Reposition your firm to take advantage of the challenges ahead Peter Scott PETER SCOTT CONSULTING

The challenges and opportunities now facing law firms

Where are we now? A need to become more competitive Client needs are changing The economy Legal Services Act implications Greater regulation and compliance PI insurers’ attitudes Technology Greater need for resource A fragmented profession Other factors driving change?

The need to be more competitive “Competition is a process by which … services that people are not prepared to pay for, high cost methods of production and inefficient organisations are weeded out and opportunity is given for new…services methods and organisations to be tried” * Could this apply to the legal profession today? * Everyman’s Dictionary of Economics – A. Seldon and F.G. Pennance 1964

The greatest danger? - complacency! “Our strategy is to keep a lid on expenditure and weather the storm. We cannot reinvent ourselves as something we are not” Managing Partner of a major London law firm – Autumn 2008

An alternative view… “there seems to be a disturbing strategy of hunkering down, cutting some fat and hoping that business will return to normal. That is not good. The terrain will look very different when this is over. This is not a minor blip, but a discontinuity” “the problem is that most senior lawyers think only two months ahead. They have no coherent picture of the future. The planning is not being done. And it is senior lawyers who need to be driving change” Professor Richard Susskind – May 2009

Where are you now? What are the most important lessons you have learnt from this recession? Which of those lessons will you use to build success for the future?

Re-appraising your competitive positioning

Forward planning - focus on the fundamentals Your clients Your people The kind of firm you want to be How you can achieve your goals

Your clients

Key issues for clients in the future? Factors determining choice of law firm? - clients? - referrers? Critical factors which drive client satisfaction?

What do client’s want? “They always try to sell to us on price – but what we really want is to have a good job done at a reasonable price” Client feedback from a perception survey commissioned by a law firm

Some actual comments… We never see the partners I don’t think they show adequate interest in us Their response times leave much to be desired Their quality is patchy

Some more… I don’t believe they have the resources They must not assume people know what they do They lack depth – if a partner is away, there is no one else

And some more… They try to sell to us only on price but what we really want is good quality service and advice at a reasonable price They are OK for most work but when it comes to something really important to us, we go [elsewhere]

What can a law firm learn from such comments? Highlight issues that need to be addressed Partners should not go into ‘denial’ ‘they are not talking about us’! or ‘its not true’!

Core issue to add value More than the competitors In a way which is regarded as valuable by clients Needs to be value clients care about - clients’ perspective - not yours

You will add value that clients care about if… You provide clients with what they need At prices they perceive to be value for money; and You do this better than the competition

Would your clients say you are adding value?

Where are you going to position your firm to compete? Client Perceived Added Value Client Perceived Cost Bowman and Faulkner 1994 Long Range Planning High Low Ave X Suicide Zone

Your people

is a process of finding out: What your (current and prospective) clients and referrers value What your partners value Identify key skills and behaviours which enable the consistent delivery of your value proposition Developing a strategic vision in a partnership …

Are your people able and prepared to deliver what your clients value?

Your people / your values? What is valued in your firm? Do you reward what you value? Do you invest in what you value? What does it take to succeed at your firm?

Are some of your people holding you back? Are you presently unable to add value to your clients because of: internal attitudes and behaviour? Lack of skills?

What kind of firm do we (realistically) want to be?

Where are you going to position your firm to compete? Client Perceived Added Value Client Perceived Cost Bowman and Faulkner 1994 Long Range Planning High Low Ave X Suicide Zone

Developing a strategic plan

What is strategy? ‘A realistic plan or course of action to gain competitive advantage, which has clear and achievable objectives and utilises available resources’

Differentiate strategy from… An unrealistic and unachievable wish list Implementation of plans – ‘the making it happen’

Strategic thinking should not be routine or superficial Strategy is about THINKING THINKING based upon sound knowledge

Thinking Leaders focus on the BIG issues The VISION of what the firm can realistically become The ability to COMPETE

A continuous journey… focus on BIG ISSUES make decisions implement decisions bank progress move on

Leadership involves facing up to reality Leaders CHALLENGE everything: - Why do we do things this way? - Why do we still do this kind of work? - Why do we continue to accept under performance?

There may never be a better time to face up to your sacred cows

Testing the strategy Internally – with partners and staff Externally – with clients and referrers (it is good client relationship management to talk to your clients)

Implementing your strategy – the making it happen

Implementing decisions Question Why do many partnership strategies fail? Answer? Failure to implement agreed plans Why?

The nature of partnerships People businesses Need to take your people with you on the journey

‘A little less conversation a little more action please’ Elvis Presley

A continuous journey… focus on BIG ISSUES make decisions implement decisions bank progress move on

Ideas to help you on the journey Skills Knowing your partners Accountability Timing / a crisis Leading by example Using the TEAM Just doing it Sanctions

What skills will you need?

Knowing your partners What makes them ‘tick’? What makes them insecure? How will they react? How do we limit ‘fall-out’?

Partner accountability ‘We have no room for those who put their personal agenda ahead of the interests of the clients or the office’ David Maister

Accountability Do your partners just pay ‘lip service’ or do they live it? Consider an ‘accountability statement’

Timing / a crisis Strike while the iron is hot Turn decisions into action – fast Assign tasks and responsibilities

Leading by example Leadership is crucial for change Practice what you preach Live the strategy

Use the ‘power of the team’ TEAM? Together Each Achieves More

Harness the ‘power of the team’ Create ‘champions’ Use ‘task forces’

Just do it! Judgment Knowing your partners 80 / 20 rule Needs courage

Sanctions Necessary? Choice of sanctions? Do they work? Examples

Bank progress – move on Incremental journey? or Quantum leap?

You have developed a realistic plan, but… this will require RESOURCE - resource which many individual firms cannot realistically and at an economic and acceptable cost provide themselves

Is lack of resource making you uncompetitive? Often a lack of resource of expertise (client perception surveys will show if this is the case) Often a lack of financial resource (inability to invest in your people and in the business)

The resources to be competitive Will you have the resources on your own to achieve your goals? If not, then how will you achieve your goals?

How can merger help to provide us with the necessary resource? NB – merger is not a panacea - often just a better platform on which to build a more competitive law firm - not about size for the sake of size

Merge for the right reasons Merger is not a strategy – it is a means to an end – to gain competitive advantage Merger can help build RESOURCE – to enable a firm to provide its clients with what they want at a price which the clients regard as ‘value for money’

The scale of a new firm may help to enable… the new firm to be developed at an acceptable economic cost to each constituent firm which the individual firms could not on their own provide

Quality Resource to enable the new firm to… Attract and retain the best talent

Quality Resource to enable the new firm to… Provide clients with the depth and breadth of expertise they now require, where and when they need it

Quality Resource to enable the new firm to… Build the quality management which will be required to successfully compete in the future

Quality Resource to enable the new firm to… Provide the necessary infrastructure to underpin the effective provision of high quality professional services demanded by clients

A Vision To build a BRAND which can begin to compete with larger, more developed firms for better quality, higher value work leading to greater competitiveness and profitability

Any questions?