Building for the future Peter Scott PETER SCOTT CONSULTING

Building for the future

Peter ScottPETER SCOTT CONSULTING

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

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

Four management rules for tough

economic times

Partner performance Delivering business development Build loyal teams Make good use of downtime

See attached article

Where are you now?

What are the most important lessons you

have learnt from this recession?

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

Financial results are just the tip of the iceberg

Hyperlinks

SlickGraphics

Nice PicturesCoolGUI Stuff financial results

YourYour ability to manage clients, colleagues and yourself

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

Forward planning - focus on the fundamentals

The kind of firm you want to be Your clients Your people How you can achieve your goals

How to develop a realistic vision of the kind of law firm you want to be

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)

Differentiate strategy from…

An unrealistic and unachievable wish list

Implementation – the ‘making it happen’

ENTER ZONE OF UNCOMFORTAB

LE DEBATE

MAKE DECISIONS

FACE UP TO REALITY

FOCUS ON BIG ISSUES

MAKE IT HAPPEN

Strategy is a continuous journey…

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 …

This will require leadership

Thinking and visionary Challenging Inspirational A determination to implement

change

Your clients

What does a law firm need to do to be successful?

Gain competitive advantage

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

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

An integrated strategy is required

External perceptions Internal attitudes

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

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….?

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

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

Position your firm to provide value for money

Client

Perceived

Client Perceived Cost

HighLow

Suicide Zone

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?

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’

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

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’

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…’

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’!

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

To add value in this way will require an integrated strategy

External perceptions

Internal attitudes

Your people

Their values

Why high performance has never mattered more

What do your partners really value?

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?

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

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

Is this a block on business

development?

“The only thing this firm values is personal billing!”

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

Sharing clients

Is it valued in your firm? Is it measured? Is it rewarded?

(What gets rewarded gets repeated)

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

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

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?

Is a lack of internal skills holding you

Do your people all have the skills necessary to enable your firm to

achieve its vision?

Building higher performance

Values

Skills & Behaviours

Performance Metrics–Quality/Quantum

Performance Review

Closing the Performance Gap

Learning & Development Strategy

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

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

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

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

How many of you do not have any partners who…

Are underperforming Have attitude / behavioural problems

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

Why high performance has never mattered more

Direct financial loss? Lost clients? Lost opportunities? Poor partner recruitment / retention? Poor staff morale / high staff

turnover?

What do you do about the partner who is under performing or has an attitude problem?

To do nothing should not be an option

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

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?

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?

What criteria and standards will

you apply in agreeing performance levels with partners?

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

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”

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

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?

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

How to get the best out of your people?

Help them maximise their full potential –

This requires investment in your people

Investment in your people requires?

- Leadership and vision- Values - Training- Mentoring- Coaching- Empowering - Supporting

Investment in your people?

For example

Who has a ‘New Partner Programme’ designed

- to bring people through to partnership?- and which continues throughout

partnership?

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?

Do you have mechanisms to prevent the attrition of high quality performers?

Are you investing sufficient in your people to realise their financial value to your business?

How to achieve your goals

You have developed a realistic plan, but…

will you have the resources on your own

to achieve your goals?

If not, then consider merger

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

Is merger the Answer?

How consolidation between firms in a fragmented profession can help build competitive advantage

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’

This will require RESOURCE

Resource which individual firms cannot

realistically and at an economic and

acceptable cost provide themselves

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…’

The need for resource

Often a lack of resource of expertise

(client perception surveys will show if this is the

Often a lack of financial resource

(inability to invest in your people and in the

business)

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

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

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

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:

- risk management

- HR (a people business!)

- Technology

- Build market share and profile to attract

- better quality people

- better clients

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

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.

But something else is also needed…

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

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

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

Provide clients with the depth

and breadth of expertise they

now require, where and when

they need it

Build the quality management

which will be required to

successfully compete in the

future

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

Is this a Vision you share?

Any questions?

Building for the future Peter Scott PETER SCOTT CONSULTING

Documents

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