February 25, 2020

change management sustainability change

Identifying an Organization’s Appetite for Change

In order to keep a fresh and open mind, I regularly read about what’s happening in other domains and sectors outside the legal bubble. One of my interests besides legal operations and legal tech is Strategic Sustainability.

I recently completed a course on Strategic Sustainability and found that the same methodology used to identify appetite for change (and determine those actions required to affect change to become more sustainable) can be readily applied to driving change in the legal world.

In this two-part article I will outline the simple tenets behind the “sustainable change” methodology, review the impact of failing to properly carry out analysis, and finally consider why, despite a new seemingly endless (and still growing) universe of legal tech vendors, finding concrete examples of meaningful legal innovation are relatively rare.

The sustainability assessment outlines a number of approaches that can be taken by businesses with regards to sustainability, depending on a number of factors.

Just like all companies do not (and should not) decide to go “fully carbon neutral by the end of 2020,” all law departments should not decide to go “fully tech-driven by the end of 2020.” It seems however, that for a number of legal operations or legal technology leaders, a tech-heavy future is the only option.

There are five positions pertaining to sustainability that are a useful canvas to assess the openness of the legal team regarding change. Determining a company’s position with regards to sustainability, and a law department’s position regarding change is critical and can be assessed by asking the following questions:

• Who cares? Does the legal team actually want change? Is the team asking for change? Does the business (your internal customers) want change? Do your external customers want change? If nobody cares about change, then perhaps thinking about and trying to implement change may not be the best use of your time.
• How much should we change? Assuming people want change, how much do we really need to change? Is there an appetite and need to transform or should we just evolve?

With these two very simple questions as a starting point, we can determine a position for each legal team:

1. Below the Line. In the context of sustainability, this means not being compliant with applicable laws and regulations. In our case, for a law department, this would mean deciding to completely ignore new working models or technology altogether. Not recommended.

2. Baseline. In a sustainability context, the organization is compliant and operates within the legal framework, doing the bare minimum required, and usually adopting a reactionary approach to regulatory changes. In our case, this could mean, for example, effective utilization of the base Microsoft (or Google) suite of tools. This is actually an acceptable position if it satisfies the needs of the law department, its stakeholders and internal customers.

3. Wait & See. This position refers to companies who comply with applicable laws and regulations (Baseline) but take a proactive approach to potential new regulations which may affect their business. This is similar to Baseline but with a proactive approach (horizon scanning and scenario planning). A parallel in our sector would be law departments that believe that change is apace and are investing time and energy in exploring options (the “see” in wait and see) though have not yet made concrete decisions or movements to enact change (the “wait” portion).

4. Show & Tell. The company is making significant changes, designing new processes, applying new work methodology, deploying new technology, and sharing these advances with the rest of the world. In a sustainability context, this is typically done through the publication of sustainability reports or scorecards (for example). In the legal space, this typically happens during industry and vendor conferences and round-tables. But is this happening enough? I would like to see more law departments “watching”, or participating in these events. However too many law departments are buried in the day-to-day and do not, take (or make) the time to learn from their peers.

5. Think Ahead. This position is the most advanced and implies that a company is taking a leap of faith. This position can only be achieved when all stakeholders (board, General Counsel, legal team, internal customers, external customers) are fully supportive of considerable change. One example in the sustainability domain is Virgin Atlantic, who is completely upgrading its fleet of airplanes in order to be aligned with its lofty sustainability goals. Similarly, Microsoft announced in January 2020 that it will not only become carbon neutral but that it will reverse its carbon footprint since its founding some 40 years ago. This requires a longer-term view, considerable investment, and in some cases, a bet on the future. I look forward to presenting an example in the future of a law department that has faced this level of (perceived or real) urgency and has decided to dramatically transform.

Once the overall position of the law department has been identified, and provided that position is one where there is support for change, the next step is to carry out further analysis, diving deeper into the details.

Analysis models at this stage include creating a legal Target Operating Model identifying pain points & issues, carrying out a “work analysis” exercise (are we doing the right things?), measuring cost/benefit and ROI of proposed change, and conducting risks and opportunities analysis. Finally, once the Target Operating Model has been agreed upon by all stakeholders (and only then), we can go into the details: what, how, and when; identify specific requirements, and start solutioning.

In Part Two, we will look at managing situations where change in the law department has been initiated in a manner that is at odds with the genuine ability of the law department to change: unsustainable change.