The writing on the wall #7 – location, location, location

18 12 2014

Location, location, location...

Let’s for a moment put aside the discussion as to whether an investment by a law firm into premium real estate makes sense. Let’s assume that clients don’t object to funding acres of marble and an atrium full of lush vegetation. This question is about where your firm’s offices are, not what they are.

The location question is very personal. For some firms it might be simply be about growth – we are outgrowing our current premises – do we just need a bigger office, or should we open a second office (and if so, where). For other firms it might be about national expansion, or response to an existing or future competitive threat. However for many firms the stakes are higher, and it’s about international expansion.

It may be an understatement, but international strategy is not easy. Aside from the economics, the cultural, regulatory and language differences, suddenly the complexity and management overhead increases dramatically. Whether the market entry strategy is through acquisition, merger  or lateral hire, you can then throw a whole host of political and personal factors into the mix.

With that in mind, opening a new office seems like a decision to be made thoughtfully, but in a fast moving market that is changing more than ever, how can you make the time you need to really assess where the right locations are for you?

 





The writing on the wall #4 – the commodity game

12 12 2014

 

IMG_4955-0.JPG

It seems that whatever the practice area, lawyers talk in hushed tones about their work becoming a commodity. Corporate law, employment law, technology law are among the areas where there is much gnashing of teeth and squeezing of margins.

Much of the debate focuses on whether to do the commoditized elements and if so how to do them profitably, but there is little discussion of what will replace that work at the high end. I suspect the implications of this will be felt in the not-too-distant future.





Lawyers – Just. Do. Something.

30 08 2011

It seems like there was some sort of psychic alignment in the UK legal blogging community last week.

James took a break from his corporate finance practice and went down to the firm's somewhat impressive atrium to think about what was happening in his market

As the news came rolling in on changes facing the UK market (Neil Rose’s site Legal Futures is often a good place to start), the Entrepreneur Lawyer   Chrissie Lightfoot wrote a great post about the disruption and fear facing the profession. Julian Summerhayes then followed up with a thought provoking piece on the need to avoid apathy in client relationships.

All the time my mind was whirring with two related themes – massive change, and the need to do something.

The first message that I really (really) want to get across is that change in the profession is happening NOW. I mean right now.

Many of the lawyers who are waiting for the full implementation of the Legal Services Act with a “let’s just wait and see” attitude are either deliberately burying their heads in the sand, or are sleepwalking through a time of significant change, leading to both opportunities and threats.

Just look at the recent headlines:

Take a step back and take a fresh look.

This is change that’s happening right now.

It’s not round the corner.

It’s not things that might happen.

It’s happening.

Now.

The other point that’s really important to grasp, is that the change is affecting the whole profession. It’s not just a B2C issue, there is fundamental change going on all through the profession. From the sole practitioner whose livelihood is threatened by consumers being offered quicker, cheaper and easier solutions from competitors that didn’t exist three years ago, to the multi-million pound law firm facing disaggregation of the large scale projects that used to be the foundation of the partner’s seven figure salary. The change is real and far-reaching.

Finally, please trust me when I say that there is much, much more going on which is not public at the moment.

Since I left practice as a lawyer, I’ve been fortunate to be involved in the profession in a number of different roles, including consultant and LPO provider. Some of the conversations I’ve had with law firms, in-house teams and other consultants have shown me that there is some really forward thinking going on in the background, leading to business models being re-engineered and investment being secured.

So why are so many firms not doing anything?

Well, putting aside the difficulty many law firms have with change generally (which I’ve written about before), and some of the negative behaviours driven by the hourly rate billing model,  I think there are a number of other reasons why it’s not top of mind for every law firm partner.

The first is that there are more pressing short term challenges. Cash flow being one of them. The last two to three years (depending on the make up of your practice) has been incredibly tough, and amidst the restructurings and insolvencies, there are plenty of firms that quietly weathered the initial storm but  are finding things getting harder and harder as the road out of recession continues to be a slow one. Whether it’s cash flow, refinancing or opportunities for consolidation, short term survival is often the top priority.

Another reason is that it’s just plain difficult. The market is moving at a tremendous rate now, with new competitors, new technology and regulatory change coming in waves. Just keeping on track of the environment is tough enough, let alone analysing it and working out how to respond. Many firms don’t have strategy experience in-house (and there was a great article this week on how forcing strategy work on non-strategic thinkers doesn’t often work out) and I suspect many just don’t know where to start.

But whatever the reason, now is the time to act. The speed of business these days is too fast to wait and see.

Much has been written about the change in the product development world and the speed to market imperative (“fail fast”) – how it’s no longer realistic to test extensively to get a product perfect before launching.

The parallel I’d draw here is that now is not the time to assess the market to nth degree, and then craft a perfect strategy over the coming months, before pulling together a detailed project plan and implementing through the annual budget cycle. All of these steps may well have merit, but given how fast the market is moving, it’s more than likely that by the time you’re done, you’ll be too late. The opportunities (of which I believe there are many) will have passed, or the threats manifested.

So to wrap up, now’s the time to act. Block out an afternoon and at least do some thinking, or if you’re not at the thinking stage, some sensing to find out what’s happening in your market segments. Then take the lead and turn thinking and dialogue into action.





The Tao Of Law Firm Strategy

14 07 2011

Differentiation is getting harder for law firms. We all know that.

Botchit & Co were delighted with the originality of their new logo - there was something fresh yet timeless about it

Clients constantly state that they want their lawyers to have deeper knowledge of their business and environment.

As the market changes, more and more firms are re-examining their business model and questioning how they are going to compete and win in the future.

Some think about doing more of the same. Some think about doing the same thing but cheaper. Some think about doing the same with a twist.

But how many think of doing less?

Actually stopping doing a lot of work types and focussing on a core that they can do better than anyone else?

  • Drop the unprofitable work.
  • Drop the work that doesn’t fit with the core.
  • Drop the work no-one likes doing.
  • Drop the work that can be done better or more efficiently or in other ways (automation, offshore etc).

What’s left? Could it work as a business?

With so much focus on consolidation in the market, who is looking for the gaps?

Where are the agile players that can really own market segments?

Finishing with a (very!) different approach to any I’ve done before. Inspired by verse 80 of the classic of Chinese culture, the Tao Te Ching (Ralph Allen Dale translation), I give you “The way of the niche”

Let us create small firms
With genuine specialists
Who, without stress, can produce
More than their clients expect
Who are so happy with their practice
They have no thought of moving elsewhere

Who forgo billing targets
Because they have no need of them
Who return to honest forms
Of serving clients,
And the simple enjoyments
Of practising law

Although these firms
May be so close to each other
That they hear the tapping
Of each other’s keyboards
And the ringing of each other’s blackberries,
Living profitably, they will have no need to invade each other’s markets.





What lawyers can learn from the U.S. Navy SEALs

9 05 2011

The politics, morality and socio-economic consequences of Osama Bin Laden’s death will undoubtedly be discussed for years to come, and this blog is certainly not the place for that debate. I would however like to stake my claim to being the first commentator to raise the issue of what lawyers can learn from the incident, and in all seriousness, there are some great lessons in there.

The senior partner wasn't really convinced that the seal was up to the job of providing security for the new Docklands office

As regular readers of this blog will have spotted from various book references I’ve made before (“On War”, “The 33 Strategies of War” and of course, the management consultant’s favourite “The Art of War”, I’m a bit of a fan of military history, and I have certainly read my share of special forces memoirs. I’m constantly impressed by the ability of elite forces to defy the odds and accomplish mission objectives which often seem impossible if not downright suicidal.

Now, admittedly comparing the theatre of war to the legal market place may be a stretch, but I do think that there are strategies and tactics that lawyers and law firms can learn that can help them compete and win in what is an increasingly unforgiving environment.

In particular special operations success can often be defined in terms of “relative superiority” – that is the ability of a smaller attacking force to gain a decisive advantage over a larger or well defended enemy. Let’s be honest – not all law firms have the resources (financial or otherwise) of the Magic Circle or Wall Street behemoths, so perhaps there are lessons that smaller firms or teams can use to win in their own markets.

To analyse the mission, I went to a book which is significantly less popular than those I listed above, but is likely to become more so since recent events – “Spec Ops; Case Studies in Special Operations Warfare: Theory and Practice”, written by William H McRaven, the architect of SEAL team six‘s mission in Abottabad.

The basic framework he uses to analyse the case studies has three basic elements: planning, preparation and execution. To cover all three here would take way too long, so let’s take a look at planning to see how a law firm might measure up to the special forces.

Arguably, this phase of the Bin Laden mission had been underway since 2001 (when in December he escaped from the caves of Tora Bora), but for the purposes of this post we’ll assume planning started in August last year when the compound he was found in was put under 24/7 surveillance. The intelligence gathering was both comprehensive and intensive, which are words which are often not front of mind when it comes to law firm planning.

Too often in my experience, strategic and tactical initiatives are based on the lawyer’s existing perception of a situation, be that a general awareness of what’s going on in a particular market, some second or third-hand insight into what a competitor is doing, or perhaps an interpretation of client needs without any real probing or testing. Hard facts and recent data is often in short supply.

If I contrast that with my experiences in the corporate world, where competitive intelligence is harvested from multiple sources, consolidated and analysed. Client insight is a specialist function, often carried out by a “voice of the customer” type function, whose job it is to really get underneath the skin of clients and prospects and understand their needs.

Now of course, particularly for smaller firms and teams, it might not be realistic to expect to call on these resource, but it is feasible to replicate their functions. There is a huge amount of insight available out there, both qualitative and quantitive, which is accessible and free. Client surveys (perhaps part of a key client quarterly review programme), market surveys (perhaps using a tool like survey monkey), reading the annual reports of clients, setting Google alerts for the names of your competitors and targets. Pulling together hard, factual information, synthesising and analysing it, can make a tremendous difference in the robustness of your plans.

Another thing that the special operations community do well at the planning stage is building in some independent challenge. In his book The Operators, Mike Ryan explains how the first stage of planning is typically for an IAP (Immediate Action Plan) to be drawn up – this is a basic outline that can be executed quickly if the need arises. It also then forms the basis of the more detailed OPLAN (Operational Plan), where the team assess multiple options before narrowing down and then ultimately deciding on the way forward. At this stage the plan is then passed to  an independent board for review – the reviewers will be people from a similar backgound to the planners, but removed from the mission itself so they can give a sensible, but independent critique.

This seems to me to be a very sensible sanity check, but again how few firms and teams reach out to others elsewhere in the firm for an independent review? In all fairness, I suspect that one of the very pragmatic restrictions on law firm’s ability to plan effectively is the fact that planning itself is not a chargeable activity, and thus gets pushed down the list of priorities. If planning itself is not given much weight, it’s easy to imagine that critiquing another team’s plan isn’t going to get much head space.

In weighing up the potential effectiveness of plans, Mcraven highlights two factors that I think are worth pulling out here. Firstly, simplicity of objectives. While the Bin Laden mission was far from simple, its primary objective was very clear. The operatives were not having to take decisions in the heat of combat to prioritise objectives or work out what was required for the mission to be a success. Contrast that with some law firm strategic or marketing plans that talk obliquely about their aims and goals, but lack the clarity for the lawyers and support staff tasked with executing them to be absolutely clear about what is required.

Secondly, Mcraven talks about the need for surprise and in particular the role of creativity in planning missions to generate this. I’ve written before about the need for creativity in law firms, but I think it’s instructive that even in such a rigid and formal planning environment as military special operations, the critical role of creativity is acknowledged. For those lawyers who believe that creativity has no place in the cold, hard world of legal practice, my suggestion would be to think again about this assumption.

There are of course a host of other reasons why special forces soldiers can achieve what they do – aside from the preparation and execution phases of the missions that I mentioned earlier, there’s no doubt that selection and training play a massive part in their success. Those are topics for another day, but if you implement some of the special forces discipline in your planning, I have no doubt that relative superiority in your market place can be achieved.

Now lock and load. (sorry, couldn’t resist that)





Strategy without creativity?

1 11 2010

Walking towards Holborn yesterday I looked up at a building to see the statement “strategy is nothing without creativity” plastered across the window. My instinct was to file it away in the “I agree” compartment of my head, and, as the song says, “walk on by”. The more I thought about it however, the less easy I found it to compartmentalise my response in that way.

The energy team's market strategy was lacking detail

Perhaps betraying my origins as a lawyer, I thought the best place to start the discussion was by getting clear on what I’m talking about when discussing strategy. A key distinction is between “corporate strategy” and “market strategy”.

By corporate strategy I think about the high level decisions of what markets a business will compete in, and possibly (depending on factors such as how disparate those markets are), a broad set of principles on how the business will compete.

By market strategy I mean how the business will compete in its chosen markets.

It is in this arena I want to examine the role of creativity,  however in my experience, there are more fundamental questions that many law firms need to ask themselves about their market strategies before creativity comes in to play.

The first is whether market strategy actually exists. Often firm strategy (essentially the corporate strategy mentioned above)  is set by the management and then “rolled out” to the partnership, practice areas, industry sectors etc. At the market level, often the business planning that happens is purely financial in nature; usually as part of the budgeting process. Targets are set, and teams then work out how they are going to deliver those numbers. This then leads into a very tactical discussion; perhaps looking at how to grow major accounts or penetrate particular prospects.

The market strategy layer is, not always, but often, completely missed. And as a result, firms often struggle to articulate their positioning in the market (one of the key outputs of market strategy) and when asked about their strategy for a particular market often end up talking about their experience or resources, which may well be relevant, but means the lawyers often lack the clarity of a well defined strategy that they can articulate.

Another benefit of having a market strategy, is a deeper understanding of what the competition are doing. When the day-to-day pace of life is so fast, it’s easy to get by with a cursory understanding of what other firms are doing in the market, relying on what’s in the legal press, and what you hear from clients and contacts. However, the benefits of actually analysing competitors, working out how they are different from you and your practice, what they do well, are significant and can shape the way you think about your own practice (and crucially how you present it to clients and prospects).

So, in a roundabout way, this brings me onto creativity. There’s no doubt in my mind, that at the market strategy level creativity can bring tremendous benefits, and create the sort of breakthrough strategies that could help a firm really win in the marketplace. However, if many firms don’t really have a market strategy, then I think there are opportunities for those firms who do have one to reap significant benefits simply from implementing their strategy well and communicating it clearly (both within the firm and to the market place).

Implementing and communicating strategy are both huge topics worthy of their own posts, so I’ll leave those for another day. However, the point I’ll finish on is just to mention that creating a winning market strategy doesn’t have to be a laborious, bureaucratic process – in Strategy SafariMintzberg lists a whole host of ways in which strategy can be formed (from emergent and entrepreneurial strategy through to more formal planning and design processes).

My bet is that if market strategy is something your team has done before, a small time investment would pay big rewards.

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Strategy as a thought?

11 11 2009

In the increasingly fast paced world we live in, it seems more and more difficult to make plans for the future. There are all sorts of ways of thinking about strategy; what it is, how it’s formed, and what it does (a favourite book of mine is Strategy Safari by Mintzberg), but a common view is that it’s a game plan. A way to compete and win.

The problem, as I see it, is that these days, game plans need to change, and change fast. Clients change, their needs change, competitors change, technology changes, everything changes. Yesterday’s plans can hinder not help. Yet at the same time, if an organisation changes its strategy in real-time, will it lose its identity? Cause confusion?  Allocate resources effectively?

There’s no single answer for this; every business needs to develop and adapt a model that works for their circumstances. What I do believe, is that those companies that go through a charade of an annual strategy process, and spend months working on long term plans with the intent of sticking rigidly to them over the coming years, face more and more challenges from agile, more relevant competition.

Often with these sorts of annual processes, the market information used is far removed from the market by the time it gets to the strategic decision makers; it is distilled, analysed and sanitised before it is used (not to mention often months out of date and/or originally prepared for a different purpose). Competitive information is often paper thin and much of it speculative. Thinking about the future is often incremental and conservative, constrained by the process itself. The process itself often takes weeks (if not months); how can this be right for today’s marketplace?

Thinking time; strategic and practical?

One school of thought might be to say that strategy of this type is simply not relevant any more, but I think that’s over simplistic. Somebody (everybody?) needs to be thinking about how to win (or how to collaborate?). The underlying principles of competition, industry analysis (Porter et al) remain valid and helpful frameworks; they just need adapting and using differently.

In a changing world, the way organisations think about strategy also needs to change, but in this period of transition it’s critical that organisations and people don’t stop thinking all together. Consider who is thinking, why they are thinking, and what they are thinking about. But don’t stop thinking (or doing, but that’s another post).

 

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Strategy without creativity