizes including Magic Circle firms through to national firms and regional firms.
The savings can be significant. Andrew Clinton, managing partner at asb law, says the structural cost savings on one matter are around 30 per cent over an integrated solution from one firm.
However, collaboration is not easy and all parties involved have to be motivated and intent on collaborating – they have to have a business reason for doing so.
As Clinton says: “My experience is that firms embrace collaboration opportunistically (ie when they sniff a client-specific opportunity), rather than strategically because they have yet to accept that, in order to create substantial additional value for clients, they need to give away some value to other providers.
"You can test this by asking the partner from the other firm whether they would consider collaborating outside of the client specific opportunity and the response is often bemusement.”
It’s only a matter of time before collaboration in the legal sector catches up with collaboration in construction.
Law firms are generally reluctant to collaborate to achieve cost savings and their clients are not yet demanding collaboration. In construction, clients are motivated to do so by both potential cost savings and the dearth of professionals.
We predict that procurement will start to demand savings of 15 per cent to 20 per cent and that collaboration will provide an answer.
But why wait until you have to pass those savings on to a client?
All the above models involve sharing resources in a contractual relationship but, as these pioneers know, contracts are not enough.
In fact, it’s only possible to create a truly collaborative relationship by aligning behaviours and values across organisational boundaries.
That is LawNet’s experience - it has the benefit of long term, trusted relationships and a management team committed to collaboration.
So how can a law firm that wishes to benefit in the same way speed up the process? Collaboration is a recognised and well-worn process.
The initial challenge is self-knowledge. In other words, before embarking on a behavioural journey with a collaborative partner, both parties must understand their own behavioural qualities and capabilities.
We like to use psychometric tools to give a clear line of sight into preferred behavioural styles at an individual, team and business level; and to help everyone develop a common language about behavioural styles.
That is to say, ‘how’ we do things rather than ‘what’ we do.
Once that's established, both organisations need to apply SMART (specific, measurable, achievable, relevant, and time-based) targets for the collaboration, such as X per cent savings over five years or reduced employee churn.
ISO 44001, the international benchmark standard for collaborative relationships, also requires the parties to consider how they will leave the collaboration, and why.
This focuses effort on the required output early on, minimises scope creep and acknowledges that the collaboration needs to be actively managed.
People often prefer working in the collaboration and will find good reasons for it to continue to allow the collaboration to continue its original intention.
Once both sides have assessed the opportunity, reasons and exit strategy for the collaborative relationship, they can then work together to decide what their relationship is to encompass and how to measure it.
This often takes the form of a collaborative charter setting out exactly what each party expects. For example, ‘clear communication’ can mean unambiguous – but also a measurable reduction in email traffic.
Agreement has to be careful and detailed: not just the ‘what’ but the ‘how’ to include how they are to be measured and what targets are appropriate.
The objective is to bring the parties closer into behavioural and cultural alignment.
In a truly collaborative relationship, all parties work together in the best interests of that relationship, which can prove interesting when the ambition of the collaboration conflicts with the inertia of the native organisation!
Usually though, the benefits far outweigh any apparent difficulties. If there is a particular road bump, that’s when the forward planning and behavioural muscle memory developed through behavioural coaching come to the fore to make sure that the collaboration charter is observed.
A facilitated discussion usually results in stronger relationships and better understanding than before.
As lawyers continue their progression from data and document managers to relationship managers, firms that intentionally develop their collaborative capability will find themselves streets ahead of those that don't.
Firms will need to invest in developing emotional intelligence and specific behavioural and relationship skills. But as the Bellwether Report has recently confirmed, these human traits are going to be much in demand in the future.
Collaboration will provide a real opportunity for law firms looking for ways to differentiate themselves to do just that.
Sally Calverley is the founder, and Martin Griffiths a director of law firm business consultancy Richmonte Wells richmontewells.com