building for the future peter scott peter scott consulting
TRANSCRIPT
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Building for the future
Peter ScottPETER SCOTT CONSULTING
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PETER SCOTT CONSULTING
Where are we now?
The economy Legal Services Act implications Greater regulation and compliance PI insurers’ attitudes Technology Client needs are changing Greater need for resource A fragmented profession A need to become more competitive
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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
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Four management rules for tough
economic times
Partner performance Delivering business development Build loyal teams Make good use of downtime
See attached article
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Where are you now?
What are the most important lessons you
have learnt from this recession?
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A chance to make a new start
Which of those lessons will you use to build success for the future?
Name one change which would make a greater difference to your firm than any other
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Financial results are just the tip of the iceberg
Hyperlinks
SlickGraphics
Nice PicturesCoolGUI Stuff financial results
YourYour ability to manage clients, colleagues and yourself
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There may never be a better time to face up to your sacred cows
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Forward planning - focus on the fundamentals
The kind of firm you want to be Your clients Your people How you can achieve your goals
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How to develop a realistic vision of the kind of law firm you want to be
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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)
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Differentiate strategy from…
An unrealistic and unachievable wish list
Implementation – the ‘making it happen’
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ENTER ZONE OF UNCOMFORTAB
LE DEBATE
MAKE DECISIONS
FACE UP TO REALITY
FOCUS ON BIG ISSUES
MAKE IT HAPPEN
Strategy is a continuous journey…
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is a process of finding out:
What your (current and prospective) clients 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 …
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This will require leadership
Thinking and visionary Challenging Inspirational A determination to implement
change
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Your clients
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What does a law firm need to do to be successful?
Gain competitive advantage
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Competitive advantage
“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” *
How well do you know what your clients value?
*Everyman’s Dictionary of Economics
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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
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An integrated strategy is required
External perceptions Internal attitudes
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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
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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
BUT for smaller firms to do this….?
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How to compete with the best?
Being small is not about being second rate
- not a mirror image of larger firms - but must be able to compete with best of large and small in chosen markets But depth of resource may be crucial in
some markets
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Smaller firms need strategic focus
They cannot be ‘all things to all men’ To be competitive requires focus on a
client-type / work type mix Sharper focus on client/work types than
larger firms wider focus than niche firms
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Position your firm to provide value for money
Client
Perceived
Added
Value
Client Perceived Cost
High
HighLow
Low
Ave
Ave
X
Suicide Zone
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How can you find out what clients need?
Ask them Commission a survey of clients and
referrers
Do your clients say you are adding value?
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Some clients’ 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’
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Some more client comments…
We never see the partners Their response times leave much to be desired Their quality is patchy I don’t believe they have the resources They lack depth – if a partner is away, there is
no one else
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Lack of communication with clients can be
the problem
‘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’
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Lack of resource may make a firm
uncompetitive
‘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…’
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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’!
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Finding out what your clients value…
will identify the key skills and behaviours which will enable the consistent delivery of your value proposition
But – are your partners prepared to adopt the values and behaviours necessary to enable the firm to do so?
There may be a need to carry out an internal consultation
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To add value in this way will require an integrated strategy
External perceptions
Internal attitudes
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Your people
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Your people
Their values
Why high performance has never mattered more
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What do your partners really value?
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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?
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The views of partners in one firm…
We are not a united firm, but merely a collection of individuals
We are too “gentlemanly” in internal operating style
Is everyone prepared to put in the extra effort to make the difference?
If not we should reward more those who are prepared to work harder
Accountability needs to be spelt out and formally accepted by every partner
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And some more from partners in the same firm…
Some partners are seen as blocks to our making progress
Some partners are too comfortable and not prepared to stretch themselves
We should be a bottom line driven firm where every part of the firm should make its required margin
There should be zero tolerance financial management
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Is this a block on business
development?
“The only thing this firm values is personal billing!”
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Why should I?
Share my clients with my partners? What good will it do me? I will not earn any more whatever
good things I do
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Sharing clients
Is it valued in your firm? Is it measured? Is it rewarded?
(What gets rewarded gets repeated)
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Internal attitudes - but why should I?
To do this may require a shift in culture
There will be a need to build a culture of sharing
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Some useful questions to ask internally to gauge where partners stand on important issues
Why do you come to work? What does this firm really value? What do you most like about this firm? What needs to be changed in this firm? Are we really happy only earning £[ ]? Are you prepared to let [Senior / Managing
Partner] visit your clients to talk to them about the service we provide?
List [six] things which would really make a difference to this firm
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Are internal attitudes in your firm holding you back?
Are you presently unable to add value to your clients because of internal attitudes and behaviour?
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Is a lack of internal skills holding you
back?
Do your people all have the skills necessary to enable your firm to
achieve its vision?
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Building higher performance
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Values
Skills & Behaviours
Performance Metrics–Quality/Quantum
Performance Review
Closing the Performance Gap
Learning & Development Strategy
Building higher performance
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Where to start?
Developing a strategy for driving up performance should not be a piecemeal exercise
Every aspect of a firm should be looked at
Needs to take priority because it is a barrier to your becoming competitive
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Building higher performance
The market place and your competitors set the standards
Do you want to be a player in your market? If you really want to compete - need to build a CULTURE OF HIGHER PERFORMANCE - Need to examine WHAT KIND OF FIRM
YOU WANT TO BE
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The views of partners in one firm…
We are not a united firm, but merely a collection of individuals
We are too “gentlemanly” in internal operating style
Is everyone prepared to put in the extra effort to make the difference?
If not we should reward more those who are prepared to work harder
Accountability needs to be spelt out and formally accepted by every partner
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And some more from partners in the same firm…
Some partners are seen as blocks to our making progress
Some partners are too comfortable and not prepared to stretch themselves
We should be a bottom line driven firm where every part of the firm should make its required margin
There should be zero tolerance financial management
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How many of you do not have any partners who…
Are underperforming Have attitude / behavioural problems
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How many firms have partners who…
Are underperforming but could improve?
Have attitude / behavioural problems and are unlikely to improve?
If you identify the problem, the solution
may identify itself
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Why high performance has never mattered more
Direct financial loss? Lost clients? Lost opportunities? Poor partner recruitment / retention? Poor staff morale / high staff
turnover?
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What do you do about the partner who is under performing or has an attitude problem?
To do nothing should not be an option
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Need to distinguish from…
Contribution / reward mismatch (which may be the result of under
performance) Reward mechanisms aim to fairly
match reward to contribution NOT the way to deal with under
performance
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Distinguish under-performance from non-performance
Under-performance Partner performance can in many ways be improved Reward can be matched to contribution
Non-Performance Performance that consistently falls short of
MINIMUM agreed levels? How should this be dealt with?
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How to approach the problem
How have you decided that a partner is under performing?
What criteria and standards have you applied?
What should partners be doing more of, less of or differently?
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Building higher performance
What criteria and standards will
you apply in agreeing performance levels with partners?
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Performance standards
Your market place sets the standards
Align your performance standards with your firm’s objectives - to enable the firm to COMPETE - to help the firm achieve its VISION
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Do your partners know what is required of them?
Are they clear as to their ROLES as partners?
Do you agree business plans and targets with them every year?
“but nobody told me I should be doing that”
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Standards?
Need to be communicated to and understood by partners
Help needs to be given where necessary - coaching/mentoring
- putting training in (its) place
Communicate, Communicate, Communicate
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Building higher performance – some of the challenges…
How do you achieve buy-in to a higher performance culture?
How do you break down the barriers to change?
How do you build performance into the
behaviour of partners?
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The role of management in building higher performance
Does your management have a clear brief? Is the style and structure of your management
organisation appropriate? Does your management have the necessary
skills? Is your management providing the LEADERSHIP
required?
Sanctions on partners may be required
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How to get the best out of your people?
Help them maximise their full potential –
This requires investment in your people
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Investment in your people requires?
- Leadership and vision- Values - Training- Mentoring- Coaching- Empowering - Supporting
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Investment in your people?
For example
Who has a ‘New Partner Programme’ designed
- to bring people through to partnership?- and which continues throughout
partnership?
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Do you have transparent partner admission / progression processes?
Do you have an associate / partner development programme in place?
Do you ask your people about their career ambitions?
Do you focus your investment in people to advance your and their objectives, rather than sheep-dipping people through training
courses?
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Do you have mechanisms to prevent the attrition of high quality performers?
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Are you investing sufficient in your people to realise their financial value to your business?
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How to achieve your goals
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You have developed a realistic plan, but…
will you have the resources on your own
to achieve your goals?
If not, then consider merger
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It is a fast changing world and law firms need to constantly adapt
The economy Legal Services Act implications Greater regulation and compliance PI insurers’ attitudes Technology Client needs are changing A fragmented profession A need to become more competitive Greater need for resource
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Is merger the Answer?
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How consolidation between firms in a fragmented profession can help build competitive advantage
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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
‘They always try to sell to us on price – but what we are really looking for is a good job to be done at a reasonable price’
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This will require RESOURCE
Resource which individual firms cannot
realistically and at an economic and
acceptable cost provide themselves
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Is lack of resource making you
uncompetitive?
This is what clients said about one firm –
‘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…’
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The need for resource
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)
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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
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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
Firms need to ask themselves:
“Will we be able to achieve our objectives on our own”
If not, then merger may need to be considered
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Breadth and depth of expertise
Actual – to provide clients with the added value they
require
Perceived – by clients compared to competitors
=a greater ability to win and service work – which neither
legacy firm could have done
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Financial resource
Access to greater financial resource can help to:- Provide for quality leadership and management- Provide for necessary infrastructure to underpin provision of high
quality legal services:
- KM
- risk management
- HR (a people business!)
- Technology
- Build market share and profile to attract
- better quality people
- better clients
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Greater expertise and finance
can help to provide greater reach / access to new and
larger markets:
- Geographic- Sectors- More ‘quality’ client types- More premium work types
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A catalyst for change
A consequence of a merger is that it can
provide the opportunity for firms to implement changes which could not
have been made otherwise.
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But something else is also needed…
A Vision
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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
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The BRAND must reflect the substance of the new firm in terms of …
QUALITY of its people and clients How it ADDS VALUE
Satisfied clients are the only measure of
success and are key to building a
profitable professional firm
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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
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Quality Resource to enable the new firm to…
Attract and retain the best
talent
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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
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Quality Resource to enable the new firm to…
Build the quality management
which will be required to
successfully compete in the
future
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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
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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
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Is this a Vision you share?
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Any questions?