Building for the future Peter Scott PETER SCOTT CONSULTING

Where are we now? The economy Legal Services Act implications Greater regulation and compliance PI insurers’ attitudes Technology Client needs are changing Greater need for resource A fragmented profession A need to become more competitive

The need to be more competitive “Competition is a process by which … services that people are not prepared to pay for, high cost methods of production and inefficient organisations are weeded out and opportunity is given for new…services methods and organisations to be tried” * Could this apply to the legal profession today? * Everyman’s Dictionary of Economics

The greatest danger? - complacency! “Our strategy is to keep a lid on expenditure and weather the storm. We cannot reinvent ourselves as something we are not” Managing Partner of a major London law firm – Autumn 2008

An alternative view… “there seems to be a disturbing strategy of hunkering down, cutting some fat and hoping that business will return to normal. That is not good. The terrain will look very different when this is over. This is not a minor blip, but a discontinuity” “the problem is that most senior lawyers think only two months ahead. They have no coherent picture of the future. The planning is not being done. And it is senior lawyers who need to be driving change” Professor Richard Susskind – May 2009

Forward planning - focus on the fundamentals The kind of firm you want to be Your clients Your people How you can achieve your goals

Where are you now? What are the most important lessons you have learnt from this recession? Which of those lessons will you use to build success for the future?

There may never be a better time to face up to your sacred cows

ENTER ZONE OF UNCOMFORTABLE DEBATE MAKE DECISIONS FACE UP TO REALITY FOCUS ON BIG ISSUES MAKE IT HAPPEN Strategy is a continuous journey…

is a process of finding out: What your (current and prospective) clients value What your partners value Identify key skills and behaviours which enable the consistent delivery of your value proposition Developing a strategic vision in a partnership …

Your clients

Core issue to add value More than the competitors In a way which is regarded as valuable by clients Needs to be value clients care about - clients’ perspective - not yours

What do client’s want? “They always try to sell to us on price – but what we really want is to have a good job done at a reasonable price” Client feedback from a perception survey commissioned by a law firm

You will add value that clients care about if… You provide clients with what they need – and more At prices they perceive to be value for money; and You do this better than the competition

Position your firm to provide value for money Client Perceived Added Value Client Perceived Cost Bowman and Faulkner 1994 Long Range Planning High Low Ave X Suicide Zone

How can you find out what clients need? Ask them Commission a survey of clients and referrers Do your clients say you are adding value?

Your people

Your people / your values? What is valued in your firm? Do you reward what you value? Do you invest in what you value? What does it take to succeed at your firm?

Is this a block on developing your business? “The only thing this firm values is personal billing!”

Are some of your people holding you back? Are you presently unable to add value to your clients because of: internal attitudes and behaviour? Lack of skills?

How to achieve your goals?

You have developed a realistic plan, but… this will require RESOURCE - resource which many individual firms cannot realistically and at an economic and acceptable cost provide themselves

It is a fast changing world and law firms need to constantly adapt The economy Legal Services Act implications Greater regulation and compliance PI insurers’ attitudes Technology Client needs are changing A fragmented profession A need to become more competitive Law firms need greater resource to be competitive

Is lack of resource making you uncompetitive? Often a lack of resource of expertise (client perception surveys will show if this is the case) Often a lack of financial resource (inability to invest in your people and in the business)

The resources to be competitive Will you have the resources on your own to achieve your goals? If not, then merger may need to be considered

How can merger help to provide us with the necessary resource? NB – merger is not a panacea - often just a better platform on which to build a more competitive law firm - not about size for the sake of size

Merge for the right reasons Merger is not a strategy – it is a means to an end – to gain competitive advantage Merger can help build RESOURCE – to enable a firm to provide its clients with what they want at a price which the clients regard as ‘value for money’

The scale of a new firm may help to enable… the new firm to be developed at an acceptable economic cost to each constituent firm which the individual firms could not on their own provide

Quality Resource to enable the new firm to… Attract and retain the best talent

Quality Resource to enable the new firm to… Provide clients with the depth and breadth of expertise they now require, where and when they need it

Quality Resource to enable the new firm to… Build the quality management which will be required to successfully compete in the future

Quality Resource to enable the new firm to… Provide the necessary infrastructure to underpin the effective provision of high quality professional services demanded by clients

A Vision To build a BRAND which can begin to compete with larger, more developed firms for better quality, higher value work leading to greater competitiveness and profitability

Is this a Vision you share?

Any questions?