4 ways to put your law firm strategies into actions

I am sensing a new mood. Over the last ten days I have engaged as many new clients, all with a stated intent to change. All want help to prioritise resources and to make the change count. The question they are asking is: what change can we make that will have the most significant and positive impact on our business? Traditionally this has been the excuse for a good old-fashioned “away day”: an excuse to generate new ideas, make new plans and above all, create a warm fuzzy feeling that the uncertainty of the future has been wrestled into, if not a paper bag, then a well-crafted paper. Unfortunately, too many strategic planning processes are ill-defined with very little preparation or research and little or no bottom line impact. As a result, very little changes. Why is this? Here are the most probable reasons:

  • Instead of decisions, the process resulted in a requirement for more information, more plans, and more reports.
  • It assumed the future will closely resemble the past OR that the future will be wildly different from the present. (Bill Gates once said that people often overestimate the change in the next two-three years but hugely underestimate the change in the next ten years.)
  • It was internally focused.
  • It was skewed by the personal interests of people in the room.
  • Making decisions is risky – the individuals fear they might be wrong, or open up fissures in the firm.
  • Making decisions is hard, implementing hard decisions is even harder!
  • Most law firm structures do not reward good strategy. And turkeys, as one client reminded me this week, do not vote for Christmas even if it will make the butcher a lot of money.

So – here are my top tips for making your strategic planning process work:

  1.  Create a broader understanding of the imperative for change
  • Identify the five truly critical issues facing the business, the most likely scenarios over a two, five and ten year cycle and the alternative courses of action open to the firm each case.
  • Keep the focus on the external environment – how are competitors responding? Ask “what is the worst that can happen and what if it did?”
  1.  Keep it real
  • Challenge underlying assumptions “Is that true? How do we know?”
  • Answer the question: what do we need to do right now to make this happen? “If the decisions do not involve major risks or investments and/or changes in competitive posture or if the decisions do not have to be made now, they are the wrong decisions” Louis V Gerstner, Jr CEO IBM in 1974
  • Answer the question: what if we don’t do this now? If the answer is nothing, don’t be surprised if nothing happens! (tip: it’s not the right decision.)
    Include a resource and planning/control plan: What do you need to make this happen and how will resources be released? How will you know what success looks like and who is going to keep the plan on track?
  1. Consider the firm as a balanced portfolio of smaller businesses
  • Consider which areas offer future growth, where could we be more profitable, which are a contribution to overhead?
  • What is the minimum level of investment required to keep cashflow stable? Can we reinvest elsewhere?Actively look for areas where the firm can disinvest as well as new areas for growth.
  1. Make big decisions
  • Don’t be afraid of making the big decisions – if they are the right decisions, waiting won’t make them better. (See “what if?” question above.)
  • Only make a few, well chosen decisions that can be costed and implemented within available resource.
  • Agree in advance how to hold each other to account for implementing the strategy. Once outside the room, those whose income or position is threatened step away from their commitment to the strategy. Even those committed to it can find other things to do that are more pressing (for which read “easier”).

Of course, a strategy is only as good as its implementation. Pushing through a tough, even strategically important decision requires genuinely good leadership, persistence and courage. Combine that with consistently good communication, and your strategic process is much more likely to result in actions that will take the business forward. Then instead of being seen as an expensive day out, the strategy day will be seen as it is, a considerable investment in the future productivity, profitability and success of the business.

Filed Under: Practice of Law

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