We have alluded in previous posts to the responses we’ve seen across the sector in the face of extremely tough conditions – including blanket cost-cutting, cutbacks in support functions, and a redirection of resources away from marketing and business development.
Whilst these actions are at the very least understandable, management must now turn the focus towards the future. Strategy needs to be a priority (urgent and important), and marketing and development are a vital part of this.
There are three core elements to this process:
Look Back and Learn
Considering the downturn of the late Eighties, we can identify a similar pattern, whereby cutbacks were focused at all levels below the very top. Leverage was reduced as a consequence, leaving a gap in the hierarchy and leading to a shortage of talent and salary inflation in post-recession years. As we look forwards, firms need to consider extremely carefully how they will manage their staffing in order to prevent this situation.
Economics over Politics
Law firm leaders have an extremely rare opportunity, and one that will not last long. The economic imperative to maintain (or recapture) profits and develop a successful growing business can be used to push through fundamental changes to the partnership that may never otherwise occur because of internal political posturing. Inefficient partners and practice areas can come under scrutiny in a way previously inconceivable, all in the name of preserving PEP.
Gone are the days when a partner can legitimately claim to ‘own’ a particular client. All clients must be clients of the firm, not of any individual partner, and they should have access to key fee earners and decision makers within the firm. The clear goals are client protection, client retention and cross-selling, all of which should be consistently monitored. This can only be achieved if the partners trust each other, and as such they must ‘share’ clients in the interests of the firm as a whole.
If managers can grapple with these key issues, they have a real opportunity to grow and develop their firms, and to push home competitive advantage in a market undergoing rapid transformations.