We are now well into 2015, an election year which means five months of promises, continued low interest rates and increased investment in capital projects. This feel good factor cannot last much beyond the election and whoever wins is facing a huge economic national debt that will need to be addressed. It is therefore essential in these “false dawn” times that we actively make New Year’s resolutions and follow them through. Below are a summary of the points I have made during 2014 and I would urge you to embrace these as your New Year resolutions.
1. Plan your Future
I have seen more firms in the last six months decide that they need to engage and establish what is their strategy for the future than in the last 6 years. This is because additional revenues have given both the headroom and confidence to begin the inevitable process of change. Make it your resolution to arrange a meeting with your fellow partners/colleagues to decide what sort of firm you want to be in five years’ time – do you retain your independence; consider being acquired or merge with another firm?
2. Change your Corporate Governance
The Chancellor in the autumn statement has taken away the opportunity for goodwill transfers into limited company structures but this should not stop you making a resolution to examine the advantages of converting your partnership or LLP into a limited company. Succession and exit planning, outside investment plus the added opportunity to run your business properly should be the catalyst to encourage you to consider a corporate structure.
3. Cash Management
Resolve to change your terms and conditions and begin to educate clients that you need either cash in the client account or your invoices to be paid within seven days. Lock up has to be reduced to give you the headroom to invest in your business.
4. Deal with under-performing Partners and staff
Jim Collins in his book “From Good to Great” refers to businesses that accept mediocrity as the norm never becoming great. How many of you truly manage performance in your teams? Accepting underperformance in partners and fee earners will mean you will never be successful. Make it your resolution to address this fundamental issue with your colleagues – people make your business work but if you don’t have the right people in the right seats your business will continue as it is. In the changing world of the legal services market mediocrity is not acceptable – deal with it!
5. Invest in Technology
It doesn’t need to be an expensive capital expenditure item; by utilising hosted private platforms and cloud technology on a pay as you use basis you can embrace technology. Failure to recognise technology is the key to many a law firm’s future and could result in your firm being left behind. Not only does it make your more efficient but will reduce staff costs and overheads. Yes there will be occasions when clients will pay a premium for the “grey matter” but will that be by exception or will it become your only income stream? If you are to compete with others then your only option is utilising and embracing technology for the vast majority of your work.
6. Find your Niche
What makes you different from your competitors? What will encourage clients and customers to return and how will you win and convert new business? If you fail to embrace social media and other forms of specialist marketing your firm will fall behind those firms that do – make it a resolution to identify what specialisms you have and learn to exploit them.
7. Becoming more accessible
Your clients do not all purchase legal services when you choose – they want access to their solicitor when they choose not when you decide. Outsource your telephony to make you more accessible and be available 8am to 8pm six days a week. You don’t have to be sitting in the office for that time but have calls patched through to your mobile – converting one new matter per month will more than pay for this service.
8. Lean Management
Investigate how much of your back office could be outsourced – don’t get tied up in traditional thinking regarding dictation, telephony and IT. Most of the non-critical but essential aspects of running a law firm can be outsourced on contracts that are flexible and can be turned up or down as required.
9. Converting Business
Sales is not a dirty word and your resolution should be to train some if not all of your staff in converting new business and cross selling. If your fellow partners, fee earners and support staff are incapable then replace them with people that are capable! You can outsource this function as many forward thinking firms are doing both for inbound call handling and to dedicated teams of business development specialists. It’s hard enough in this market to even be considered to provide a quote therefore ensuring you convert these calls into new instructions is an essential part of your future.
10. Resolve to do something!
2015 could well be the year we see some of the Zombie businesses fail: Doing nothing should not be an option and making a resolution to do at least one of the above should start your firm thinking about future strategy. I have been receiving at least one call per week in the last six months from firms that have decided that now is the time to change. If you don’t it might well be too late.
First published in Solicitors Journal