In this blog, Graham Le Roux, Principal of Constantia Management Group (www.constantiamanagementgroup.com) outlines strategies for law firms in lean times. Graham outlines 7 action areas and a list of top 10 action items to implement the outlined strategies.
Strategies in lean times
The question facing law firm owners, managers and administrators is ‘What can be done?” We have compiled a list of seven issues facing firms and we pose some strategies:
Review working capital – debtors, WIP and unbilled disbursements.
Liquidate your debt.
Renegotiate the terms of loans.
Refine Credit Control policies, procedures and practices.
Review all Trust Accounts.
• Pareto analysis of effort and return for each client.
• Review value and profitability of clients. Consider client retention strategies.
• Review sustainability of markets currently serviced.
• Review sustainability of products delivered.
• Review currency of all documents held in safe custody for clients.
• Review all costs and contracts.
• Re-negotiate terms and conditions with suppliers.
• Sub lease any Assets which cannot be fully utilised.
• Share resources with similar firms/businesses.
• Form alliances with other law firms and businesses.
• Consider outsourcing support services.
• Establish and review Practice Group/Area of law Profitability.
• Review the need for all staff.
• Offer redundancy to excess staff.
• Identify those staff who are “rusted on” and no longer performing.
• Promote key personnel – encourage non productive staff to leave.
• Sub contract staff in or out.
• Second underutilised staff to other businesses.
• Review pay structures.
• Review work allocation.
• Implement succession and exit strategies.
Policies and procedures
• Review all policies and procedures from the ground up.
• Review all policies which inhibit optimum performance.
• Review all support services and the need to retain them.
• Review all management services and speed up management information channels.
• Review Vision and Mission.
• Can a layer of leadership be eliminated?
• Review all legacies, white elephants and royal game.
• Review Structure of the practice – number of partners, number of solicitors and number of staff.
Take extraordinary steps to protect your values and culture.
Is now the time to acquire new areas of law.
Invest in Research and development.
Consider re- tooling and reinventing what type of law firm you will be.
Top 10 actions
1. Act now on cash flow maximisation, WIP, Debtors, Disbursements and Trust accounts.
2. Action a client review – Pareto analysis and profitability.
3. Act now on Costs/expenses and supplier contracts.
4. Review all staff, pay structures and work allocation.
5. Review Mission, Vision and Values.
6. Review service offerings and practice groups.
7. Review policies and procedures.
8. Review management and processes.
9. Defend culture and values.
10. Contact us for assistance.