Last year was one of substantial change for many small law firms as they continued to develop and refine their skills, especially in regard to how they run their businesses, not just how they practice law. I spent a considerable portion of 2019 trying to provide a framework for those law firms undergoing these changes to better help them with their strategic planning process and goals.
If you’ve followed this Legal Executive Institute blog series or attended one of the webinars we have hosted, then hopefully you’ve gained an appreciation for how strategic planning for small law firms is a complex and in-depth process, but nevertheless one which can be simplified and made more approachable by taking an intentional, planful, milestone-driven approach.
I wanted to send 2019 off and welcome 2020 in with a brief recap of what this series has covered so far, and a preview where we plan to go in the coming year.
Strategic Planning Made Simple
In the first several blog posts last year, I laid out the basic steps for making a strategic plan that will help you and your firm find success. First, you have to plan your goals. This will involve some soul searching. You need to identify not only where your business performance is strong, but more importantly, engage in an honest assessment of the areas of your business where you can improve.
You must also consider the broader market: Which practices are growing and present opportunity for you? How can you uncover potential areas of risk that you must be sure to avoid? And how best to identify trends that may influence what the legal industry will look like further down the road?
Then set about determining what you need to do and in what order. I recommend looking at goals as a time series. What do I need to do in the next 90 days? The next year? The next three to five years?
“Which practices are growing and present opportunity for you? How can you uncover potential areas of risk that you must be sure to avoid?”– Mark Haddad, General Manager — Small Law Firm Segment, Thomson Reuters
First, the most pressing concerns for keeping your doors open and lights on go in the 90-day category. Then, the next year goals should focus on getting into something new, but feasibly accomplishable. And beyond next year, you need to be aware of what I call “megatrends” — disruptors in the industry that might influence what your practice will look like years down the road so you can start preparing in advance.
After you’ve determined your goals, you have to put yourself in a position to accomplish them. That means dedicating resources — time and money. Neither of these are necessarily easy things to commit; but beyond that, you must consider who should be charged with accomplishing the tasks necessary to your goals. This means looking at how you utilize your timekeepers and other staff, as well as how you optimally use each person’s unique talent.
Without a plan, you will not be prepared to confront the future. And the best laid plans will not succeed without the means — that is, clear resources committed within time intervals — to see them through.
A Few Key Commonalities
It’s a truism that no two firms will have identical strategic plans. However, it’s still worth noting that there are several areas of focus that apply to nearly every small law firm.
As I speak to small law firm leaders around the country, I often hear about many of the same challenges, often related to how they develop new business, interact with their clients, and efficiently manage their firm’s resources. I previously addressed each of these “core competencies” and why they matter individually, but I also thought it was worthwhile to spend a bit of time here discussing how they interrelate.
Let’s start with the internal stuff first — how you manage your firm’s resources. This involves more than just allocating billable work to your timekeepers. It has much more to do with how you handle administrative tasks, the things that keep your business running but no one pays you to do. Fully 72% of small law firm leaders say they spend too much time on administrative tasks, and that’s time that can’t be billed to a client or spent landing a new one. So, you must carefully examine your process and procedures for steps that are unnecessary or that are being done by someone whose time and energy would be better focused elsewhere.
Webinar for Practice Managers: Time Recording and Billing Masterclass
For example, if you as the attorney are the primary person answering the phones all the time or handling your accounts receivable, are you making the most of your time? Are you leveraging your available resources correctly?
This has a direct impact on the second core competency we addressed, which is managing and improving your client relationships. If you spend too much time managing the minutia of running a business, you will have less time to spend making sure your clients are happy. If your intake and billing processes are ineffective or inefficient, you are adversely impacting your brand and reputation, which undoubtedly will impact your relationships and ultimately, your finances.
“I recommend looking at goals as a time series. What do I need to do in the next 90 days? The next year? The next three to five years?”– Mark Haddad, General Manager — Small Law Firm Segment, Thomson Reuters
These should not be the extent of your attention to your firm’s reputation, either. Some 85% of small law firms say that client satisfaction ratings are an important measure of success, but only 37% of small law firms in the US track them. How do you find time to track client satisfaction if you’re spending too much time doing the mundane, time-wasting tasks in running your business? Streamlining your firm’s resource management creates more time to spend paying attention to your clients, employing the “soft skills” clients like to see, exercising your empathy with their situations, and focusing on managing your firm’s brand and reputation.
Of course, the ultimate goal of all of these efforts is to build a more successful and profitable practice. That requires a robust business development pathway. Think of it this way: Both maximizing the efficiency of how you manage your administrative tasks and improving client relationships are necessary components to sharpening your business development acumen. Indeed, both are necessary, but successful business development is more than that.
It also depends on understanding who your clients are and where you can find them. There is a very small sliver of potential clients today who rely on billboards or yellow pages ads rather than digital media — this is true for finding everything from coffee to shoes to lawyers. If you do not have a robust digital presence, you’re going to miss some real demand clients. But it’s next to impossible to create the time necessary to build an effective business development plan that shows that kind of yield without creating that time from somewhere else.
Tying It All Together
It can be daunting to try and keep track of all of these subtle interconnections in your head. Reducing them to paper in the form of an intentional, manageable strategic plan is the key to understanding how they interrelate and what steps need to be taken in what order to order to accomplish the desired result.
You can see how these competencies connect:
- Optimizing your resources creates time to improve client relationships and business development planning;
- Healthier client relationships in turn create new opportunities for business, and are fed by being easy for your clients to do business with; and
- Better business development creates new clients whose relationships and outcomes will benefit from your focus on your administrative processes and client management skills.
The cyclical nature and inter-connectivity of these principles is not coincidental.
If you liked this, try reading: Digital Adoption and the Shake-Up of Legal Practice
What to Expect in 2020
In 2020, a large part of my focus will be on helping to drive a deeper understanding of how the core competencies I’ve already identified can help move your business forward in 2020 and beyond. In particular, this will mean a much deeper focus on business development.
Firms that struggle to develop new business will ultimately struggle to stay viable. And this is definitively an appropriate focus given that the leading pain point for small law firms — with 69% of firms struggling in this area — is around business development.
Small law firms are becoming ever more adept at competing upward and staking a key corner of the legal market thanks to their in-depth expertise, breadth of experience, and agility in action. I look forward to helping these small law firms create even more success throughout the year.
This article was written by Mark Haddad for Legal Executive Institute, a Thomson Reuters publication.