The perfect legal business? (first published on Legal Futures)
by Simon McCrum
Simon McCrum offers his top ten tips on running and growing the perfect legal business in an article that was first published on Legal Futures.
Some people think it is easy to run – and to grow – a law firm. I feel like I have had a lifetime in lawyer and team management and in law firm ownership and leadership.
Taking all of that experience (of things done right and wrong), add the experience gained from working with a host of law firms since I left private practice, and harnessing the clarity of thought I now enjoy that few managing partners could dream of whilst in the hot seat, I believe I can point to at least 10 pieces of jigsaw that a firm needs to come together – over and above efficient IT and a solid compliance and risk-management framework – to make up the perfect foundations for a high-performance legal business.
All 10 need to be joined up and everyone needs to be engaged in them. How does your firm fare when looking at what I call the ‘Foundations for your Future’?
- A clear vision as to where you are going, why you are going there, what your values are, and what your internal and external differentiators are – the easier to articulate, the better. This is the framework from which all rules, behaviours, and decisions flow
- A group of people (both legal and business support staff) who work together as a team, where team interests trump personal or local preferences. No behaviours within that group that are un-team like. No one is above the law. There should be zero tolerance of well-poisoners at any level.
- Have only good people in your team– technically good, and positive in attitude. People need to know that their colleagues are as good as them. You also need somewhere for you good people to go – a transparent career ladder and ongoing people development.
- Leadership– whether that be one individual, or a board, or the owners. What is effective as leadership is focus, communication, leading by example, respect, integrity and honesty.
- Middle management– Lawyers individually and the firm as a whole benefit from having parts of the business closely managed. Team leaders that are effective are vital and can make a real difference, and quickly, when they are effectively managing directors of their teams, charged with increasing the gross margin they deliver to the centre.
- Team structures that are designed for pricing, profit, and service. Senior lawyers can command higher rates if they can demonstrate that cheaper work is done by cheaper lawyers. No live files are put into storage (on the end of a desk – or under it)
- An ‘exacting’ engagement with clients instead of an ‘easy’ one where: (a) you charge a proper price for a good job and don’t compete on price.
It is easy to justify to most clients and callers why they should use you instead of a cheaper firm; (b) that price relates to a limited retainer – further work will be charged for in addition; and (c) if the client doesn’t pay on time, you’ll sack and sue.
- A commitment to delivering a great service – every lawyer every time.A firm-wide service pledge where every client stays with you (even though you are a bit pricey) because you are good every time they touch you, and where every lawyer in your firm knows how every other lawyer will look after clients.
Clients pay quickly as they know they’ll be sacked if they don’t, and they don’t want to lose the great service they always get from your firm
- Maximum money is made on each case– all files are worked on, all time is recorded, and all recorded time is billed. There is minimal self-editing. Extra work is charged for.
- Priority is given to developing your relationship with existing clients, in place of forever trying to win new clients. A commitment to getting to matter 007 for every client trumps trying to win new matter 001s, which you can easily get by quoting low prices.
This 007 journey begins at client take-on and has to be centralised – lawyers are too busy to do it properly. The journey to 007 is speeded up by a pro-active ‘culture of care’ where clients are brought onto a platform, at a price, where their risk and exposure is reduced.
Pulling all of this together, you can see the reasons why I work with firms to help them nurture cultures of care, colleagues, and cash, so that everyone works together, going the extra mile for clients, but in a way that delivers profit and cash for the business.
I can say from experience at my old firm and at others that it is easy to get some of these aspects right all of the time and all of them right some of the time, but very hard to get them all right all of the time.
It therefore becomes a question of ongoing focus and discipline – and an ability to say ‘no’ to the many glittering opportunities that continually seem to pop up!
by Simon McCrum