Strategic Planning and Continuous Improvement: Charting a Course to Law Firm Excellence

Looking to improve your law firm's performance but struggling to find time for a complicated planning and continuous improvement process?

This dilemma is a common one for many law firm managers and partners. This is why we suggest a streamlined process that includes four phases.  We also recommend a process that considers beyond the immediate year and visualizes the next 1,3, 5, and 10 years out.  

 Additionally, we advise firms to consider bringing in an external project manager with law firm-specific experience to steer them through this journey. These experts can help the process continually advance and provide accountability, impartiality, technical advice, and a fresh perspective. 

Our recommended process is comprised of the four phases listed and described below: 

1. Organization

We recommend initiating a kickoff meeting aimed at several key objectives to kick off the process. First, it's an opportunity to define process goals, reach consensus on expectations, review and accept a timeline, and identify the project managers and optimization team. For instance, one of the process goals could include developing a comprehensive strategy map that outlines roles, responsibilities, milestones, and task lists by the end of the year. A plan goal might involve positioning the firm to leverage cost model improvements, yielding a 5% margin boost with 12 months of implementation.

Typically, this meeting is organized and managed by the project manager/strategy consultant. While an in-house team member can assume this role, it's important to acknowledge that time constraints and training demands can impact their effectiveness. Identifying each participant's roles, responsibilities, and time expectations is also essential. To ensure effective communication throughout the process, it's imperative to establish a communication protocol and schedule regular check-in calls and milestone assessments. These projects are most effective when adhering to a well-defined schedule.

Regarding tools, we recommend utilizing a project management application such as Teamwork, which we employ for streamlined organization and collaboration.

2.  Discovery

In this phase, the primary objective is to collect and analyze essential data about your law firm's economic and operational performance. For example, you'll need information such as timekeeper reports, employee statistics, financial statements, operational details related to file management practices, and client and case staffing information. Additionally, conducting surveys on operations and strategy is necessary to gain insight into everyone's goals and expectations. 

Law firms often struggle with access to clean and reliable data. Process disruptions can occur when obtaining the necessary information becomes a hurdle. When this happens, working with experienced law firm modelers and analysts can make a huge difference. In our work for clients, we address this challenge by developing tools and procedures to extract meaningful insights even from incomplete data sets. Once we secure the best available data, we can initiate the assessment and analysis phase.

3.  Assessment/Analysis 

A significant portion of this phase of the process revolves around what to analyze and to what end. Templates, benchmarks, and key performance indicators (KPIs) greatly improve this process. If you choose to tackle this on your own, you'll need to seek guidance and available comparative benchmarks and KPIs. It's often said that a picture is worth a thousand words, and having updated and relevant market knowledge can make the difference between a good or bad decision. 

In our experience, most law firms believe they are unique, but their uniqueness often lies in their people, while their system and process needs tend to be similar. Therefore, all law firms can derive benefits from best practices.

Once you grasp the information requirements for this process, you can design your analysis to provide insights into your firm's performance. For instance, we suggest you analyze the foundational components that include the firm's financial health and financial reporting capabilities, along with the firm’s operational functions, such as file management, marketing, accounting, billing, collections, administrative management, HR, and employee performance.

Additionally, we recommend conducting follow-up interviews to identify key strategic factors, trends, strengths, and challenges that may influence your firm's performance.

4.  Strategic Mapping:

Achieving success hinges on clarifying your organization's vision, mission, values, and expectations. Many may be tempted to skip this phase, dismissing these statements as mere platitudes that no one remembers five minutes after they are written.  We disagree.  Consider this step as establishing the rules of the road. Yes, economic success may be the goal, but defining how you will attain it is equally critical. Without a well-defined mission, vision, and set of values, expectations can run wild and become unattainable. People quickly lose interest in the process and start creating their own, often competing, visions.

Executing the Plan and Tracking Progress

Earlier, we mentioned using a project management application, and while not absolutely necessary, can significantly enhance the success of plan execution. Turning critical actions into actual tasks with assigned owners and due dates can quickly overwhelm people's to-do lists. These applications encompass essential features that help maintain the necessary focus during the implementation phase. In our experience, many law firms encounter challenges early in the execution of the plan that cause their strategic plans to fall apart.

Our recommended approach ensures that your actions align with your strategic objectives and allows you to track your progress using critical financial and operational metrics.

Ongoing Adjustments

At some point, all plans require adjustment. Accomplishing this will require a tailored financial and operational model that aligns with your firm's goals and expectations. Once perfected, this model can offer insights into management systems, processes, financial performance, and operational outcomes, indicating when plan adjustments and refinements are needed. It is important to remember that this is a continuous improvement process designed to optimize performance and that plan modifications are routine.

FINAL NOTE

While this is a lot of work, effective management and the right tools can significantly simplify the journey. If you find that your firm does not have the time, skillsets, or information to run an effective process, consider getting some outside help. 

Also, it is crucial for firms to think beyond the immediate year and envision the next 1, 3, 5, and 10 years out. Many law firms focus on the current year without considering how well they can compete over longer durations. This narrow focus can lead young, talented lawyers to leave private practice for in-house positions because they perceive a lack of long-term opportunities in their firm. When a law firm is guided by a compelling and lucid vision for the future, it communicates to its attorneys and clients that remaining with the firm can be a rewarding and prosperous decision.