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Its a new year and things are going to be different this year. We spent a little time
reviewing our mistakes of the past. We are resolved this year will be different.
We have a rock-solid plan. New ideas, better ideas, discipline of action and a whole
lot more are ready to catapult us to the vanguard of our industry. The team
brainstormed, labored and honed our direction to a finely polished point. Like
Alexander the Great, well gaze out and watch the competition crumble before our
well-orchestrated attack. Sound familiar?
We start the year with the greatest of intentions. Profit planning, sales territory
alignment, pricing strategy, targeting and in many instances a shiny new strategic
plan. Thats January. Then what happens? Well, according to Execution: The
discipline of getting things done by Larry Bossidy former CEO of Honeywell and
business advisor Ram Charan, the typical executive team spends less than four
hours making sure the plan works. Somehow they let planning replace execution in
their consciousness.
This isnt going to be a lengthy treatise topping the joys of cooking up a plan. If you
dont believe in planning, youre probably beyond saving. Instead, join me as we
spend some time talking about how to turn that plan into results the execution
stuff.
To make this discussion real, well come back to one very commonly discussed plan.
Remember this article is not about planning. Its about make the plan work. Six
steps to success? Well there are other factors, but these six ideas will stack the
deck in your favor.
This doesnt mean one person has to do all of the work most of the time this is
impossible. But a single individual must be held accountable for pushing the plan
forward. Additionally, the power, judgment and authority to make the plan work
need to abide with this person. Judgment is critical - if this individual lacks the
acumen to tweak the plan in accordance with changing business landscape, disaster
could result.
With pricing plans, we need a single person at the helm. They must understand
selling dynamics, pricing situations and customer needs and possess the judgment
factor we spoke of in the last paragraph. The prestige and authority to stand up to
the sales person pushback are a must have. This cannot be low-level person.
Companies with ongoing success in this category appoint an executive level Pricing
Czar to assume responsibility for driving the plan. Serving as the ultimate authority
in questions regarding margin and price, this person carries the full authority of the
leadership team to solve disputes and handle pushback. His/her ruling is final.
In a pricing plan the most obvious indicator is gross margin. External forces like
fluctuations in season, the economy and trends in commodity prices (copper, steel,
oil, etc.) push us to look for additional measures - metrics lying just below the
surface. Information such as pricing exceptions, salesperson compliance to system
pricing and margin shifts in product lines have proven to be more valuable in
tracking progress.
Quite frankly, these are time consuming and difficult for the average company to
sort out. In the world of pricing process, a few thought leaders have emerged.
David Bauders and his Strategic Pricing Associates have built complex software
algorithms to automate the metrics with a number of reports which inform the
manager on the speed and direction of change. Truly successful companies insist
on this type of regular feedback.
Step 3 If issues develop, understand the root causes and make adjustments
Its not enough to know the plan isnt working. Weve got to get to the root cause of
the issues. This can be derived by asking Why, how, what? Lets face it every
plan comes with unexpected issues. Unanticipated conditions are part of the
business environment markets change, competitors react, suppliers fail to deliver
and new technologies affect the playing field. Rather than lamenting failure or
worse yet sticking with a bad plan, we must search for the root causes of the issues.
Making wise adjustments to the plan is crucial to long term success.
Jumping back to the real world and a pricing plan many companies find they
struggle to meet the initial goals of their plan. On the surface, a person might just
assume the competitive nature of our business prohibits implementation.
However, deeper drilling may uncover a host of root cause issues. Here is a short
list:
Change is difficult and threatens the experienced more than the novice. Its not
uncommon for a long-term team member to oppose some aspect of the plan.
Except in the most blatant of cases this manifests itself with half-hearted or delayed
activities. For instance, they may sheepishly try the plan once and announce
failure. This is incredibly frustrating and damaging to morale particularly in selling
situations.
In research for a new book The Target Driven Sales Process, we discovered a
number of businesses who could not determine whether product introductions failed
because of product design flaws or due to poorly executed product launches. A
good many of these managers noted successful salespeople who were
conspicuously lacking in their ability to launch any product that falls outside the
mainstream offering.
The Pricing Czar is provided with a report measuring compliance to the pricing
strategy by division, sales group, territorial branch, product line and sales person.
The report indicates not only those not expanding the pricing process but delivers
what if numbers - showing potential assuming various levels of compliance.
Switching back to our pricing plans we find top-flight companies have well
developed educational plans in place. The very best actually launch the instruction
well ahead of any other piece of their plan.
Understanding the pot holes on the road to executing your plan eliminates a great
deal of frustration and save countless hours spent reinventing the wheel.
Finally a conclusion
Whether we are just launching out with a new plan or mid-way through a rough and
rocky implementation, following these six steps will maximize our success. Finally,
remember even the best of plans must be tweaked along the way think
implementation, adaptation, implementation.
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by Joel A. Rose
partners of a law firm want to be, and the process to be followed to achieve these
objectives.
The plan should include a clear resolution of important contradictions among and
between partners, and address such items as:
Properly conceived and implemented, the strategic planning process, and its results
will foster communication, provide partner input, and create a sense of ownership
and common direction that will bind the firm, and help it withstand adversity, and to
achieve longevity, and success. It builds "emotional and financial equity" among
partners, as opposed to only financial equity.
Strategic planning allows firms to re-focus on team work and investment in the longrun, even though this investment can reduce short-run profit. The glue that holds
the law firm together, never has been and never will be partner income. Instead, it
is composed of the values and beliefs about client service held and followed by
everyone in the firm, a clear and concise mission and direction, and goals that
partners and employees understand and to which each partner is committed.
Lawyer managers in the better managed and more financially and professionally
successful law firms recognize that their firms cannot build a long-term continuous
stream of business in one year. No organization is static. Both internal and external
forces change law firms. The following examples illustrate this point: Internal: The
successful and profitable firm that fails to plan for the replacement of business
generated by retiring rainmakers; External: The current recession, especially in
transactional work, i.e., Mergers and Acquisitions, etc.
Law firms must grow (however defined) to improve position and retain viability: An
important goal of long-range planning is to assure, as much as possible, that
partner income will continue to rise at a pace equal to or better than the rate of
inflation. But, growth must be managed so that success does not crush the
organization. Strategic planning does not necessarily mean - how do we grow
bigger? That may not be what is right for the firm, i.e., Brobeck, Phlager, since
continuous issues affecting a law firm may change with growth.
Law firm managers must be committed to planning and execution. Without that
commitment, no strategic plan will be successful. One of the crucial decisions that
must be made in the planning process is whether to take a top-down approach or
give more authority to various practice area and have them develop their strategic
plans with the firms plan being the cumulative input from all of the various
departments and offices.
The Managing Partner and Executive or Management Committee must set the tone
and methodology of communication, inclusion, efficacy and input by all partners.
They must review lessons of the past, lest mistakes of the past be repeated and
decide on the result of the Strategic Planning Process, even if the goal is as simple
as getting all partners together for a weekend Retreat for fun and interaction that
reminds them why they are practicing law together.
The Department Heads and Practice Group Leaders provide the ultimate "sanity
check" for the Managing Partner and Management Committee, i.e., are their broad
goals and desired results realistic and achievable given the expertise, personnel,
personalities and level of business in the firm? Further, they should offer more
precise goal definition given their front line responsibility for, and knowledge of, the
firm's practice and practicing lawyers.
Before the Retreat or Strategic Planning meetings, interview or survey all partners
on the critical issues defined by the Executive Committee and Department Heads.
Interviews or Surveys are best conducted by an independent, experienced law firm
management consultant. Partners are more likely to "open up" to outside
consultants during confidential interviews. Such interviews can advise the creation
of an appropriate survey to propel the planning process into the directions that the
partners of the firm consider advisable.
In larger and mid-sized law firms, interviews should be followed up with a survey to
confirm the definition of critical issues and establish reportable and understandable
data that will move the Retreat or Strategic Planning meeting into the desired
direction in advance of those meetings. Moreover, interviews and surveys will
eliminate or minimize wasteful pontificating at the Retreat or Strategic Planning
meeting, and will focus the firm on the key issues for discussion and action.
Partners must reach a consensus about the firm's (1) Culture; (2) Governance and
Management for policy determination and implementation; (3) Compensation
System; (4) Competitive Position; and (5) Plan of Attack, and each group's and each
individual's role in the implementation effort.
1. Culture: Partners must define what is the firm now and what they want the firm to
be within the next three to five years. They must assess those broad wealth, life,
liberty and the pursuit of happiness issues.
2. Governance and Management: Partners must define how their firm is managed
and how it should be managed. To achieve this consensus partners must determine
what form of management best fits its culture, and will best achieve the partners'
goals as in and through the strategic planning process. Also, they must agree upon
their expectations of the various roles that law firm leaders will play and how their
contributions will be measured.
3. Compensation: Partners must define the current compensation system and reach
a consensus about whether it (a) reflects the defined culture and goals of the firm,
(b) motivates and incentivizes partners to buy-in and to play their roles after the
planning sessions, (c) will achieve group and personal reinforcement of expected
behaviors, (d) will reward successful participation in implementing the firm's
strategic plan and (e) will achieve results.
The plan must stress the importance of identifying core competencies in strategic
planning. The more financially and professionally successful law firms have
benefitted from the thoughtful and careful positioning of their firms in their
marketplace. While firm's success may resulted initially from the energy, skill and
reputations of the partners, at some point the firm should establish an identity
which transcends the partners and attracts clients because of the firms special
capabilities.
examination of revenue at the firm level. Fees for the past several years should be
collected, and arranged in the following ways:
The foregoing are primarily financial questions, and define the firm's financial
situation. The following quantitative issues are positioning questions:
Is the firm offering a full bundle of services to its clients, or just particular services?
What are the firm's trends in regards to profitability? Billing rates? Realization rates?
Are the firm clients sophisticated regarding the delivery of legal services?
What has the client turnover been in the last three years? Why have clients left?
How does the firm obtain new work? Are those methods likely to be successful in
the future?
How does the firm's breadth and depth of expertise compare to its perceived
competitors?
By assessing these attributes, the firm can determine its competitive position and
determine where it has a competitive advantage, in which industries that it is most
likely to obtain business, and in which geographic areas and what services the firm
must offer. Most important, the firm will learn whether it is capable of offering the
bundle of services needed to address its target market.
Consistent with the definitions of culture, compensation and governance, and with
established goals, the plan must:
Establish objective and measurable standards against which the firm can measure
its progress and in interim and "final" basis.
Identify trends.
Targets:
-Real estate marketplace, professionals in the market, banks and business owners.
-Cost recovery plaintiffs with insurance policies.
Goals:
-Get six new clients in these fields within six months.
-Increase billable hours associated with insurance cost recovery actions by 10%
over last fiscal year.
A.
Objective: Seek to capitalize on client-service strengths and eliminate clientservice weaknesses.
Tactic: Strengthen "O defect" call back program wherein all calls are returned as
soon as possible but in no event after one business day.
Tactic: Initiate "O defect" client response program pursuant to which all client
concerns are addressed within one business day.
Strategy: Annually develop a list of clients that will be included in the Key Client
Program.
Tactic: Differentiate the way the firm provides services to corporate counsel by
promoting the Key Client Program.
For each key client, assign a Relationship Principal (Account Executive) and initiate
the following partnering concepts which are appropriate to each identified key
client.
Joint matter staffing;
Joint training/CLE;
Seminars and reverse seminars (repeat periodically);
Technology integration such as e-mail, voicemail, case management, research
resources, access to time/billing systems for their accounts;
An annual plan of services to be provided (free of charge);
Voluntary case/matter budgets to enable better projection of legal costs by the
client;
Rent-a-lawyer programs for finite client needs on a cost plus basis;
Alternative pricing;
Swap programs (trading lawyers, then trading back).
Develop a long-term institutionalized relationship with corporate legal departments
by including the firm's associates in the key client program.
Prepare and distribute written description of the key client program as a supplement
to the firm's marketing brochure and proposals.
Strategy: Identify those aspects of the practice for which traditional trial skills are
vital and develop opportunities for lawyers to hone those skills.
Tactic: Identify attorneys who are best suited by talent and inclination to serve as
trial lawyers.
Tactic: Train those attorneys in traditional trial skills by providing opportunities to try
cases through trial academy, pro bono work, mock trails and other training vehicles.
Tactic: Give those attorneys opportunities to work either directly or on a shared
basis in substantive areas and on teams where work which leads to trials is more
prevalent.
Strategic Plan Implementation
The strategic planning process requires the full and complete support of lawyer
management at the highest levels. Below the firm level, firms increasingly are using
plans at the practice group, departmental, and individual levels. It is clear that
overall direction must come from the top - this is the long-term strategic plan. The
implementation of plans, at the department, practice group, and individual levels,
drive toward short and long-range goals that lead to achievement of the long range
strategic plan targets.
A critical role in the implementation process calls for firm management to define, for
each partner and group (a) Their role in the large firm picture, (b) What each
partner promises to do, and (c)(And later) An assessment what each partner and
practice group has done to implement the strategic plan. As an integral part of the
implementation process, the author recommends that the firm's lawyer
management conduct a quarterly review of the plan's implementation and that
ultimate accountability be enacted through the compensation system.
Implementation of the strategic plan requires the same priority as client work,
continuing reminders of the firm's culture and expectation, follow-up, reinforcement,
publicity - internal and external - for efforts and especially results, measurement of
results and an assessment of goal achievement at various stages, i.e., are we
getting it done? If not, mid-course corrections. Finally, the system must offer
appropriate rewards to those who successfully comply with the strategic planning
process
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