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By Andrew Hedley, Hedley Consulting
We have seen many examples of efforts to improve efficiency and to reduce costs since the start of the great recession. We have witnessed firms conduct restructurings, enter into outsourcing arrangements, implement process reengineering, invest in IT and knowledge management systems, reshape partnerships and consider alternative business structures and external investment.
The core challenge, however, lies in developing strategy which is not centred on running the same race as everyone else, only faster or better. Such “me too” strategies in a law firm context are difficult to sustain in the longer term. This is because, within a peer group, incremental operational efficiencies can be relatively easily replicated and so any cost or profit advantage that has been achieved is fast eroded. The risk is that the reality of pursuing such strategies over an extended business cycle is simply a reduction in fees-charged per unit of activity in what fast becomes a race to the bottom. That is not to say that innovation in operational efficiency is not important but rather that it is unlikely to be sufficient.
These operational efficiency centred approaches rarely change the fundamentals of the client proposition nor create any high-value differentiators. They simply mean that the firm can make a little more short-term profit until downwards pressure on price requires another cycle of streamlining and reengineering.
The real test lies in developing, and of course then delivering, a strategy map which focuses on a different race; one which proposes deep and fundamental shifts in the taken-for-granted assumptions about how a law firm acquires, processes, prices and delivers its services as well as how it engages with its clients in the longer term as well as structuring itself to allow for alternative types of investment and new ways of profi
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Andrew Hedley advises law firm leaders on issues of vision, strategy
and change. Alongside project engagements, he is a sought after
strategy group guide, partner retreat speaker, workshop facilitator and
He is the author of Developing Strategic Client Relationships (2008) and Client Strategy in a Changing Legal Market
(2011). Andrew has been admitted as a Fellow of the Institute of
Directors, the Strategic Planning Society, the Chartered Management
Institute, Cambridge Marketing College and the Royal Society of Art.
Hedley Consulting is recognised as a leading boutique strategy consultancy within the legal sector.
0330 161 1234