driving profitable growth for your firm€¦ · law firm failures below average financial...

Phil Gott

www.peopleism.co.uk

Robin Dicks

www.thrivingcompany.co.uk

LawNet Practice Management 16 October

Robin Dicks, The Thriving Company

Phil Gott, Peopleism

Driving profitable growth

for your firm

Phil Gott

www.peopleism.co.uk

Robin Dicks


Our work with law firms

Phil Gott

www.peopleism.co.uk

Robin Dicks


Agenda

• What drives the ongoing financial success of your firm?

• What key elements build profit per partner?

• Measuring success

• Introducing the PEP diagnostic

• Growing billings and managing costs – a chance to review your current capability

• Management information that will help drive improvement

• How do successful firms manage performance?

• What third party investors or partners may look for

Phil Gott

www.peopleism.co.uk

Robin Dicks


Gaining the value from this session

Phil Gott

www.peopleism.co.uk

Robin Dicks


Law firm failures

Below average financial performance – often including excessive borrowing, significant deferred obligations, low productivity, and poor profitability and housekeeping; Internal dynamics – primarily involving leadership issues, partners with incompatible goals, differences over profit share philosophy, and lack of succession planning; and External dynamics – primarily involving competitive pressures related to the firm’s historical client base, access to new clients and desirable work, and inability to recruit key talent.

Source: Hildebrandt

Phil Gott

www.peopleism.co.uk

Robin Dicks


Prospects

and

pipeline Order

Book Hours

worked

WIP

WIP billed

Cash

collected

One Model of a Law Firm...

Source: Mark Feeney, The Winning Firm Alliance

Phil Gott

www.peopleism.co.uk

Robin Dicks


Law Firm Cost Structure

People Direct 50%

People Indirect 10%

Overheads fixed 26%

Overheads variable

8%

Investment 6%

% of cost

Source: Mark Feeney, The Winning Firm Alliance

Phil Gott

www.peopleism.co.uk

Robin Dicks


MPF CEO Priorities Monitor

Management teams are expected to give the greatest priority to:

• client relationships

• delivering the firm’s strategy

• process improvement

• motivation & reward

• system & processes

• profitability

Source: Managing Partner’s Forum (June 2012)

Phil Gott

www.peopleism.co.uk

Robin Dicks


How do you drive?

Phil Gott

www.peopleism.co.uk

Robin Dicks


What drives profitability?

PEP

Increased Billings

Reduced Costs

Phil Gott

www.peopleism.co.uk

Robin Dicks


Lagging indicators

• Utilisation

• Billing

• Recovery

Phil Gott

www.peopleism.co.uk

Robin Dicks


What do leading indicators do?

• Should you care about them?

Phil Gott

www.peopleism.co.uk

Robin Dicks


So...

• Financial performance

• Operational Performance

• Market performance

• Client needs

• Prospect needs

• Referrer needs

• Competitor actions

Phil Gott

www.peopleism.co.uk

Robin Dicks


Some of the problems

Growing external and marketplace

pressures

Management time & resources stretched

Phil Gott

www.peopleism.co.uk

Robin Dicks


Drivers of financial health

Increased Billings

Reduced Write-off

Improved client acquisition Improved

ability to extend relationships

Increased client value

More productive referrer relationships

Phil Gott

www.peopleism.co.uk

Robin Dicks


Drivers of financial health

Reduced Costs

Reduced sales costs

Better use of human resources

Resource management

Technologyuse

Risk Management

Phil Gott

www.peopleism.co.uk

Robin Dicks


Financial health – a closer look at billings

• Today, we will look at:

– Client value

– Ability to extend client relationships

– Ability to acquire new clients

Phil Gott

www.peopleism.co.uk

Robin Dicks


Self review

Part One – Client Value

Phil Gott

www.peopleism.co.uk

Robin Dicks


Retaining and developing clients; most important factors (recent law firm example)

14

11

10

5

5

3

3

3

3

1

1

0

0

0

0 2 4 6 8 10 12 14 16

Meeting deadlines, keeping commitments

Cumulative knowledge and expertise

Value for Money

Care and Attention given

Personable and Likeable People

Ability to Communicate Knowledge

Ability to offer Advice quickly

Accessibility and Availability of people

Keeping you informed of progress

Quality of People Overall

Rapport with Team

Billing as Expected

Interest in/Knowledge of Association/Authority

Keeping you informed on issues...

Phil Gott

www.peopleism.co.uk

Robin Dicks


“Being a good lawyer isn’t enough”

• “Our most successful relationships are with businesses who have a deep understanding of us...(who) operate as partners”

• “(I value) the over and above things...providing updates, trends seen and training sessions”

• “What would happen if in the panel process they were up against a firm who were essentially as good at claims, but better at some of the added-value things? It would reduce their risk if they were to increase their strategic input.”

• “To put the firm in the best position to win more work, build up a relationship with the people that do the work in certain areas – e.g. the HR team. They may be the ones with work to hand out, not necessarily the Chairman, MD, or myself”

Phil Gott

www.peopleism.co.uk

Robin Dicks


Self review

Part Two – Extending client relationships

Phil Gott

www.peopleism.co.uk

Robin Dicks


Self review

Part Three – Acquiring new clients

Phil Gott

www.peopleism.co.uk

Robin Dicks


Effective Management information

• Is important

• On a subject which can be influenced

• Impacts decision making

• Is measureable

• Enables the firm to respond

Phil Gott

www.peopleism.co.uk

Robin Dicks


How full are the columns?

No Commercial

Property

Company

Commercial

Emp’t Law Dispute

Resolution

Residential

Property

Private

Client

1

2

3

4

5

6

7

8

9

10

11

12

Phil Gott

www.peopleism.co.uk

Robin Dicks


Case Study – Key Performance Indicators

Before

• Fee earners divided into “transactional” and “business developers”

• Measured on number of networking plans produced

• One partner was the “policeman”

Phil Gott

www.peopleism.co.uk

Robin Dicks


Case Study – Key Performance Indicators

After

• Fee earners measured on the outcome by

– Referrals

– Client satisfaction

• Partner becomes the facilitator of skills improvement

Phil Gott

www.peopleism.co.uk

Robin Dicks


The benchmark for you

Phil Gott

www.peopleism.co.uk

Robin Dicks



PEP

Increased Billings

Reduced Costs

Phil Gott

www.peopleism.co.uk

Robin Dicks



PEP

Increased Billings

Deliver greater value, cost-effectively

Phil Gott

www.peopleism.co.uk

Robin Dicks


The healthy option The quick fix

People & Performance

Phil Gott

www.peopleism.co.uk

Robin Dicks


The healthy option The quick fix

• Attract the right people

(for the right reasons)

• Get the very best from

them

• Give them reasons to

want to stay around

• Get the best people

(by throwing money at

them)

• Squeeze every last

hour from them

• Lock them in

People & Performance

Phil Gott

www.peopleism.co.uk

Robin Dicks


26

21

21

10

4

11

2

1

29

33

25

25

7

15

2

1

0 10 20 30 40

Financial

Quality of work

More opportunity

Culture of firm

Equity sooner

Profile of firm

Personal reasons

Pushed out Number of times as 1st or 2nd reason

Total number of mentions

Why partners switch firms

Phil Gott

www.peopleism.co.uk

Robin Dicks


Maister’s “Predictive package”

• “Client satisfaction is a top priority at our firm”

• “We have no room for those who put their personal agenda ahead of the interests of the clients or the office”

• “Management gets the best work out of everybody in the office”

• “Around here you are required, not just encouraged, to learn and develop new skills”

• “People within our office always treat others with respect”

Phil Gott

www.peopleism.co.uk

Robin Dicks


Self review

Part Five – Productivity

Phil Gott

www.peopleism.co.uk

Robin Dicks


Phil Gott

www.peopleism.co.uk

Robin Dicks


“Heavyweight gorilla”

“You can’t

manage me.

I’m a big biller!”

Phil Gott

www.peopleism.co.uk

Robin Dicks


“High-flier”

“I’m so marvellous..

…so why is she an

equity partner and

I’m not?”

Phil Gott

www.peopleism.co.uk

Robin Dicks


“Individualist”

“That’s a great idea…

…for the rest of you”

Phil Gott

www.peopleism.co.uk

Robin Dicks


“Winding down”

“Ahh….

......only 5 more years to go”

Phil Gott

www.peopleism.co.uk

Robin Dicks


Self review

Part Six – Extending capability

Phil Gott

www.peopleism.co.uk

Robin Dicks


Law

Firm

Clie

nts

Law

yers

Past

The scope of talent management

Past – Present - Future

Phil Gott

www.peopleism.co.uk

Robin Dicks


Law

Firm

Clie

nts

Law

yers

Present



Phil Gott

www.peopleism.co.uk

Robin Dicks


Law

Firm

Clie

nts

Law

yers

Future



Phil Gott

www.peopleism.co.uk

Robin Dicks


Phil Gott

www.peopleism.co.uk

Robin Dicks


Self review

Part Seven – Maximising benefits from IT

Phil Gott

www.peopleism.co.uk

Robin Dicks


Phil Gott

www.peopleism.co.uk

Robin Dicks


Professional services Source: David Maister

Nurse

Psychotherapist

Pharmacist

Brain surgeon

Degree

of intimacy

Degree of skillful customisation

Phil Gott

www.peopleism.co.uk

Robin Dicks


Rela

tiv

e V

alu

e A

dd

ed

Volume of work available

Unique services

Experiential services

Commodity + services

Commodity services

Price

Sensitive

Price

Insensitive

Phil Gott

www.peopleism.co.uk

Robin Dicks


What external investors

would look for

• Profitability (£5m+ after partner earnings)

• Sustainable business model: – Volume / commoditised (but referral fees?)

– Sustainable without you and your partners

– People in the business who do not aspire to be partners

• Few equity partners, so easy to deal with

Is this your firm?

Phil Gott

www.peopleism.co.uk

Robin Dicks


“I've never seen so much opportunity as now.”

Bruce McEwan

Adam Smith Blog (Economics of law firms)

Phil Gott

www.peopleism.co.uk

Robin Dicks


Your assessment of the outlook

for the legal profession ?

Phil Gott

www.peopleism.co.uk

Robin Dicks



for the legal profession ? Happy days are here again

Phil Gott

www.peopleism.co.uk

Robin Dicks




This is not the end…. the

end of the beginning

Phil Gott

www.peopleism.co.uk

Robin Dicks






It’s life Jim, but not as we

know it

Phil Gott

www.peopleism.co.uk

Robin Dicks






It’s life Jim, but not as we

know it

We’re doomed

Phil Gott

www.peopleism.co.uk

Robin Dicks


Questions, further information, coffee drinking...

Robin Phil

[email protected]

07940 886677


[email protected]

07799 060159

www.peopleism.co.uk

mailto:[email protected]

mailto:[email protected]

Phil Gott

www.peopleism.co.uk

Robin Dicks


The value we got exceeded our expectations. Robin offered ideas, examples and comments to help us decide the best course of action and provided a very high level of service, clarity of documentation and follow-up. The presentation of findings was handled very well and gained the respect of partners Head of Marketing, Regional law firm

The feedback from Phil Gott's sessions is uniformly excellent. He is one of the most successful outside providers we have ever used. He works with the minimum of fuss, and establishes a good rapport with partners. Director of Research & Development, City law firm

Us

Robin Dicks Expertise: Strategic Marketing Development of Client Relationships Key Performance Indicators Performance Management Client & Market Research Business Development

Phil Gott Expertise: Coaching Training Empowerment Performance Management Organisational Development

driving profitable growth for your firm€¦ · law firm failures below average financial...

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