PETER SCOTT CONSULTING PETER SCOTT CONSULTING Briefing Note May 2007

PETER SCOTT CONSULTING Developing clear and realistic strategy

PETER SCOTT CONSULTING Adapting to change ‘It is not the strongest of the species that survive nor the most intelligent, but the ones who are most responsive to change’ Charles Darwin ‘Origin of species’

PETER SCOTT CONSULTING Challenging your thinking

PETER SCOTT CONSULTING Challenging everything about your firm as it is today

Your Firm?

PETER SCOTT CONSULTING Do you recognise any of these?

PETER SCOTT CONSULTING Are you forever pushing at a closed door?

PETER SCOTT CONSULTING Is this one of your major problems? This will happen to your talent unless……… TALENT £

PETER SCOTT CONSULTING Do you have partner behaviour issues?

PETER SCOTT CONSULTING “That’s a great idea …for the rest of you!”

PETER SCOTT CONSULTING “Heavyweight gorilla” “You can’t manage me. I’m a big biller!”

PETER SCOTT CONSULTING “Ahh…only five more years to go”

Can you answer ‘YES’ to the following questions?

PETER SCOTT CONSULTING Is your firm firing on all cylinders? Answer – Yes / No

PETER SCOTT CONSULTING Are all your partners hungry? Answer – Yes / NO

PETER SCOTT CONSULTING Do you have the ‘right partners’ on board to help you achieve your goals? Answer – Yes / No

PETER SCOTT CONSULTING Are all your partners prepared to be managed? Answer – Yes / NO

PETER SCOTT CONSULTING Are all your partners prepared to be accountable? Answer – Yes / NO

PETER SCOTT CONSULTING Do your partners have sufficient financial discipline? Answer – Yes / NO

PETER SCOTT CONSULTING Can you say your firm has no under performing partners? Answer – Yes / NO

PETER SCOTT CONSULTING Should all your equity partners really be equity partners? Answer – Yes / No

PETER SCOTT CONSULTING Are there sanctions on a partner who refuses to comply? Answer – Yes / NO

PETER SCOTT CONSULTING Is it clear who is running your firm? Answer – Yes / NO

PETER SCOTT CONSULTING Are you prepared to change every ‘NO’ to a ‘YES’? Answer - ?

PETER SCOTT CONSULTING Are you prepared to provide the LEADERSHIP required for change?

PETER SCOTT CONSULTING Developing your strategy Understanding the process

PETER SCOTT CONSULTING Strategy is a continuous journey… focus on BIG ISSUES make decisions implement decisions bank progress move on

PETER SCOTT CONSULTING We need to understand the meaning of ‘strategy’ ‘A realistic plan or course of action to gain competitive advantage; Which has clear and achievable objectives; and Uses available (but scarce) resources (existing or to be generated)

PETER SCOTT CONSULTING What should be our realistic objectives in… / 9? 2009 / 10? / 11?

PETER SCOTT CONSULTING For example…. Which parts of our firm are we going to: Grow / invest in? Dispose of?

PETER SCOTT CONSULTING 2008 / 9? WE ARE GOING TO earn PEP of £[ ]K Is this realistic? – must be tested Do we all want this?

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

PETER SCOTT CONSULTING Strategic thinking should not be routine or superficial Thinking based upon sound knowledge

PETER SCOTT CONSULTING Where to start? Strategic planning is a process of: Logical analysis of internal / external forces Planning and decision-making based upon that analysis

PETER SCOTT CONSULTING In partnerships there is a particular need to focus on… Internal attitudes External perceptions in order to formulate a realistic plan

PETER SCOTT CONSULTING However something needs to be present first… Leadership

PETER SCOTT CONSULTING Leadership… Thinking and visionary Challenging Inspirational Ability to take partners with you A determination to implement change

PETER SCOTT CONSULTING Challenging leadership That challenges everything Above all leadership that is prepared to face up to a firm’s SACRED COWS

PETER SCOTT CONSULTING Internal attitudes Culture Values Behaviour What kind of firm do we REALISTICALLY want to be?

PETER SCOTT CONSULTING Take an internal reality check Issue a [confidential] partner / staff questionnaire to find out what your people REALLY think about your firm.

PETER SCOTT CONSULTING External perceptions Do you know what your clients think about your firm? Do you know what they want from your firm? Often a perception ‘gap’

PETER SCOTT CONSULTING Take a reality check Commission an external survey of: Client/referrer opinions Client/referrer reasons for using others Analysis of firm’s performance viewed by clients/referrers Benchmarking against competitors

PETER SCOTT CONSULTING What can a law firm learn from a client perception survey? Highlights issues that need to be addressed Partners should not go into ‘denial’ ‘they are not talking about us’! or ‘its not true’!

PETER SCOTT CONSULTING Value Clients Care About Your clients’ perspective Not your own perspective Is there a gap?

PETER SCOTT CONSULTING Some client perceptions… ‘I don’t think they show adequate interest in our business’ ‘They are not proactive with their own clients’ ‘They don’t think laterally’ ‘They never visit, and they should if they want to increase the quality of the relationship’

PETER SCOTT CONSULTING How well do you communicate with your clients? ‘Out of sight, out of mind. They must ensure regular communication’ ‘I am not convinced I have their message or why they are different’ ‘Their profile is very low – they need to create more noise in the market’ ‘They must not assume that people know what they do’

PETER SCOTT CONSULTING Is lack of resource making you uncompetitive? Some of your clients may think so - ‘I don’t believe they have the resources’ ‘Sometimes they lack polish and quality in depth’ ‘Depth of expertise – I have only one partner to contact on a day to day basis, which is a little limiting…’ ‘City firms have greater depth of expertise’

PETER SCOTT CONSULTING The value gap It is the client’s perception of value that matters Too much emphasis on service attributes Not enough on helping clients achieve results

PETER SCOTT CONSULTING You will add value if… You provide clients with what they want – and more At prices they perceive to be value for money; and you do this better than the competition

PETER SCOTT CONSULTING Each part of your firm needs to position itself… Client Perceived Value Client Perceived Price High Low Ave X Suicide Zone

PETER SCOTT CONSULTING Groups doing volume work Where should they position themselves? How should these groups work to add value?

PETER SCOTT CONSULTING Each part of your firm needs to position itself… Client Perceived Value Client Perceived Price High Low Ave X Suicide Zone

PETER SCOTT CONSULTING Volume / Low Value – Added Services Value enhanced by - driving down cost - facilitating implementation of solutions Low value –added groups will compete on processes and price – technology driven services with minimum professional input

PETER SCOTT CONSULTING Issues in providing volume / low added value services Understand the need to move north to hold position - must constantly squeeze out more value for same cost Invest in standardising processes Ensure financial strength to stay the course Avoid creating the perception of reduced “quality”

PETER SCOTT CONSULTING Other work types Where should these groups position themselves? How should they add value?

PETER SCOTT CONSULTING Each part of your firm needs to position itself… Client Perceived Value Client Perceived Price High Low Ave X Suicide Zone

PETER SCOTT CONSULTING High Value – Added Services Need to: Nurture wisdom/experience within the firm Ensure added value is perceived as valuable High value- added services – strategic impact on client – generally wisdom/experience driven

PETER SCOTT CONSULTING Moving to High Value Added Services Focus on specific client types / work types Seek leadership in a few, cohesive segments Understand how brand influences PAV - brand is about differentiating yourselves

PETER SCOTT CONSULTING Moving to High Value Added services Do not add too much PAV – especially in a price sensitive market Focus cost reduction only where it will not jeopardise value added Ensure added value is always perceived as valuable

PETER SCOTT CONSULTING Above all… Be realistic

PETER SCOTT CONSULTING A final thought… “Change before you have to” Jack Welch

Any questions?