A large part of my practice is in helping law firms to create a strategic plan. A strategic plan is a road map that identifies the destination of a firm over a declared time period, and says something about how the firm will get there. Law firms have been late to the table with some fairly standard business practices, strategic planning being one of those. Some firms pride themselves on their lack of planning. “We don’t need those things”, they tell me. “We just do great work and the clients keep coming back”.
In this way, law firms have become a victim of their own success because often, the clients have indeed kept coming back. But there is a shift occurring in the marketplace that will make it far more difficult for firms to rely on client loyalty for their continued success: too many firms are moving from a first to a second-generation law firm as founding Partners move into retirement.
Half of my consulting practice over the past four years has been in helping firms to make this shift safely. Often, the remedy starts with strategic planning. But when I hear a Partner suggest that the firm has survived very well without planning, I have to shake my head.
In my experience, most founding Partners were geniuses in terms of strategy. They intuitively knew/know how to create vision and motivation in a firm; how to marketing the firm; how to build the credibility of the lawyers and the reputation of the firm; how to win and keep clients; how to grow the firm over time. But they are closet strategists and planners. They do these things so automatically that no one realizes the careful thought and consideration that have gone into each year. They might not have had a document, but they definitely had a strategic plan.
The ultimate purpose of a strategic plan is to make a firm stronger and more successful than it is today. Even if you felt that your firm was in perfect shape today, there are outside forces that might change that, unless you consider them carefully. Here are just a few examples:
- Over 50% of law school graduates are women, and an increasing number of your clients are probably women as well. Yet women make up a small percentage of law firm partnerships. Your law firm might not be representative of your client base. In the olden days, that mattered less. Today, it might cost you your business. We need to look at why so few women make it into the Partner ranks (or stay there once they arrive).
- We are ignoring the generational difference between our lawyers at our peril. There are fundamental differences between today’s senior Partners and Associates. If we want a law firm to survive beyond the current Partners, we may need to look at how to structure the firm in a way to better serve the needs of the next generation of Partners. That requires some long-range planning and probably a series of small but important steps over time.
- Law firms have tended to run according to how lawyers wanted to practice. That’s not a business, that’s a club. Smart firms are starting to understand that they should be shaped by client need, not by lawyer need. Does the marketplace suggest there’s a practice area you should grow? Grow it. Is there an area that is in decline? Adjust your support for that practice (don’t increase its marketing budget or add in Associates). Are you referring work out that you could be doing yourself? Find a practitioner in that area to join you. Of course, this requires that you closely monitor your practices and the marketplace, and make projections about where you should grow, where you should shrink, and what potential new services you should add to the firm’s list.
- Making money is no longer a key driver for lawyers. Sure, they want to make more money than anyone else on their block…but by their tenth year as a lawyer, it’s not what motivates them. Rather, money is something we need to get right. We all need to feel that we’re being fairly compensated for what we do, but after that we need to feel valued, driven and be given responsibility and challenge. Most of all, for those of us who work in a group we need to know there is a common vision for our organization. And making money is not that vision. So, what is?
These are just a few examples of the questions that law firms should be grappling with, and of items that can be helped with strategic planning.
Great law firm management begins with strategic planning, but that’s only the beginning. A wise person reminded me earlier today that implementation is more important than the perfect strategy. As an industry, we’re getting better at creating plans by bringing in consultants, or creating committees, task forces and working groups to research and make recommendations to Partnerships on issues. But law firms tend to be terrible at following through to implementation. Here are some typical reasons why:
- We don’t engage enough people in the process so we don’t get buy-in for the end product.
- There may be one or two lawyers who are quietly opposed, and who then sabotage efforts when implementation begins.
- We under-estimate the amount of work required for implementation, or the amount of time Partners are willing to dedicate to the task. So, implementation begins, but then falls apart.
- We forget to include accountability points throughout the process, so a project may get off to a running start but stalls somewhere along the way, and nobody notices until year end reporting time (or whenever the next consultant is hired and someone says “hey, didn’t we try to do this two years’ ago?”)
- And my personal favourite: implementation is desired, but the partnership doesn’t know how to make it happen so it stays on the “too hard pile”. No one is putting the idea down, mind you. They just aren’t exactly supporting it either.
The solution to these issues differs according to each firm, but none of the examples above should be allowed to take down a strategic planning process. During and after the process, a firm should take whatever steps are necessary to minimize disruption, and set the planning process up for success.
Yes, a strategic plan should be documented so everyone is clear on the firm’s objectives. But strategic planning can’t just be a piece of paper. It’s an expensive process and far too important for a firm to ignore or implement poorly. There must be commitment by everyone to pursue the objectives outlined in the strategic plan – year by year and until the end of the date period. By definition, a strategic plan should be aspirational. That means that change and certainly action are required. It’s not necessarily going to be easy. But as a strategic plan declares what success looks like, working toward its achievement should be rewarding.
Heather Gray-Grant is a business strategist, marketing expert and executive coach for law firms and lawyers. She can be reached at email@example.com