Good governance a matter of innovation, agility and ability to inspire buy-in

By Jean-François Gagnon

This article was originally published by The Lawyer’s Daily, part of LexisNexis Canada Inc.

It is generally considered that governance involves the relations between a corporation’s management, board of directors and its stakeholders. Good governance is essentially — if not exclusively — aimed at ensuring the long-term sustainability of the enterprise. That is its core purpose.

Transposed into the legal setting, good governance must necessarily take into account market conditions. There are many examples in the legal world of firms that at one point were dominant and prosperous and later imploded and disappeared. The causes of their demise can be identified and are essentially the following:

  • Feeling of invincibility. The conviction of being invincible is the polar opposite of doubt. It prevents any questioning or reassessment of the firm’s business model and organizational processes. It leads senior management to believe that nothing threatens the firm’s continued success and consequently that nothing needs to be changed.
  • Obliviousness to market trends. The legal services market is in a constant state of flux. True industry leaders must have the ability to take stock of and understand the business environment they operate in. Market tendencies must be understood and — to the extent possible — anticipated.
  • Lack of vision. Vision is the prime attribute of leadership. Managers must have in-depth knowledge of their firm and be able to extrapolate that knowledge to their future planning. A clear vision of the stakes, issues and challenges at play and of the consequent strategic positioning of the firm should be the prime mover of the firm’s decision-making.
  • No differentiation. Differentiation is crucially important in a market where several players offer essentially the same product. If a firm doesn’t set itself apart, its position becomes precarious.
  • Lack of managerial courage. Managerial courage is essential for a firm’s continued success. Management must not only be able to understand the challenges facing the firm but have the courage and fortitude to react accordingly. Lack of managerial courage will eventually paralyze the firm.
  • Lack of global leadership. Leadership must not only be shown by the governance team. It is an across-the-board role that must be assumed, shared and exercised by all members of the firm.

Fortunately there are also many examples of success in this regard. The market rewards those who innovate, adapt and reinvent themselves. It is generous towards firms who know how to understand it and are able to anticipate its shifts. But it generally eliminates all others. Although successful governance is a collective responsibility, it is fundamentally dependent on the individual members of the team. If one had to summarize the essential qualities team members must possess, they would boil down to the following:

  • Being able to inspire and get buy-in;
  • Being able to systematically and intuitively assess individuals, their team and the market;
  • Being open to innovation;
  • Being competent, forthright and instinctively agile.

 

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This article was originally published by The Lawyer’s Daily -- providing Canadian legal news, analysis and current awareness for lawyers and legal professionals who need a real-time view on the shifting legal landscape.