Gaining a Competitive Edge

Author: Simon Taylor - Lexpert (September 2006 at p. 154)

A firm undertakes a far-reaching strategic planning exercise. The firm decides to re-organize itself into practice areas based on industry sectors. Leaders of the groups are selected from the partnership. Business plans are drawn up for each group. And then daily life takes over, the phone keeps ringing, e-mails keep landing and, in the end, only a small proportion of those business plans are ever implemented. Worse, the parts that are implemented are done so in a piecemeal fashion, with little thought given to how all the pieces fit together in the overall business plan.

It is not difficult to see how this state of affairs comes about. The job of a group leader (how he or she adds value and makes a difference) is ambiguous and not well understood. Neither is full weight given to all aspects of the criteria used in selecting a group leader. In many firms, selection criteria stop at seniority and the profile of the individual’s practice. The new group leaders’ understanding of their responsibilities is taken for granted, as is their aptitude for the role.

Law firms tend to be very well administered. Financial controls, cash-flow management, billable hour targets, receivables control and the like are in place almost everywhere and are deployed to great effect. However, all this is about managing money. Little or none of it is about managing people. They remain largely unmanaged at all levels of the firm. An important aspect of the group leader’s job, however, involves managing fellow professionals.

There are many reasons why busy lawyers fail to properly engage in implementing the group’s business plan. Before the group leader can get someone to do something they are not doing, the group leader first must understand why that individual is not doing it. To achieve this, informal, confidential discussions between the group leader and each partner are essential. The leader must have thought through what the group requires of each member, and must have the ability to successfully convince the reluctant partner to buy into the process. It is not uncommon for group leaders to receive professional assistance at this stage.

All proposed changes need to be incremental, with small, measurable targets and specific short-term deadlines. People tend to participate in change if they see a realistic prospect of success. This does not mean that the pace of implementation is leisurely. It is necessary to establish, and then maintain, forward momentum. The group leader, however, will need “nagging rights,” the right to drop by on a regular basis, to help to overcome roadblocks and to provide the necessary level of encouragement.

There is nothing magical about this process. It is based on the realities of helping another human being improve, and applies to a wide range of activities.

Managing people in a profession may be divided into three broad categories; improving the client base for the industry/practice group; improving associate value; and improving profitability and cash. In each case, each member of the group has a role to play. Each has obligations and responsibilities to fellow group members. Participation cannot be optional. Partners must give up some of their autonomy; they can no longer behave only as they see fit.

At the firm level, there must be agreement up front on shared values and standards of behavior. Partners must agree to function as team members, accepting both the discipline and obligations that come as part of being on the team. Group leaders must accept responsibility for the group’s performance, and must be willing (and able) to devote the necessary time to help the individuals within the team.

For each of the categories, it is necessary for a structured programme to be implemented by all members of the group. When a firm first moves to this model, each partner will go through a learning curve. Each individual in the group needs to be aware of the goals they are to achieve. A written schedule, in which tasks and time lines are established, is essential. Partners may also need to agree to be coached so that they may play their full role in the group.

For a busy partner with a full practice, this is no simple task. There are simply not enough hours in the day for such an individual to run a demanding practice, and to manage a group successfully. Group leaders will therefore need to shift enough fee-earning work as is necessary to allow them to fulfill their role. Some leaders will require professional assistance to achieve this.

Is it worth all the pain to go down this route? Do the gains from implementing the business plan make it worthwhile? The short answer is yes. A group that is focused on its business plan, which commits time and resources to ensure group members have the required skill sets to succeed, and where everyone, from paralegals to parttners, operates as a cohesive team, will always perform in a more efficient manner.

In a mature market for legal services, firms that successfully organize themselves in this way will gain a discernable competitive edge over those that do not. The delivery of legal services in the firm must be aligned with the client's expectations. As those client expectations increase, the wya in which legal services are delivered becomes increasingly important.

The contradiction is that so many firms undertake the planning stage of the exercise, but neglect the implementation phase. But planning alone will rarely provide the sought after competitive edge. To achieve that, implementation is required.