Strategic Planning, Law Firms, and Recessions

Strategic Planning, Law Firms, and Recessions

James R. McCarthy, MS, CPC

Word Count: 989 words
Time to Read: 3-4 minutes

"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way."
Charles Dickens – A Tale of Two Cities

That iconic line from Charles Dickens serves as a proper coda for our very uncertain times.  Today, big firms and small firms, either conservative, or highly leveraged, are all feeling the business pressure from the almost unprecedented fiscal downturn.  Tough economic times now exist for all businesses, including law firms. A severe recession means re-evaluating the budget and tightening the proverbial belt.

In today's economic "perfect storm," practice level, transactional, and litigation work have turned down simultaneously for many firms, with a few offsetting increases in areas such as bankruptcy, M&A, and finance.  It may be hard to know where to turn under such circumstances.

Many of today's law firms have never experienced a true recession and are already having a tough time.  But recessions can be as much of an opportunity for savvy firms as are times when the economy is doing very well.  Those firms that prosper in both economies are those firms that have a great strategy, and follow it.

If you have truly planned well, using a robust strategic planning process, that means that you already have contingency tactics in place.  You are not caught flat-footed, and wondering what practice areas you may need to downsize, or cut out entirely.  You are not contemplating laying off your most junior partners (and maybe losing some rising stars in the process).  You are not asking partners to freeze their salaries, or take a pay cut, or forgo their bonuses.

You are also very, very rare.  The overwhelming majority of law firms do not have a solid strategic plan.  In fact, the last 10 to 15 years have seen an evolution in strategic planning in law firms - from virtually no planning ("it is not professional") to the present (unwilling) recognition that planning is an important part of a firm’s management process.

But the firms that are beginning to plan effectively are still in a very distinct minority. The present level of effectiveness of law firm strategic planning is not at all sufficient to meet the very tough conditions law firms are facing.

A law firm is a business, and just like any other business, needs a path forward, a way to know where they are going, and where their future business will come from. Everyone in the firm will benefit from having a robust strategy.  Such a strategy provides a road map to guide the firm on a course from where it is, to where it wants to be.

When properly developed and implemented, a strategic plan will enable management and the partners to reach consensus on shared goals, identify qualitative and quantitative standards and develop action plans that include timetables and accountability for performance.

A great strategy enables focus on:

  • A proper talent mix
  • A proper practice mix
  • The right kind of  governance structure
  • Profitability
  • Clients (with a laser focus on who you keep and grow, and who you should "fire")
  • Etc.

Look to your strategy.  If you want to be among those who can both prosper during slow times, and take your firm to an even higher level when the overall business environment improves, you must have a robust, actionable, and measurable strategic plan.  This is exactly the proper time to "step back", examine your entire business, and create a dynamic Future Picture for your firm, to prepare it to meet the challenges and opportunities that surely will emerge.

If your firm’s strategic plan does not have a future focus, does not clearly state the strategic direction, is not very explicit and measurable, and is not being well implemented, then it probably needs to be overhauled. In today’s turbulent environment, it is impossible to achieve ultimate success without a solid and effective strategic plan.

Introducing The Prometheus Strategic Planning System™ for Law Firms

The Prometheus Process can help your firm be very clear about its value position in today’s fast-paced, challenging environment.  Prometheus is based on a fundamental assumption: You won’t win in the twenty-first century by merely reacting to change, or making incremental improvements to maintain your current position.  To win, you must decide what you want your tomorrow to be, and then make it happen faster than the rate of change in your competitive environment.

Prometheus is an absolutely unique, systematic and proven method for designing winning strategies. The process itself is straightforward enough to grasp readily, yet sophisticated enough to use for planning and executing a comprehensive overall strategic plan for your firm.

Prometheus guides you to focus on the future and to rapidly decide what the real measurements of success need to be; it teaches you how to quickly find the right ‘targets’ for action that will give you the most return on your investments.  For example:

  • Practice areas, and their associated value to the firm and its clients
  • Market position
  • Cross-selling
  • Billing and collection procedures
  • Etc.

The Prometheus Process shows you how to think about different organizational concepts, and it leads you to plan as carefully for the end of ‘product’ (e.g., services, brand, core knowledge areas, etc.) and business cycles, as for the beginning.

The Prometheus Process demonstrates why the normal serial (one thing at a time) approach to problem solution and strategic development has such a low probability of success; Prometheus provides you with concepts and tools to move to Parallel Operations (moving against multiple leverage points at once), with their high probabilities of success and accompanying low cost and low risk.

As important as strategic thinking and action have always been, in the complex and rapidly changing setting within which the legal profession operates, they are more important then ever.  The Prometheus Process is a comprehensive methodology for rapidly creating and executing good strategy throughout an organization; it applies to any size firm—very large to very small—from multi-practice firms to smaller, more focused concerns.

The Prometheus Processis a proven approach to developing and executing strategy in almost any situation.  It helps individual lawyers, practice leaders, or firms stay ahead of change and complexity.  It is a necessity for any organization wanting to maximize opportunities, minimize risk, and see excellent results on investments of people, time and money

Its essence is simple: think strategically, focus sharply, and move quickly. Prometheushas a powerful message. You can control your destiny—if you are willing to shed yesterday’s thinking about strategy, and make the future what you want it to be.



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