Like many other businesses, law firms are frequently afflicted by SPOTS: Strategic Plans On The Shelf.
The process is wearyingly familiar. Mindful of the Cheshire Cat’s observation that “if you don’t know where you’re going, any road will get you there”, a firm’s leaders resolve to develop a strategic plan. Its senior people gather in solemn conclave. Sub-committees are formed. Papers are written. Lots of them. They are earnestly considered at an off-site with terrible coffee in the middle of nowhere, “to encourage fresh thinking.” Conclusions are reached, such as, “Our objective is to grow our turnover by 30% over the next three years”, which is a hope, not a strategy. Decisions which truly are strategic (such as, “our future lies in specialisation, not being full service”) but will have real consequences for people we like, or are frightened to confront, are avoided. Finally, a tome charting the path to world domination is circulated firm-wide, accompanied by a “motivational” message from the current Top Banana. Lip service is paid to it for a decent interval, before it is filed under “O” for “Oblivion”, and never seen again. Things continue much as before. Three years later, the process is repeated.
You think this a caricature? Maybe. Our best law firms, by definition, do strategy very well, but many more fail, because to them strategy implies daunting complexity, they are unclear about what is strategic, as opposed to managerial or administrative, and their first priority is to avoid risk, which is impossible.
The concept of business strategy derives from military strategy, and the first task of the military is to identify the fundamentals. When Col. Bob Stewart was given command of UN forces in Bosnia, he set out his entire strategy on one side of a small sheet of paper. He asked three questions: What needs to be achieved? (His answer: “to save lives”). What steps are crucial to that? What resources/constraints apply? His implacable focus on the answers to these questions throughout the conflict was crucial to his success.
In business, where “what needs to be achieved” by strategic choices is a direction of travel which leads to competitive advantage, these questions become:
1. Which markets do we wish to serve (or avoid)?
2. In these markets, how do we stand out? It is worth bearing in mind here that unless you are engaged in work which is especially esoteric, knowledge of the law is unlikely to be a differentiator. Clients, fickle creatures that they are, take your hard-earned knowledge for granted.
3. What resources/constraints apply?
As I mentioned, though many see eliminating risk as a top priority, risk-free strategy is an oxymoron. Strategy is always a bet. Costs are a matter for firms, but revenue is up to the clients, and firms cannot control their choices. Risk is ever-present, something lawyers find it hard to live with. The typical lawyer is highly intelligent, but tends to be cautious, suspicious, analytical to a fault and terrified of personal failure. These qualities make great advisers, but poor entrepreneurs. They explain why so many of us struggle not with doing the work, but winning it. As the Nobel laureate behavioural economist Daniel Kahneman put it, “Courage is willingness to take the risk once you know the odds.” Be as well informed as you can. Deliberate carefully. Take the time and advice you need. But ultimately, embrace the fact that there is risk, the best you can do is minimise it, and have the courage to press on.
One should never forget that strategy and management are not the same, though they are often confused. I have lost count of the number of strategy meetings I have attended which have been sidetracked into considering whether the firm should take additional space, how many new trainees it needs, whether it should change its IT contractor, how a team is going to cope with maternity leave, and so on, and so on. All of this may be important, but it has nothing to do with strategy. As 99% of a strategy’s success is dependent on implementing it well, effective management is essential, and may involve a mountain of detail. But all of it is a means of achieving strategic objectives, not the strategy itself.
Finally, brevity is the soul of more than wit. It is a truth not universally acknowledged, but illustrated dramatically by Bob Stewart, that if the fundamentals of a firm’s strategy cannot be articulated in a few concise sentences, it is probably not any good - something worth remembering the next time you dust off the most recent strategic plan, form sub-committees, and begin once more the quest for the Promised Land.
Stephen Gold is a solicitor and consultant to law firms.
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