Reposition your firm to take
advantage of the challenges
ahead
Peter Scott
PETER SCOTT CONSULTING
www.peterscottconsult.co.uk
The challenges and
opportunities now facing
law firms
Where are we now?
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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?
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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
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Your clients
Your people
The kind of firm you want to be
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How you can achieve your goals
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Your clients
Key issues for clients in the future?
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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…
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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…
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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…
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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?
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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
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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…
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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?
High
Client
Perceived
Ave
Added
X
Suicide
Zone
Value
Low
Low
Ave
Client Perceived Cost
Bowman and Faulkner 1994 Long Range Planning
High
Your people
Developing a strategic vision in a
partnership …
is a process of finding out:
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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
Are your people able and
prepared to deliver what your
clients value?
Your people / your values?
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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?
High
Client
Perceived
Ave
Added
X
Suicide
Zone
Value
Low
Low
Ave
Client Perceived Cost
Bowman and Faulkner 1994 Long Range Planning
High
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…
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An unrealistic and unachievable wish list
Implementation of plans – ‘the making
it happen’
Strategic thinking should not be
routine or superficial
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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
bank progress
move on
make decisions
implement decisions
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
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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
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Why?
Why?
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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
bank progress
move on
make decisions
implement decisions
Ideas to help you on the journey
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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
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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
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Do your partners just pay ‘lip service’ or
do they live it?
Consider an ‘accountability statement’
Timing / a crisis
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Strike while the iron is hot
Turn decisions into action – fast
Assign tasks and responsibilities
Leading by example
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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’
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Create ‘champions’
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Use ‘task forces’
Just do it!
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Judgment
Knowing your partners
80 / 20 rule
Needs courage
Sanctions
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Necessary?
Choice of sanctions?
Do they work?
Examples
Bank progress – move on
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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
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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
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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?