How to build a resilient law firm

In episode 19 of the Empowering Law Firm Leaders podcast, Kate Burt, founder and CEO of Hive Risk, discusses how law firms can build resilience to navigate the modern legal landscape successfully.

Kate, CEO of Hive Risk and an expert in risk management and compliance, shares her insights on how law firms can develop effective risk management strategies, leverage technology, and create a culture that supports resilience.

In this conversation we cover:

• Essential characteristics of a resilient law firm leader
• Best practices for risk management
• The role of technology in building resilience
• Strategies for effective succession planning
• Maintaining a resilient business culture

Three fundamentals for building a resilient law firm

1. Vision and Leadership

At the heart of a resilient law firm is a clear vision and strong leadership. Kate emphasises the importance of having a North Star—a guiding principle that aligns the firm’s goals and values. “You’ve got to have the vision of what you’re all in it for, like there has to be a why, what is this law firm in business for?” she explains. This vision should be communicated effectively to all members of the firm, ensuring that everyone is working towards the same objectives.

2. Risk management

Kate advises law firms to start by understanding their unique risk profile. “Who are we as a firm, and what kind of work do we want to do?” she asks. Once this is established, firms can identify potential risks and implement strategies to mitigate them. This includes having robust policies and procedures in place, as well as leveraging technology to enhance compliance and efficiency.

3. Strong Operational Framework

A resilient law firm must have robust systems and processes to ensure efficient service delivery and financial stability. This includes having a solid sales and marketing strategy to keep the pipeline of work flowing, expert staff to deliver high-quality services, and effective financial management to maintain healthy cash flow. Kate emphasises, “Your sales and marketing functions have got to be strong, once you’ve got the work coming in, you’ve got to make sure you’re servicing that work well, so having the right experts to deliver that work and make sure that the quality is there.”

Three quick wins law firm leaders can implement today to improve resilience

1. Develop a strong compliance framework: Start with comprehensive policies and procedures, followed by staff training and regular reviews. “Getting the framework right and accurate, getting the buy-in from the board, is essential for establishing a robust compliance culture within a law firm,” emphasises Kate.
2. Leverage fractional expertise: Kate believes that one of the quickest ways to enhance resilience is by leveraging fractional expertise. Outsourcing key functions such as HR, finance, and IT to specialists can provide high-quality support at a lower cost. This approach allows firms to access top-tier expertise without the expense of full-time hires, ensuring that critical areas are managed effectively.
3. Invest in technology: Adopting tech tools that streamline processes and enhance service delivery can make a significant difference. Kate advises that, “technology plays a significant role in building a resilient law firm. From improving operational efficiency to enhancing client service delivery, the right tech tools can make a substantial difference.”

Practical tips for becoming a visionary law firm leader

The need for visionary leaders in law firms has never been greater due to rapid advancements in technology, evolving client expectations, and the dynamic nature of the legal industry. Kate explains, “The rise of AI, the rise of the innovative tools and the changing way that consumers want to buy legal services is completely different to what it used to be. To be successful in law you need to be at the forefront of what you’re doing and have the vision to bring that to the marketplace.”

What ingredients do you think have made you successful in building Hive Risk? How have you implemented resilience?

Building Hive Risk has been a journey marked by strategic decisions and a focus on resilience. Kate attributes her success to several key ingredients:

1. Entrepreneurial Spirit: Kate’s transition from a traditional legal career to entrepreneurship was driven by an unrelenting desire to innovate. “It was around 2016 that really the entrepreneurial itch could not be silenced anymore. That had to kind of take the route into something a little bit different,” she recalls.
2. Adaptability and Learning: Kate emphasises the importance of being adaptable and continuously learning. “In the early days I was self-taught on risk and compliance. It was around the time that GDPR was about to become effective. So that was a really great foothold for me,” she explains. This willingness to learn and adapt has been crucial in navigating the complexities of compliance and risk management.
3. Strategic Hiring: Building a strong team has been essential for Hive Risk’s success. Kate shares, “One of our first appointments was Tom, probably before we needed him, to say we want a really strong financial grounding here because our vision is big. We are going to grow.” This strategic approach to hiring has ensured that Hive Risk has the right expertise to support its growth.
4. Fractional Expertise: Leveraging fractional expertise has been a key strategy for resilience. “We do that with our HR department, finance, IT department. So even when we didn’t have the money we could afford those [skills] because it’s fractional,” Kate notes. This approach allows Hive Risk to access top-tier expertise without the expense of full-time hires.
5. Technology Investment: Investing in technology has been pivotal in enhancing efficiency and compliance. “Technology plays a significant role in building a resilient law firm. From improving operational efficiency to enhancing client service delivery, the right tech tools can make a substantial difference,” Kate emphasises.
6. Financial Management: Effective financial management has been crucial for maintaining resilience. Kate shares her approach: “There will be cash flow fluctuations and having those strategies to manage that. We keep it closely reviewed, we keep it closely monitored, and I know I’ve got a big red button if I ever need to push it.”

By implementing these strategies, Kate has built Hive Risk into a successful and resilient consultancy. Her focus on adaptability, strategic hiring, leveraging fractional expertise, investing in technology, and effective financial management has ensured that Hive Risk can navigate challenges and continue to grow.

What role does tech play in building a resilient law firm?

Technology plays a crucial role in building a resilient law firm by enhancing efficiency, compliance, and client service delivery. Kate underlines the transformative impact of technology on law firms:

1. Operational Efficiency: “Technology plays a significant role in building a resilient law firm. From improving operational efficiency to enhancing client service delivery, the right tech tools can make a substantial difference,” Kate explains. By streamlining processes and reducing friction, technology helps law firms operate more smoothly and cost-effectively.
2. Compliance and Risk Management: Leveraging technology for compliance is essential for mitigating risks. Kate notes, “With the standardisation you’ll improve compliance, but also some of the tools out there are doing much more to keep you safe by doing the extra checks on maybe client due diligence or sanctions checks.” These tech tools ensure that law firms can maintain high standards of compliance and reduce the likelihood of errors.
3. Client Experience: Technology also enhances the client experience by enabling faster and more efficient service delivery. Kate highlights, “The opportunities there for law firms to do that in a safe way is there to really enhance that customer experience and client journey and also how they deliver their services as well.” By adopting innovative tools, law firms can provide a seamless and satisfying experience for their clients.
4. Scalability: The rise of AI and other advanced technologies offers law firms the opportunity to scale their operations effectively. Kate states, “The rise of AI, the rise of the innovative tools and the changing way that consumers want to consume legal services is completely different to what it used to be. To be that in law you need to be at the forefront of what you’re doing and have the vision to bring that to the marketplace.” Embracing these technologies allows law firms to expand their reach and capabilities.

Investing in technology is not just about keeping up with trends; it’s about strategically positioning the firm for long-term resilience and success. By integrating the right tech tools, law firms can enhance their operational efficiency, compliance, client experience, and scalability, ensuring they remain competitive in the ever-evolving legal landscape.

Building a strong foundation for your future law firm

Building a resilient law firm requires a multifaceted approach, encompassing vision, risk management, technology, succession planning, financial management, and culture.

By embracing these strategies and focusing on continuous improvement, law firms can navigate the challenges of the modern legal landscape and secure their future success.

Watch the full interview with Kate Burt now to discover more advice and guidance on building a resilient law firm. You’ll also hear Kate’s exclusive advice on the practices that should be implemented to mitigate risk and the behaviours that set the successful, competitive law firms apart.