Just add focus and energy – the recipe for becoming a better manager

Turning disengaged and distracted risk managers into purposeful practitioners should be a priority for all law firms, writes Ronwyn North.

Effective managers have two important characteristics – focus and energy. They do less in a more committed, purposeful and reflective manner in order to achieve more with their time. Does this sound like the practitioners and practice managers of your law practice who have responsibilities for managing risk? If not, read on.

In considering how purposefully or otherwise you manage risk, answer this question: What is the main risk facing your practice? The top three risks? Top five? Top 10? How many priorities is too many? Do you have a risk management plan for the coming year? Being realistic, how likely is it that by this time next year you will have achieved everything on your ‘risk mitigation list’, or is it more likely that resistance or distractions will see some initiatives remain incomplete?

The weakest link
Law practices of all shapes and sizes are much better managed today than in the past. Today, it is much easier to have meaningful conversations about strategic planning, client relationship management, business development, financial management, IT systems, HR practices and leadership. So take a bow, all those practitioners and practice managers, leaders, thinkers, planners and doers who have professionalised law practice management.

However, in many law practices, risk management is the self-assessed weakest link in the managerial chain. In many of these firms, the risk profile and priorities are not well articulated, risk management is little more than adequate insurance, and there is limited informed or spirited debate about emerging risks and alternative or innovative mitigation strategies. In other law practices, the formal risk frameworks, heat maps and risk registers have degraded into form over substance or resulted in overwhelming risk fatigue.

In today’s rapidly changing environment for legal services, managing risk effectively is more important than ever, both in the positive sense of taking calculated risks and not missing opportunities, and the negative sense of taking precautions against potentially harmful events. Clients can be fickle. Competition can be fierce. Practice areas can disappear. Workflow and cash flow can be hard to predict. People can be the biggest assets and also the biggest risks. Technology can be a blessing or a curse. Mother Nature is always a force with which to be reckoned.

Stop spinning your wheels
So what is the solution for achieving more effective risk management? Part of the solution lies in how those with responsibility for managing risk spend their time. As management guru David Maister says: “What you do with your billable time determines your present income. What you do with your non-billable time determines your future.” One of the leading studies about how effective managers spend their time is Harvard’s Beware the Busy Manager, which identifies four kinds of managerial behaviour along with some of the personal and organisational factors that contribute to the behaviours. The study found that an astonishing proportion of managers – about 90 per cent – were spinning their wheels or engaging in ‘active non-action’ that fails to move projects forward. A mere 10 per cent of managers were able to achieve their goals. These were the managers with the dual characteristics of focus and energy.

According to the study, focus is concentrated attention, the ability to zero in on a goal and see the task through to completion. Managers who are focused commit to a manageable number of projects they believe in and do not allow themselves to be side-tracked. Energy is effort fuelled by intense personal commitment and persistence, notwithstanding tight deadlines and heavy workloads. The Focus/Energy Matrix describing the four kinds of managerial behaviours is set out below.

(Source: Beware the Busy Manager)
Heike Bruch and Sumantra Ghoshal, Harvard Business Review, February 2002

In a managerial lifetime, all four quadrants may be experienced, but the point is to think about where you, or your managers, are now in relation to managerial behaviour around risk initiatives and what personal and organisational factors are in play. Here are some thoughts about how the Focus/Energy matrix might apply to risk managers in law practices.

Procrastinator: Inaction and lack of initiative in progressing risk projects can be the result of insecurity or fear of failure. People like to feel competent, yet in many law practices there is little formal training in managing risk. So people, especially legal practitioners, have difficulty ‘letting go’ and becoming comfortable learning to manage risk by trial and error. Passivity and ‘learned helplessness’ can also arise if the law practice consistently ignores, rejects or disrespects the risk manager’s ideas or efforts. To boost confidence, risk managers might tap into the information and resources available for managing law practice risks. For example, the websites of professional indemnity insurers and government websites relating to small business. Law practice leaders should be encouraging, open-minded and appreciative towards their risk managers.

Disengaged: According to the Harvard study, some disengaged managers are simply exhausted and lack the inner resources to re-energise themselves. Others feel unable to commit to tasks that hold little meaning for them. Disengaged managers have strong reservations about the jobs they are asked to do and, as a result, they approach them half-heartedly. Risk managers who do not believe the risks are real or who do not agree with the strategies and safeguards they are expected to implement may be resentful, angry or stressed by their risk management roles. Law practices should not assume that partners or managers who arrange insurance and manage claims on behalf of the firm are equally as ready, willing and able to spot emerging risks, design preventative strategies or influence behavioural or cultural change. Disengagement may be more likely if law practices see managing risk as a low-status activity and do not provide adequate recognition and reward. Emphasising the many benefits of risk management, choosing the right people for risk management as distinct from ‘damage control’ roles and valuing the contribution of risk partners or solicitors by providing relief from billing targets will go a long way towards counteracting the risk of disengaged risk managers.

Distracted: The Harvard study describes distracted managers as “those well-intentioned, highly energetic but unfocused people who confuse frantic motion with constructive action”. They are easily over-committed and, by taking on too much and spreading their attention too thinly, they end up doing nothing well. Too busy to engage in meaningful reflection, the distracted manager can choose short-sighted, kneejerk solutions that are ineffective. Once a law practice switches on to managing risk, it is easy to see risks everywhere and to want to do something about them all, all at once. Relatively few law practices have dedicated risk manager roles, so juggling competing managerial demands is even more distracting. Law practices and risk managers need to identify the key risks, have realistic expectations of what can be accomplished with resources available and pace themselves.

Purposeful: These managers put in more effort and achieve more goals more often than their counterparts. They pick their goals and their battles. Their time is valued and well planned. They protect their focus by controlling distractions rather than letting distractions control them. They are effective at managing the expectations of others and getting the resources they need to do the job. They protect their energy. They value thinking time. They have constructive strategies to de-stress and recharge themselves. Effective risk managers have a rolling agenda of a few risk priorities and projects that will make a meaningful difference to the risk profile of the practice. As risk reduction initiatives are completed, new ones take their place. Purposeful risk managers are most effective in law practices that are themselves purposeful and which have clear risk objectives and performance criteria. Can you and your law practice adopt more of these behaviours and management practices?

This has been a very quick sketch of some of the dynamics of creating an effective risk management function. With the end of the financial year fast approaching, many law practices are reviewing, prioritising, planning, budgeting and setting targets for the coming year. Make sure you include a review of your risk profile and the setting of a risk management agenda to ensure the right risks are on the managerial radar so they are mitigated or accepted appropriately.

Whether your most pressing risks are strategic, financial, logistical, client service or productivity related, remember that you cannot address every risk at once. Avoid the traps of procrastination, disengagement and distraction and reap the rewards of a more highly focused, high-energy, purposeful approach. Safe practice!

Ronwyn North is the managing director of Streeton Consulting and a qualified lawyer who specialises in consulting to the legal profession on practice management issues, including risk management. She can be contacted at rjnorth@streetonconsulting.com.au.