Time to read: 3 minutes
A recent article in the AM Law 100 discusses the growing chasm between the top 50 firms and the AM Law 51-100. The article discusses the issues of declining revenue and what these firms need to do to break this cycle of regression.
There are a number of remedies offered as possibilities for consideration: working on boosting profitability through mergers, seeking a laser focus on certain industries, and finding ways to distinguish themselves in order to raise their profile, and thus their overall profitability – all plausible solutions for a given firm depending on its circumstances.
In the end, the chances of the firm succeeding in these, or any other endeavors, is directly proportional to the quality and completeness of its strategy.
Of all the compelling reasons for your firm to engage in strategic planning, perhaps the most critical is the speed at which forces in your environment are changing. The world swirling around law firms will not remain static and things you may not even know about yet will affect your future.
Accidental success is dangerous. The future, as Yogi Berra once said, “ain't what it used to be.” Succeeding without a plan is possible, and examples exist of firms that have achieved a modicum of success without a plan. If you’re one of them, consider yourself lucky, but ask this question: “Could we have grown and become even more successful if we’d thought a little more about our future?”
Firms that want more business and better business cannot achieve these results simply by assuming their successful past will guarantee their future. They need a well-articulated and commonly understood roadmap to get from where they are today to where they want to be tomorrow. They then need to follow that map without getting side-tracked. They need a strategy.
So, what is Strategy?
Alfred Chandler wrote in 1962 that: "Strategy is the determination of the basic long-term goals of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals”. In a seminal Harvard Business Review article in 2000, Michael Porter says, “Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value”.
What is strategy as it applies to a law firm?
Strategic planning is a process by which a firm determines its overall direction, the elements that are most important in managing the business, what must be done to reach that stated direction, and how the overall strategy will be implemented. In actuality there is no sharp distinction between strategy in business and in law firms. In other words, the proven, highly effective practices used by the world’s most successful businesses can be applied to making law firms highly successful and profitable as well, because, in the end, a law firm is a specialized kind of business, but a business nonetheless – subject to the same competitive and market forces as any other business.
Many, if not most, organizations have a tendency to focus on tactical issues. The typical result is a dispersion of effort and less than optimal use of resources. People are working hard, but the firm is not succeeding as it should. The ideal, and the attainable, is to have all your resources focused and aligned. This is what strategy can help you achieve.
That said, how does your firm go about creating a well-articulated, strongly supported, and implementable strategy – one that will not take six months to create, cost tens of thousands of dollars, but never get implemented?
It all starts with a great strategic planning process. Such a process should have the following components:
As you create your overall strategy, it is also important to keep in mind that it is not an “if you build it, they will come” process. If you want to have a realistic chance of controlling your future, you will have to work to change the dynamics of the market in ways that will contribute to the realization of your plans. Strategy is not a defensive crouch. It is a smart, well-thought out offensive process that should help your firm create a market in which you will not merely survive, but truly thrive.
A caveat – Many law firms equate a solid strategic plan with being as effective as they can be internally. You really need to think of your firm being maximally effective and efficient as the ‘price of admission’ – the basics you must get right in any firm to have a chance to be successful. Lawyers are trained to resolve concerns, remove barriers, correct obstructions and generally deal with the immediate – all time spent in looking inward rather than focusing on the future – and exploiting openings, and building on strengths.
However, strategy must include both an internal and an external focus, prepared in equal measure. By understanding the forces at work in your market, and focusing on the key players and key dynamics, you can concentrate scarce resources in the right places, at the right time, and thereby shift these key leverage points in ways that will enable and insure your future.
A solid strategic plan is a firm’s roadmap to success. If you want success in today’s world, you must employ strategic thinking and execution throughout your firm. Wolf Management Consultants can help you develop a robust strategy that should significantly increase your return on your people, ideas, clients, and capital.
Contact us today at 858-638-8260 or firstname.lastname@example.org
Leadership insights in your inbox.