The Managing Partner Forum publishes the outcomes of their managing partner surveys each year. The results reveal interesting details about the challenges managing partners face. This year, 69% of the participants indicate that their main challenge is productivity, 63% face pressures on their billing rates and 53% struggle with increased competition for clients. To address these problems, doing more of the same will not make a significant difference. Instead, it is time for a novel approach to business development.
Starting with a strategic plan
Change starts with a strategic plan. Without a plan you don’t know where you are going or aiming for when it comes to business development. Fortunately, nowadays, the majority of law firms have a strategic plan.
1: Improve effectiveness of business development efforts
2: Improve lawyer productivity
4: Grow selected practice areas
Besides stating the intent in your strategic plan, it will also be necessary to define specific goals. How many new clients should you attract as a result of the improved effectiveness of the business development efforts? What is the goal for improved productivity? Does productivity mean just more billable hours for everyone, or does that also mean more efficient use of non-billable hours – to secure future growth? What does growth mean? More partners, clients, revenue, billable hours, or increased profitability? Be specific as to what you are trying to achieve and when.
A novel approach to business development
To achieve these goals, there is a better way to go about business development than doing more of the marketing and networking all other law firms are doing too. New business development enables the firm to develop novel services your clients will value. Novel in the sense that they go beyond offering legal assistance for a particular deal or problem.
Examples of novel services are offering are Brexit service offering or industry solutions. Think of it this way. If you would hire an IT consultant to build you a CRM system, you would not want them to just implement the CRM system. Instead, you expect that they help you to close deals faster and smarter with this CRM system. In other words, you expect a solution to a pressing problem, not just a product or a service. In the same manner, new service development enables you to offer your clients valuable legal solutions to run their operations smoother and at lower (legal) risks.
Executing upon the strategic plan
Creating a strategic plan is one thing, it requires you to define which areas to go after. Acting upon it is quite another challenge. Of the firms with a strategic plan, 34% of the firms rate themselves as fair at the implementation, 2% as straight out poor. As these are self-reported answers, the reality is probably even harsher.
Implementation is often very challenging, especially when there is no budget allocated to do so. Have you defined how much you are willing to spent to achieve the strategic goals. Did you define who is responsible for achieving each of the goals? If so, how do you expect these partners and associates to do this, and when?
Budgeting for the implementation
Not budgeting for the implementation of the strategic plan does not take less time consuming or cheaper to implement the plan. You are just hiding the costs. It is therefore much better to define upfront, how much time and effort to spend on the implementation of the strategic plan. What can the firm afford in terms of non-billable hours?
Besides creating a budget, it is also important to track the time spent on the implementation of strategic initiatives. That is on the successful and less successful initiatives.
There are several positive side effects of registering time and effort spent. First, you can reward all those who have participated in the efforts. Second you can monitor the effectiveness and efficiency of the implementation process. How long did it take to come to the conclusion that an effort was not worth pursuing? How long did it take to implement promising ideas? Third, you can calculate and compare the return on investment of various initiatives.
You can track time spent on strategic initiatives in your own system. Alternatively, new service development systems like T4 will automatically track how much time teams spent on a particular initiative and which tasks take the longest to complete.
Besides hours, executing upon a strategic initiative also requires support. If the plan is to grow a selected practice area, does the responsible partner know the steps required to do so? Are they versed in new business development? Do they know how to vet ideas and how to transform the most promising ideas into valuable new service offerings?
In other words, besides time to implement strategic priorities, also set aside a budget that will help the involved partners and associates to develop the necessary skills to achieve these priorities. By they way, developing these skills does not need to be expensive. By saving participants two or more hours of their time, an online new business development training program easily pays for itself.
New business development activities
New business development makes it possible to turn many of the challenges law firms face into opportunities. It enables firms to zoom in on important and urgent challenges of their clients and come up with a valuable solutions.
By executing new service development projects, your organization will build the capabilities to address any future challenge and opportunities. New business development process entails addressing available (competing) technologies, possible disruption by non-law firms, and pricing issues, and turning these threats into opportunities.
Perhaps most importantly, these new services – ones that are highly valued by your clients because they address a pressing need they have – will enable you to increase your rates, increase lawyer productivity and build profitable practice areas.
How and where to start? Start by changing your approach to business development. Don’t keep doing more of the same. Complement what you are currently doing with new business development activities. That is, activities that take a pro-active approach and result in new service offerings. Reach out to growing industries and ask your current clients. What do they need from you now and in the future and develop a service around such a need.
Organizing for Innovation gladly assists you in the process of creating the capabilities and infrastructure to develop and implement new services as part of your business development efforts.
Building the capabilities for new business development will guarantee the prosperity and future of your law firm. Your clients will know where to go for the challenge they face today and tomorrow.