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Firm Leadership

Rants, Raves, Rebuttals, Reflections, Revelations & Ruminations


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Post #639 – Thursday, December 13, 2012

2013: Time To Review Your Strategy

As we slowly close off another year and look to the prospects of 2013, one of the things that I sense that firms everywhere are in need of is a new strategy for growth.  Firm leaders are recognizing, as they catch their breathe after months of flat demand, that the old strategies they have been pursuing are unlikely to take them where they need to go.  Indeed, conventional approaches to developing strategic plan in law firms – those lengthy protracted internal debates that lead to developing monumental documents detailing the firms direction over the coming five-years – seems to now belong to a bygone era.

So, what are leading firms doing today to advance setting their strategic direction?  Unsurprisingly, they are holding their current strategic plans in abeyance while they explore how they might need to adapt to trends that portend changes in their fundamental business models, while also figuring out how to navigate their way through this period of economic uncertainty.

Put slightly differently, the executive committees of more firms are beginning to engage in an Adaptive Strategy Review – scheduling a couple of days to discuss and explore what new trends, developments and issues (signals) will potentially impact their firm going forward and what actions they need to take NOW!   In one of my most recent review sessions our singular agenda topic was: “At the dawn of 2013, what will our legal profession look like, in three short years (2016), and what should we be starting to do now to get to the future first?”

The process for strategic planning has changed.  Your strategy needs to be constantly evolving.  While the eternal truths – about determining your target markets and how you reach them, what specific practices may be evolving that you need to be in, the value promise that leads clients to choose you, hard-to-copy advantages that help you differentiate your firm; and how your resources are aligned – endure; however, a more dynamic and adaptive approach is now needed.  Firm Leaders need to be more flexible, resilient and ready to make necessary adjustments and changes.

The approach to law firm strategy taught by business schools and practiced by most firms is relentlessly 'left brain' - it's focused almost exclusively on 'the numbers' - on data analysis and on formal detailed plans, with strategy sessions the exclusive preserve of a few senior partners.

Great strategies aren't the product of rational analysis alone.  They emerge when a committed team puts its 'whole mind' to work, approaching strategy making creatively and collaboratively - to stimulate 'strategic intuition' and insight, and build buy-in and belief amongst the teams that must make the strategy happen.  Great process isn't just about building the flexibility needed to change direction at the drop of a hat, it's about bringing in 'new voices' and different perspectives into the strategy process - encouraging those who are prepared to challenge the profession’s status quo. 

Reinventing the strategy process isn't a 'nice to do', it is a 'must do' - and only real improvement will feed directly through to your firm’s bottom line.


Post #638 – Tuesday, December 4, 2012

Don’t Send That Rate-Increase Notification

There is a great article in the new issue of Corporate Counsel magazine penned by Susan Hackett  (the voice of in-house counsel at ACC for 22 years) entitled: Ending the HolidayTradition of Outside Counsel Rate-Increase Letters.

Susan poses this insightful question to those firm leaders contemplating sending their clients notices of billable rate increases: are you feeling pretty good about the odds that your most valued assets—your clients and your top relationship partners—are going to find this an overall productive and happy set of conversations that will leave everyone feeling better about the firm?

She further cautions firm leaders to hold off sending automatic rate-increase notices to their clients and offers five logical reasons, reminding us:

• that clients have already finished approving their budgets for 2013 so any notice sent out now comes a bit late;

• that clients have ever more options to using “your” services – from hiring more in-house staff to the non-law firm service providers who are delivering services you used to provide;

• that law firms do not automatically have the right to increased profitability just for showing up and that associates often make more in base pay than many senior in-house lawyers;

• that if you are not the only provider of a very indispensable legal service, you may just find yourself being replaced; and

• there is the distinct possibility that any rate increase “letter” will do nothing but confuse and annoy those of your clients with the most matters currently handled by your firm.

So, if your gut tells you, that for any number of your valued clients, sending out some letter notifying them of your increased 2013 rates might just have them exploring other options – then you might want to seriously heed Susan’s advice.  At the very least, dispense with sending out written notices in favor of . . . investing serious time in some one-on-one discussion with each of your clients.

AND most importantly, read Susan’s sage advice for yourself, as I have only touched upon a few of the salient points she so aptly makes in her article.



Post #637 – Wednesday, November 28, 2012

Six Factors That Can Impede Firm Leader-COO Relationships

Earlier this month I had the opportunity to participate in presenting at a Webinar entitled The Firm Leader-COO Team: A Sensitive Balancing Act in Shared Responsibility.  One of the questions that was asked by the registrants was this one:

What are the danger signs and which factors greatly impede the development of an effective Firm Leader-COO working relationship?

Here was my response.

One needs to keep in mind that the Firm Leader-COO team, in a sense, is two people who have been forced to work together – rather than having chosen the arrangement voluntarily.  That is not intended to be pejorative, but the reality is that a COO inevitably finds him or herself with a brand new boss while at the same time, some new Firm Leader realizes that they now have to work closely with an individual whom they may even know very well.  We shouldn’t lose sight of that.  So there are any number of factors that can make this “forced marriage” rather challenging, if they are not conscientiously addressed.

From my observations and in speaking with Managing Partners and COOs whom I have a great deal of regard for, at the top of my list would be:

To read the complete article – download the PDF.

The above represents my latest column for Slaw.ca   Slaw identifies itself as “a cooperative weblog on all things legal.”  Slaw has been publishing for five years and gets 30,000 unique visitors and about 100,000 visits every month.  For the past two consecutive years it has been the winner of three different awards as the best legal blog.  I’m honored to have been asked to become a regular columnist and invite you to comment on my latest meandering.

 

COMMENT (via Twitter):

Susan Hackett @HackettInHouse

Damn, Patrick, you're good! @ConsultMcKenna posts a great piece @Slaw_dot_CA on firm Mgg Partners & Staff COOs:http://bit.ly/St19Mf  



Post #636 – November 22, 2012

Mistakes To Avoid As New Firm Leader

In a recent McKinsey article entitled, Leading in the 21st Century, the authors state: “when we meet with the men and women who run the world’s largest organizations what we hear with increasing frequency is how different everything feels from just a decade ago.  Leaders tell us that they are operating in a bewildering new environment in which little is certain, the tempo is quicker and the dynamics are more complex.  They worry that it is impossible for CEOs to stay on top of all the things they need to know, to do their job.  Some admit they feel overwhelmed.”

In a similar vein what we’ve learned about the transition that new law firm leaders need to navigate their way through is that there are a number of mistakes that some make in their very earliest days.  Here are five that seem to be very common:

1.         Thinking this appointment is about you, when it’s all about them

As you begin your new role, it is quite seductive to take to heart all of the wonderful best wishes, congratulations and accolades.  You will only succeed when you recognize the truth – you may be the firm’s leader, but your partners don’t work for you.  You now work for them and they have just become your most important client.

2.         Hitting the ground running, before hitting the ground listening

You come to this position with lots of ideas about what you want to accomplish and the temptation will be there to hit the gas-peddle.  But slow down to go fast. Take time to get to know what your partners are thinking about the important issues of the day.  Remember always, that you can only move your firm to the outer limits of your partners’ appetites for change!

3.         Forgetting to inform people about how best to work with you

As you take charge you will be working with an established team with established work patterns and habits.  Important to them is to learn how you like to operate:

- How do you prefer to receive information – in person, by phone, in writing?

- Is your door open or do you prefer that people arrange appointments?

- Do you have any pet peeves that people should know about?

- How do you feel about being called at home?

            Help those who report to you, learn how to work with you.

4.         Confusing change with transition

Change is external, it happens to you; while transitions are internal, they happen inside of you.  Change starts at a beginning and will be remembered by the date you assumed office.  Transitions start with an ending – a process of letting go of the way things were.  Pay conscious attention to how you manage this transition – from finding ways to honor the past with a symbolic ritual or ceremony and thinking of ways to bring the best of the past into the future – to – communicating frequently about what is changing and what is not.

5.         Overlooking the power of small wins

One firm leader began her term with an initiative wherein numerous of the professionals and staff throughout the firm collaborated together in small task forces to identify the firm’s “sacred cows” – those things that were being done internally that made no sense, frustrated clients and impaired the delivery of good service.  She then set about having these same task forces kill the sacred cows by either proposing ways to effectively eliminate the past procedures, change behaviors and adopt new approaches.  Don’t ignore the power of accomplishing a small win.  Listen, look around and find some small win that you can bring about.



Post #635 – Tuesday, November 6, 2012

The Fall 2012 Issue of International Review Is Now Available

The latest issue of my International Review 24-page magazine is hitting the desks of law firm leaders everywhere.  Once again this issue contains a number of pragmatic articles on law firm management and strategy:

Sliced Too Thin  - As shown by Dewey & LeBoeuf’s collapse, widening compensation spreads can destabilize firms.

• Is Your Compensation System A Problem?  - If we never billed another client by the hour, how would we compensate our fellow attorneys?

Handling Boomers Approaching Retirement: Notes From The LAB  - How do you handle the situation wherein a significant number of your partners are baby boomers approaching retirement?

It’s Time To Think Differently About Law Firm Strategy  - In today’s environment of declining demand for legal services, you must be able to challenge conventional thinking in order to grow.

Thought-Provoking Management Metrics  - Here are a few unusual, unfamiliar and unorthodox, but vital metrics that I think are worth ta king a look at in your firm.

I am pleased to have been putting out this magazine for some years now.  It essentially started when I first began mailing copies of periodic articles I had authored to select managing partners back in the Fall of 1998.  Today, I am (to the best of my knowledge) the only law firm consultant to consistently publish his own magazine for firm leaders.

If for some reason, you haven’t received your Fall 2012 International Review magazine, either click on the cover above to download a PDF copy or kindly send me a note and I will be pleased to get a hard copy sent off in the mail to you.



Post #634 – Tuesday, November 6, 2012

The Reasons GCs Fire Law Firms

The other day I watched an interesting interview with Lisa Hart Shepherd, CEO of Acritas Research.  Lisa’s firm interviewed 2500 companies (at least 50% of which generated over $1 Billion in revenues) across 45 different countries.

Acritas found that 33 per cent of respondents fired or dropped a law firm in the last year.  The top reason for switching law firms was pricing, with 22 per cent of respondents noting their previous firm was either too expensive or that the value received was not consistent with the fees charged.  Clients are complaining that law firms are not as efficient as they should be and that they could get far better at using project management systems, more sensible resource allocations, moving some of their lawyers out of the expensive city locations that they are in.

The second area noted by corporate counsel was the quality of expertise or results; manifested in things like a breakdown in the quality of legal advice; inconsistent service from one office to another; strength of expertise being diluted due to losses of talent; and/or not being specialist enough in key areas.

One reason given for switching firms was that the general counsel’s key contact had left the firm, indicating that law firms are not doing enough to institutionalize clients.  However Acritas’s research is also showing that more often when a partner departs a particular firm they don’t tend to take as much of their book of business as they expected.  The learning curve involved as more matters become complex tends to favor the client staying with the firm.  One big problem is that firm’s do not handle it very well when a partner leaves.  They might send a substitute partner to take the client out for lunch, but they don’t invest in convincing the client that they are still committed to the client and that they will work to transfer the knowledge and understanding.

The third area is around the old service and responsiveness issue.  Fourteen percent said they switched firms due to poor service or slow responses from lawyers. And service is probably the easiest thing to fix according to Ms. Shepherd.  “The main problem with law firms is that they aren’t asking often enough and proactive enough about how they are doing.  If they were doing this more often they could rescue clients at risk.”  She said: "In so many cases, it’s clear that firms could have easily prevented the losses if they had had better 'early warning' systems in place – through a structured client feedback program, for example.

Asked if she discovered anything else surprising in her survey work, she responded: One of the things that surprises is the degree of complacency in the market.  So even in this difficult market there is still a bit of arrogance that goes on.  Some of the biggest firms are taking their clients for granted.



Post #633 – Thursday, November 1, 2012

Professional Service Firm Competitiveness

Professional service firms (PSF) and those in knowledge intensive industries are facing the proverbial smoking gun.  Years of unfettered success has left many firms insufficently prepared for what is now a more challenging environemnt.

Firms need to become more competitive but have an incomplete view of what factors drive competitiveness and the role that strategy plays.  Research shows that many firms are unhappy with the results of their strategic planning efforts, perhaps based on misperceptions about what is actually involved  . . .

I'm delighted to announce that a new 60-page e-Book (Professional Service Firm Competitiveness), that I contributed to with my Hong Kong based colleague, Robert Sawhney will soon be made available via Amazon - in Hong Kong, the UK and elsewhere.  Please stand by for further details.

Meanwhile, you may download an excerpt from the text that was published in the recent issue of Professional Marketing Forum’s [UK] distinguished PM magazine – here.



Post# 632 – Thursday, November 1, 2012

You’re Working On The Wrong Thing

According to Michael Porter, the leading teacher, author and thinker on competitive strategy, while speaking about what he thinks is the epidemic inclination of most firms - to try and win, by doing what they do better than their competitors . . .

Michael says: “The worst error in strategy is to compete with rivals in the same dimensions.  

Don’t compete to be the best.  

Compete to be unique.”

It’s NOT about focusing ALL of your attention on executing a strategic plan that calls for things like: increased lateral hiring – like every other competitor – but rather it is about creating competeive differentiation that matters and adds value for clients.



Post #631 – Monday, October 29, 2012

The BigLaw Banker’s Bloomberg Interview

Having partnered with Dan DiPietro from CitiBank at a Webinar this past January (entitled The Future of Legal Services), I have great respect for his insight.  In a rather somber (and well worth watching) interview on Bloomberg TV last Friday, Dan describes the decline in confidence and overall uncertainty that he is seeing in the marketplace, how there are only pockets of demand for legal services and that he is expecting, at best, a flat growth year for 2012.

He reports on the excess capacity that he continues to perceive in the industry and how that has manifested itself in his observing some law firms making “really bad pricing decisions.”  Dan relates one example, of an AmLaw 50 firm, where they are pricing work at extremely discounted levels in order to get the matters.

Perhaps most importantly, Dan indicated that he is expecting to see some additional law firm failures.  The danger season for law firm failure is third quarter 2012 through first quarter 2013.  He notes factors to watch and stated that as a Banker he “looks hard” at departures of quality partners being a leading indicator of distress and also the productivity numbers (average hours of equity partners) to see if they are far below other firms or the current norm.

The law firm 'watch list' according to Citibank is "robust."  And in particular Dan has concern about the firms that have in recent years gone global.  He observes that the global firms are a 'watch list' item, especially with a number of newcomers to the arena and the higher costs, plus some question of how much capacity for service the global market really needs – “this space has gotten very crowded.”  He reports that the old logic of having a portfolio approach and being in multiple locations, believing that if things slow down in the US they will keep going elsewhere, is not working anymore.



Post #630 – Tuesday, October 23, 2012

Strategic Planning Research Study

This week a colleague pointed me to a new research study that you might want to take a look at.

The title of this study is "Strategic Planning In Law Firms” and it consists of responses from 79 of the AmLaw 200 firms to 31 different questions.  Now, I’m not sure how these questions were formulated, but only about 5 of the questions really deal with strategic planning: do you have a plan; who developed it, what resources were used; what growth options are being pursued; and how aggressively.  The remainder (26) of the questions deal primarily with five areas: various metrics, information sharing, staffing, client satisfaction, and managing profitability – all important issues; but all operational in nature (looking at the here and now) not necessarily looking at the future or at the strategic nature of how one’s firm and one’s profession may evolve over the next few years.  In other words, it would appear to me that neither LexisNexis, nor ALM Media really understand what strategic planning is about.

It is my strong belief that a true strategic plan (rather than one that is strategic in name only) should

• focus on the future (“what will our profession look like in 2016 and how do we get to the future first?”) not obsess about the present;

• exploit opportunities and build on strengths (“how do we further enhance the value we provide clients?”) not simply solve problems and correct weaknesses; and

• be concerned with the external environment (“how do we operate in an economic environment that may be very different in the coming years from the continual growth economy that we all grew up in?”); not circle the wagons and firing inward.

One of the findings that jumps out of this report: “When pressed, many of our follow-up interviews revealed that implementation is not as rigorous as it could be.”

Big surprise?  This is an affliction that I’ve seen many managing partners suffer from, something I’ve come to call seeing SPOTS – Strategic Plan On The Shelf.  One of the central reasons that this happens (certainly not the only reason) is because the ‘strategic planning group’ does not then become the ‘strategic implementation group’ once the plan is finalized.  Many firms behave as if the intelligence required to draft the strategy should not be sullied by actually having to roll-up-their-sleeves and now execute their strategy.  Thus the strategic plan is delegated to someone else; anyone else – the busy managing partner and/or COO, the marketing department, some newly formed committee, the practice group leaders and so forth.

One of the other reasons this happens is because partners have not really been actively involved in the creation of the strategy such that they can see a glimmer of their own fingerprint somewhere on the final plan.  And we all know (don’t we?) that no partner buys in to, gets enthusiastic about or willingly supports any plan, direction or change that they have not had some small part in formulating.  I’ve actually witnessed executive committees go off for a weekend to develop the firm’s strategic plan and then spend the better part of the coming year trying to sell it to their partners.

One section of this report deals with ‘Client Relations” and in the survey they asked law firms: “Which aspects of your firm’s relationship with clients would you most like to change in 2012?”  They then proceed to report that just over half (56%) of respondents reported they have a plan to track client loyalty and satisfaction.  This may all be very interesting information . . . but what does it have to do with strategic planning?

Strategic planning is NOT about determining your client’s satisfaction (looking backwards); it’s about discovering what your client’s unmet needs are and what is frustrating the hell out of them in achieving their business objectives.  It’s not about you.  It is about how much you know about them, and what their future expectations and aspirations are.  Have they used AFA’s, are they inclined to offshore any work, what do they think of certain technology applications, and so forth?

I could go on at some length, but in the final analysis, consider: Does your latest strategic plan show you doing anything different from the three or four significant competitors in your marketplace; provide for specific ways to improve your firm’s profitability (not just PEP); and cause other competitive firms to see you as a leader in some particular market niches?


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