Entirely brushing aside any discussion about the consumerism that is rampant in our society, and indeed the inability of material goods to bring lasting happiness, I was recently confronted by the question “what would you like for your birthday?”. Effectively asking me how I would like to invest a small amount of capital to produce a return giving me maximum satisfaction. With the next stage of the implementation of the Legal Services Act here in the UK, some of the more forward-looking firms are asking them a similar question. However, instead of kindly friends and family asking the question, it will be external investors who will be looking for opportunities to find law firms helping them to get a return on their capital.
So here’s the interesting question for lawyers in private practice, if you had an investor offering to put some capital in your firm, what could the firm invest that capital in to produce a significant return? What could the firm do that it simply couldn’t fund at the moment? I think this offers a great opportunity to do some really visionary thinking and prompt some challenging internal dialogue. What does the firm require to take it to the next level? Are there new markets you’d like to enter? New services you’d like to launch? What about a significant talent upgrade? Is the IT infrastructure creaking and holding the firm back? Does the brand need an overhaul and that, coupled with an investment in business development, provide an opportunity to really grow the top line? Is there anything that the firm’s clients are beginning to require that the firm can’t deliver (either at all, or cost effectively) at the moment?
Moving on from the basic questions about where the firm would invest these imaginary funds, there are a host of related questions that can deliver insight. What would your competitors do with that sort of capital? What will happen if they secure that type of funding and actually execute some of these types of plans? what type of returns do we think investors will want on their capital? Would we be attractive to external sources of finance, and if not, why not? If we secured finance and wanted to put some of these ideas into practice, could we successfully implement them? Does the partnership have the right mechanisms for deciding how to allocate this type of funding?
It maybe that external funding is not on the radar at the moment, and as such these questions seem irrelevant, but much like scenario planning (a strategic planning technique I’ve mentioned before), exploring a range of possible futures brings fresh insight to the present . If all you’ve invested is the time for a lunchtime discussion, I think that’s a pretty good return, particularly as you might have had some fun in the process.
For anyone interested, the birthday present I requested (but didn’t receive!) was a Black Russian Terrier dog. A little known but totally cool breed!