Leveraging Charismatic Leadership to Facilitate Change in Big Law

It's no secret that Big Law, not to mention the entire legal industry, has experienced unprecedented and profound change since 2008. And it's expected to continue. According to Altman Weil's 2015 Law Firms in Transition Survey, 72% of law firm leaders believe the current pace of change will only increase. Yet despite appearing to accept that rapid and ongoing market change is here to stay, firms, and their leaders, have responded with change efforts that can largely be described as limited and reactive short-term solutions. Why? The answer is simple, implementing significant organizational change isn't easy. There is inevitably resistance from powerful stakeholders, namely partners, who see no reason to modify operations currently meeting their personal needs.

That said, to keep pace with clients' relentless demand for greater efficiency and predictability in the delivery of legal services, law firm leaders must be capable of facilitating deeper strategic initiatives that drive vital firm-wide change. By embracing the practices of charismatic leadership, law firm leaders can guide their firms toward the adoption of methods that enable the firm not to just survive, but thrive in the increasingly competitive and highly dynamic legal industry.

The Types of Change Facing Law Firms

To fully appreciate the effects of charismatic leadership, it's important to first understand the types of change that law firms are currently facing in the market. While organizations go through change all the time, the nature, scope, and intensity of the changes vary considerably. Like other industries, the 2008 economic downturn eventually impacted the legal market. In the year or so that followed, law firm leaders quickly went on the defensive to preserve their firms by partially redefining firm frameworks, including strategy, structure, people (both attorneys and staff), and processes. During this time period, leaders made changes to their firms in direct response to immediate demands imposed by the external environment. Change of this nature is referred to as re-creation. Re-creation is a risky endeavor for firms (and all organizations), because change is initiated under crisis conditions and occurs within a relatively short timeframe. Re-creation situations pose the greatest threat to the life of a firm.

Since 2010, as the economy has slowly stabilized, firms that survived re-creation gradually implemented, albeit grudgingly, new operational practices to cope with evolving client demands. Some of the most common include alternative fee arrangements, enhanced matter budgeting, and the utilization of legal project management techniques. These changes represent small tweaks to individual components within the larger firm system. This type of incremental change which is initiated reactively is called adaptation . Although reactive, adaptive change is a relatively safe form of change because its primary aim is only to enhance effectiveness, leaving alone the fundamental operational principles inherent to a firm.

In 2016, firms have a decision to make about how their future will play out. While adaptive change has kept many firms afloat since 2010, increasing client demands may soon prove too great for this slow and reactive approach. What happens then? As many firms have found some stability in the current marketplace, now is the optimal time to think strategically and act purposefully.

Conditions are ripe for law firms to take a proactive approach to change. As clients have not yet forced their hand on the billable hour, firms have an opportunity to overhaul their operational practices with strategic incremental change. Unlike risky re-creation, re-orientation involves change initiated in anticipation of future events. Time is the one variable that makes re-orientations significantly more likely to produce favorable outcomes than re-creations. Re-orientations provide leaders with the precious time necessary to shape the change, build coalitions, and redefine core values in service of the revised strategy, structure, and processes. Firms who act now will find themselves prepared to meet the client demands of tomorrow. Those who remain married to adaptation will find their fate balancing on the outcome of another hasty re-creation.

Charismatic Leadership

To successfully achieve re-orientation, firms will need the guidance and support of a charismatic leader. But what is charismatic leadership? Rooted in the work of organizational theorists David Nadler and Michael Tushman, charismatic leadership describes specific behavioral characteristics that a leader can, and must demonstrate to successfully bring about change in another individual's values, goals, needs, and aspirations. To operate as a charismatic leader, firm leaders must continually exhibit actions representative of three major types of behavioral characteristics: Envisioning, Energizing, and Enabling.

Envisioning

The first of the three components, envisioning requires the leader to create and openly articulate a clear and compelling vision of the future. Doing so establishes a common goal that serves as a springboard to generate excitement and commitment among firm members. The vision needs to be challenging, meaningful, and worthy of pursuit (people must believe the vision is attainable). Firm leaders must also define, and personally adhere, to a set of clear expectations. If the leader fails to publically demonstrate the behaviors and activities that symbolize the vision, the re-orientation will fail.

Energizing

The second component is energizing. Under the philosophy of charismatic leadership, the leader is the direct source of energy motivating firm members to act. Though all leaders will need to tailor their energizing activities to align with their firm's culture, some of the most common practices include: frequent demonstrations of their own personal excitement and energy, direct personal contact with large numbers of people at all levels of the firm, and the expression of confidence in the firm's ability to succeed. Last, but potentially the most important, leaders must find and use successes to celebrate progress toward the re-orientation.

Enabling

The third and final component is enabling. Here, firm leaders psychologically help their people perform in the face of challenging goals. Although achieved in a variety of ways, one of the most effective is for leaders to demonstrate empathy and support for individuals. Above all, firm leaders must also continually express confidence in members' ability to perform and meet challenges produced by the re-orientation.

Charismatic Leadership and Big Law

So why is charismatic leadership important for Big Law?

First, firm-wide change isn't easy, and in Big Law, size compounds the complexity of transformation. Unlike the “good ol' days,” most big law firms now have a global presence. Bringing about change in the values, goals, needs and aspirations of others is hard enough. So to unify thousands of attorneys and staff toward a common objective, when vast geographic distribution and cultural diversity are at play, it is paramount that a leader display behavior universally supportive of transformative thinking.

Second, and perhaps more interestingly, when firm leaders have minimal authority to directly modify core operating principals, charismatic behavior can be leveraged to drive change. If armed with a compelling vision, leaders exuding energy and empathetic support can thwart inaction stemming from the highly participatory decision-making style of traditional partnership. Charismatic behavior also naturally diffuses resistance and garners support from key influential stakeholders, in this case partners. Ultimately, firm leaders who choose to adopt the philosophies of charismatic leadership will be better positioned to unify and mobilize partners toward an improved future state.

As suggested earlier, now is the optimal time for firms, and their leaders, to think strategically and act purposefully. Change is here to stay. To remain relevant in the evolving legal landscape, leaders must have the courage to promote innovation, explore new strategies, and pursue their vision of the future ' and they must do it all with charisma.

Whit Wesenberg is the Senior Professional Development Specialist for international law firm Winston & Strawn LLP.