Never let a good crisis go to waste

The past few months have posed the toughest leadership test of our generation. We’ve watched a human tragedy unfold and been forced into crisis management as the doors closed on the economy. 

Looking back over recent months, what is the most important thing you have learned from leading your firm through a pandemic? For me, it has been seeing the positive and transformative outcomes that result when business leaders are agile, flexible and human. 

Firefighting was the order of the day throughout the economy when lockdown became inevitable; and firms found themselves acting instinctively to manage the fast-moving situation. Though there have inevitably been economic casualties, in embracing this change we’ve seen many firms leap forward, often fulfilling their strategic intentions in double-quick time despite being in crisis management mode. 

Innovative responses

Responding to an emergency seemed to cause a flow of creativity and innovation and, like winning in sport, that can become a habit. Responsiveness to changing circumstances marks out those who will succeed – and that calls for flexibility and vision from leaders.  

At LawNet, we have been facilitating conversations at senior level in mid-size firms with a weekly online discussion forum for our 70-strong member network. Up to 20 members have joined each live video conversation, building a ‘captain’s log’ of law firm leadership and management through the crisis. 

Many of the key issues that emerged from the first session in early April were, inevitably, operational, such as how to manage staffing and cash flow or productivity challenges. 

But even at that early stage, firms were reporting that the crisis accelerated change programmes which might have been planned (or even overdue), but had been waiting or resisted for one reason or another. Agile working, paperless projects and video conferencing suddenly became ‘how’ instead of ‘not yet’.  

There was no sense of firms standing on the side-line wondering what to do. Rather, they were grasping the issues and dealing with them. This engendered a real sense of resourcefulness and curiosity, not just in the here and now but also for the efficiencies and opportunities it could bring firms in future, with higher productivity already being reported by some firms in those first weeks of lockdown. 

Damage limitation

But firms were concerned about the potential damage to their carefully built teams with many staff on furlough and fears of possible redundancies as the crisis developed. Where was the right balance between reducing hours or furloughing; and how might that balance change over the coming weeks? If people were furloughed so existing business was not fulfilled, would this damage client relationships and future work streams? 

And cashflow was clamouring for attention. As clients themselves started to experience cashflow issues, there was concern this might start to affect firms. Cash collection became paramount while recognising this could mean less to look forward to later in the year. Everywhere, we saw firms looking carefully at expenditure and reviewing their commitments. 

Recognising financial management as both an immediate and future priority, we invited Andrew Allen, the lead for legal sector services at chartered accountants PKF Francis Clark, to join our discussion sessions. A regular with our firms, he came on board with a session on cashflow and productivity and another on budget setting.  

Andrew unpicked concerns about recovery rates and how to access the sweetie jar of government grants, loan schemes and VAT deferrals. He encouraged firms to get their financial management in order with pandemic-reflective integrated projections for profit and loss, balance sheet and cashflow. He urged firms to secure loan finance even if it meant keeping the money aside until absolutely needed – and to be cautious not to use borrowed money to finance ongoing losses. 

The chancellor’s package of financial support could not be consumed without compunction. The validity of furloughing claims would be checked out by HMRC in future; loans would have to be repaid; and balance sheets (and indeed future viability) could be marred long term by excess borrowing. 

Importantly, our firm leaders were encouraged to ensure their forecasts were revisited regularly and adjusted where necessary. 

Masterclass for change

By late May, all eyes were on how best to prepare for an uncertain future in the ‘new normal’. Office space became a burning issue. While clients had adjusted well to conducting matters remotely, some were looking for meetings to take place once again. Discussions turned to how to manage a return to the office; and bigger issues around the future of work and the part technology might play. 

We invited another regular on our network circuit. Law firm strategist Andrew Hedley came with a somewhat iconoclastic perspective, rooted in Winston Churchill’s quote: “Never let a good crisis go to waste”.

This echoed our own approach throughout this challenging time, orienting discussions towards how to use the pandemic as a masterclass for change.  
He emphasised the positive outcomes so far and urged firms to build on the responsive, flexible approach they had proved themselves capable of; and for leaders to adopt a ‘challenge and support’ philosophy rather than ‘command and control’. 

The overwhelming sentiment from firm leaders was that they didn’t want to lose the new behaviours, attitudes and practices that were working so well. The challenge was how to avoid a return to old ways of working once people began to return to the office (themselves included). 

These sessions highlighted three defining considerations for firms looking to achieve and maintain the agility that will be demanded in the ‘new normal’.  

Transformation – Strong leadership lies at the heart of sustainable change and an embedded culture of agility, but it’s important to distinguish management from leadership. Planning, budgeting, measuring and organising are essential, but that’s management. Leadership is strategic and focused on direction: motivating and aligning teams, looking for opportunities and challenging the prevailing normal. Managers want to do things right; leaders want to do the right thing.

Even the most informed commentators can only guess what will happen next, so it’s vital to keep things fluid. But it’s hard to do that if you’re focused on getting back to the old way. The challenge is how to offer a different sort of client experience and employee experience. Andrew Hedley’s session encouraged us to think of approaching the situation as ‘business as unusual’ to continually push ourselves into new ways of thinking. 

If productivity was good and things were working well, then part of an agile future may involve less in the way of traditional office buildings and daily attendance by staff. 

When clients are keen to meet, we need to look for safe ways to do that. Equally, we need to listen to clients who value the distanced, electronic way of working so that virtual consultation remains a first option. 

Outsourcing activities such as post-completion work and other purely administrative tasks can bring real benefits. Firms who had gone down this route reported that it was one of the most resilient aspects of their business during lockdown.  

Similarly, centralising areas such as dictation, file opening or archiving can bring significant benefits. One firm reported that streamlining through centralised dictation required 30 per cent fewer secretarial hours. 

Most importantly, leaders need to keep a clear eye on what’s coming, echoing Andrew Allen’s takeaways for strong financial information, clear forecasting and scenario modelling, with progress continually monitored.

Communication – A clear voice sets the tone of any business, even more so in a crisis. Fiction and rumour thrive at times of uncertainty, especially if communication is poor. Maintaining and building touch points with staff and clients is essential; partners and department heads need to ensure they’re speaking to everyone more regularly than usual. 

Managing culture and being ‘one firm’ with staff isolated at home has been a challenge for many firms. Divisions may have arisen depending on whether or not people are furloughed. Workers may be doing too many hours in difficult circumstances, anxious about losing their job, feeling irritated to see others at home being ‘paid to do nothing’. Those at home may feel dispensable, anxious at having nothing to do and feeling equally challenged. Mental health and wellbeing are paramount and it’s essential to communicate to all staff that leaders recognise the situation and value them as individuals. 

Managing how staff may return to the office demands deft diplomacy skills. Getting people to adhere to new systems and minimise movement, with one-way routes and allocated printers, is challenging enough; but for those who had been part of a skeleton staff in the office throughout, returners can seem like interlopers who don’t understand the new socially distanced way of working.  

Creative ideas to bring the firm together can be vital, for example, some of our member firms tried a rolling programme of furlough across different staff members, so that the burden is shared. Another firm is building a bonus pot to reward all team members, with special consideration for those who have gone above and beyond during this time. The idea has been well received, but they were careful to canvass options with staff to be sure it was going to have the intended outcome – motivated, committed teams are not grown in the dark. 

With clients, exceptional communication is always vital. The best way to keep their business is to focus on how the pandemic may have shaped their future needs and asking how you can best deliver against that. 
Intention – What’s your purpose as an organisation?  It’s a vital question to consider if you’re going to move beyond the profit imperative. 

We live in a time of globalisation, but this pandemic has emphasised the value of thinking locally; and there are opportunities for firms who can demonstrate they are embedded in their community. Creating genuine relationships with clients and demonstrating how you care about your staff, being more ‘human’ and empathetic, are increasingly valued.   

A key component of effective leadership is building trust with all your stakeholders, but words and deeds must be underpinned by integrity – false statements are quickly unpicked in practice. Reputation increasingly counts: ReviewSolicitors.co.uk, used by our firms for client reviews, saw an 85 per cent increase in traffic in the first weeks of lockdown. 

Taking time to understand individual staff in a holistic way can help redefine purpose. Recognising how their work and home lives are interrelated and how you might help them be more fulfilled in both spheres can have a meaning well beyond the purely operational level. 

The traditional office environment provides a social purpose in bringing people together in one place. That’s obviously been missing in recent months and some may value being first back to the office if they’re feeling isolated working alone. Others may value a flexible daily homeworking routine or being in the office only for certain days of the week. Leaders must create within their firms a social purpose as well as a business purpose and an enhanced employee value proposition – while fulfilling the objective of keeping the business agile and profitable. 

I have been impressed by the many and remarkable ways in which our member firms have shaped up in this crisis. One of the most important takeaways has been the recognition that new ideas need not be perfect before implementation. Taking a more flexible approach to change and being prepared to allow things to develop and improve after an initial launch is what’s needed in the new normal. Firms should be prepared to accept failure as the price of future success: to fail fast, improve and try again. 

Leadership can be a lonely role and collaboration has been valuable for our members. Having access to the support infrastructure and experts that come with the network gives them confidence to make the right decisions. Our network is a bit like a family, and we know in our personal lives that dealing with difficulties is easier when family is around to help and support.   
My own team has been tested by the pandemic. We’ve had to rise to the challenge of supporting our members in new ways. We were scanning the horizon while they were busy adapting to an emerging crisis, listening to their views on how we could help; and making that our priority. It’s amazing how quickly these weekly virtual leadership sessions became part of network life; and how rapidly we were able to switch our entire learning programme online and reshape our customer experience testing to include the changes in client communication and delivery developed during lockdown. 

We all have something to learn from this tragedy. This break to normal life has given us an opportunity to make changes that can improve our operating model long term. Rather than pressing pause in March many in our sector hit the fast forward button. Let’s not lose that impetus when change can be so hard to embrace.

Chris Marston is chief executive at LawNet lawnet.co.uk