Optionality in law firms

We all like having options. It’s in our DNA. 

We like going to restaurants where there’s an array of freshly prepared dishes for us to choose from – all perfectly described on the menu before us. Tantalising descriptions of the delectable dishes that we could choose from. The waiters rattling off the specials of the day, making our mouths water with anticipation

Inevitably we sigh with exasperation “oh there’re so many choices, how will I ever choose” but we do. And then comes the inevitable “order envy” – you know the devilish eyeing of our partner’s dish because of course “it’s so much better than what I got” – is it? Is always the question. Or is it only because it’s different from your own?

Options. We love them. 

We love the idea of them. We love what options represent for us. 

The ability to choose. 

And it’s this ability to choose, this ability to have more than one thing open as a possibility that really gets our rocks off. 

Because what does this mean for us? With all these options, these possibilities to choose from, these multiple scenarios. Where could they take us?

And that friends, is the concept of optionality.

It has a nice ring to it, doesn’t it?

What is Optionality?

As one may suspect the definition of optionality – according to Merriam Webster – is something “not compulsory”. 

That doesn’t help us very much for we can assume, in part, that it has something to do with having an option, something from which to choose and something that isn’t compulsory. For more clarity we turn to Taylor Pearson, – 

“Optionality is an idea advanced by Nassim Taleb in his book Antifragile.

At the most basic level, optionality just means having lots of options.

If you develop a skill with many possible job opportunities, you have more optionality than someone who develops a skill that only has one or two job opportunities.

The advantage of optionality is that as the world grows increasingly difficult to predict, you can thrive in spite of not knowing the future.”

And that’s something we can understand. Especially in light of the current state of world affairs. The world is moving at an unprecedented pace, and we are doing our level best to move at the same warp speed. We have our fingers in many pies, all working on our side hustles – because that is, quite simply, the way of the world. Weeks fly by, months, the year and before we know it, we are celebrating another New Year, making resolutions before we have had a chance to tackle our old resolutions. 

Everything is happening so quickly. And with time moving so quickly, it often feels like you need to chop and change and make decisions on the fly. Or at least need to change your mind, reevaluate, refocus, rethink, redo. It’s all very fluid and for those of us that like to plan ahead it kind of has us in a tizz. Because this is far from ideal when it comes to proper planning. 

But this is where optionality comes in. It sounds like a subtle way of saying a disorganised fly-by-night, but it couldn’t be further from the truth. Optionality is, in fact, a way of describing a business that isn’t reliant on a single market, sector, or product to generate revenue. 

A perfect example of a company that has optionality is Amazon. Amazon has it’s ecommerce business, it’s Amazon Web Services (cloud services) and now has its online advertising at Amazon Ads. Three major platforms that they can rely on simultaneously or – if there’s a slump – that can be relied on individually should one platform take a dive. 

There’s flexibility in that and in that flexibility, there’s certainty that Amazon will be up, and running come what may. Optionality provides the opportunity not only to pivot but also to upsell, to upgrade and potentially grow a business from a startup to a multinational company, simply because there are options. 

Call it strategic optionality. 

How to apply optionality to your law firm

Rather than simply protecting current business models, law firms need to be agile and flexible enough looking for the opportunities that others don’t see, making hay while the sun shines. They can do this by addressing these key areas – 

  1. Evolving Culture – generally speaking, teams especially within law firms are accustomed to adopting a plan and sticking to it. Now, keeping optionality in mind, we are asking teams to be continuously monitoring progress and adapting to evolving dynamics. It’s vital to build a law firm with people willing to make course corrections and embark on entirely new routes, even when in mid-flight. Through advanced value stream management (VSM) and strategic optionality practices, teams can begin to support this cultural shift.
  2. An Open-Minded Leadership Approach – to lead a team that embraces optionality at its core, leaders need to have a blend of courage, optimism, open-mindedness, and realism. These characteristics are vital when fostering not only buy-in from their teams but the commitment from various stakeholders that may think them rash. Leaders need to keep their ears to the ground and be open enough to listen to many perspectives, engaging with as broad of a range of stakeholders as possible. It’s also important that they keep an open mind, particularly in rethinking past approaches and decision-making processes.
  3. Intelligent, Data-Driven Planning and Decision Making – as we are aware, optionality means having a number of strategic options available to choose from. However, to make it work, teams need to leverage off data to gain improved insights into opportunities and threats and how to respond to them. Leaders need intelligence to gain a clearer picture of the options available and to choose among those options based on concrete data rather than conjecture. 

Optionality and the right legal tech

Ok you know the whole spiel by now – a law firm that hasn’t invested (even partly), in legal tech that has automated at least some of its labour-intensive work, is a law firm that has been left behind. 

So, what’s a law firm to do if it has been left behind?

Invest in the right legal tech that’s for one thing. 

But with all the options out there, how is a law firm that is desperate to get with the times, to know which is the right move to make?

Well, they can refer to our article on How to Select the Right Service Provider (which they would be doing when choosing from the array of legal tech providers available) where there’s essentially an 11-point checklist that consists of the following considerations – 

1.         Price – ensure the potential service providers give you details of every line item that you will be billed, also ensure that you request the fine print so that you are fully informed of what you’re getting involved in;

2.         Quality of product or service – ask questions – enquire about turn-around times, ask for referrals from other satisfied clients. Do your due diligence. The buck stops with you;

3.         Verify reliability – it’s important that you verify whether the service provider completed projects, in what time frame and whether their clients were satisfied with the work. You need to be able to rely on your service provider to perform as agreed;

4.         Delivery timings – ascertain what their ordinary delivery times entail – are their turnaround times a few days or a few weeks after receiving instruction or after receiving an order? This is important not only to manage your own expectations but those of your clients as well;

5.         Sustainability and financial stability – you need to beable to rely on a service provider includes the assumption that they’re able to settle their financial responsibilities and operate as normal. Ensure this assumption is the correct one;

6.         Flexibility – this is all about how quickly your service provider can respond not only to changes in business requirements but also to changes in your clients’ demands – there is often a need for modification or improvement in product line or service offering, as demanded by a client. If your service provider is not able to adapt to these changes on the fly, then perhaps you’re barking up the wrong tree;

7.         Business presence – It may be worthwhile to check how long your service provider has been in operation for and how many customer reviews they have. Because their business presence reflects their reputation and standing within their industry;

8.         Data protection – this is vitally important if your requirement involves cloud-based products and hosting services. You need to find out where your valuable data will be stored.

9.         Clear communication – Regular communication with your service provider will be necessary for an ongoing, successful relationship. Without clear communication, there can be disagreements about what needs to get done, how it should get done, timing expectations and other important crucial aspects of your transaction;

10.   Training – Training programs, helpdesks offering unwavering support whilst at the same time ensuring upgrade regularity and project planning are decisive weapons in your arsenal of top shelf service offerings. Be sure to seriously consider these when conducting your due diligence;

11.   Customer Service – an often overlooked but crucial item is customer service and after-sales service. Here it’s important that you check whether the service provider has a team to support you after you have decided to utilise their service offering.

And AJS can help you here – with our system that provides a variety of “options” allowing for the flexibility and agility needed to remain pliant to differing and changing requirements, one is given space to breathe. Able to move with current – it’s the very definition of optionality. 

At the end of the day, in a world that doesn’t wait for you to catch up, law firms need to stay – not only on top of things – but ready to move, to change direction, to rethink, to reinvest, reimagine and adopt new mindsets, new goals and new directions all at the drop of a hat. All while maintaining good standing with their clients, the Law Society and while still attracting new clients and potential new avenues of business. 

It’s a lot. 

Having options and thinking in a way that promotes optionality, flexibility and agility is key. Because the aim here is to encourage a law firm that isn’t fragile, one that’s not scared of change or upset. Instead, the aim is to build a law firm that does the opposite – one that’s constantly open to change, embracing disorder and chaos in a way that is orderly, that is principled and one that takes the changes in its stride. 

If you have any questions about the information we have set out above, please feel free to to get in touch with AJS. 

AJS is always here to help you, wherever and whenever possible!

(Sources used and to whom we owe thanks: Forbes here, here and here; Taylor Pearson; Faster Capital; The Good Investors and LinkedIn).

LEAVE A REPLY

Please enter your comment!
Please enter your name here

eleven + fourteen =