Ok – you know the end result but do you have a plan to get there?
Or will you board the first plane on the tarmac and end up in the last place you want to be?
As another year rolls by and it is time to get those tax returns in again, ask yourself the question “Is an annual financial plan enough to shape prosperity for my law firm?”
Is this time for another round of guesswork budgeting, wondering ‘Can the hourly rates can be raised this year?’, ‘Will we meet our targets?’, ‘What should we do about debtors and WIP that don’t budge?’, and ‘Can I survive another year of long hours for little return?’
Perhaps the real question for partners is ‘Are these actually the right questions to be asking if you want your firm to be more prosperous, and your income healthier?’ In today’s environment large budgets are getting harder to achieve with a traditional approach to practice. There is survey evidence which shows that low profit firms actually record more billable time than the high profit firms. In other words, the fee-earners in low profit firms worked harder for less return.
The traditional ways of practising are beginning to crumble around the edges, especially for those firms that have changed little in the last decade or so. If law firms don’t have a plan that helps them to anticipate, adapt, evolve and adjust to changes in the environment around them then declining profitability may be inevitable.
FACING 21ST CENTURY REALITIES
The environment in which lawyers operate has changed for good. There is a complex maelstrom of reasons that make a worthwhile return on investment harder to come by.
Changing demographics, multi-cultural societies, enormous technological advances, legislative reforms, the new generation of lawyers with their different career expectations, changes in client needs, and the glut of baby boomer partners without clear succession plans are just some of the factors having a significant impact on the complexity of practising law today. Innovative firms with a plan for success stand a better chance of prosperity than those who react to challenges by burying their heads in the sand.
SECRETS OF SUCCESS – THE GOOD NEWS
Despite a changing landscape, surveys that gather data annually from small to mid-size firms show that some have been pulling away from the pack. The successful ones are doing much more than taking a ‘business as usual’ approach to their practices. Whether they are doing that alone or with help from external experts, they are using strategic thinking, innovation and leadership skills to shape their firms. They are recognising the value of adapting 21st century mainstream business thinking for professional practice.
THE FIRST SECRET
The first Secret of Success is to acknowledge and accept that if you are a law firm partner then you are in fact a proprietor, a business owner. Times have changed, and in the current climate being a good lawyer alone is not enough to ensure prosperity. Being a proprietor is a completely different role from being a lawyer. It requires different skills, a different mind-set and a different approach to building and running your legal practice. It requires owners/partners to show the courage and commitment of Leadership. This may be daunting for some partners, but it is also interesting and exciting for those who want a new challenge and to see the positive results unfold in their firms. Thinking and acting like an owner/director as well as a lawyer is the first step in building your firm’s Prosperity Plan.
SO WHAT CAN YOU DO WHEN YOU DON’T KNOW WHERE TO START?
Professional Edge can guide you and your firm through The Secrets of Success. You will learn to think and act like a business owner. You will develop a Prosperity Plan for your own firm. You will take control of your future.
As one provincial partner recently said to me about getting on the road to greater prosperity and success: “There are no easy solutions - only a requirement that partners and staff have an openness to change even if it challenges what we have always done.”