Strat plans: Why do them?

Issue November/December 2016 By Tina Shinnick

Many of us have experienced the 20+ page five-year strategic plans that take countless attorney hours to agree upon and write, but then end up on the shelf gathering dust. However, we also hear time and time again that developing, articulating, and writing down goals is good business management. So, why doesn't it work when we spend so much time doing it?

One reason could be that it's too detailed or too broad. A strat plan that is too detailed may state "Obtain 20 new clients in Philadelphia with matters likely to bring in over $x in the health care law practice by the end of Q1." Whereas a strat plan that is too broad may simply say "Grow the client base in the firm by 10 percent." Strat plans must be focused and included clearly defined goals, but shouldn't be so specific that it becomes unachievable and therefore overwhelming.

Another possible reason why the strat plan may not have worked was that you may have failed to get proper buy-in before the plan was finalized. Did you receive input from the practice group leaders? Did you talk to individual partners to learn about their specific practice plans and marketing goals? And, perhaps most importantly, did you talk to your clients? What is on their horizon? What are their stressors and impediments? What problems do they foresee in the near future that could impact their business?

Often people can also be confused about the differences between a strategy vs. a goal or a strategy vs. an action plan, and don't know where to start which could be another reason why your strategic plan did not work.

Who has the time? The most obvious reason (and excuse!) for not developing a strat plan is simply time. I would answer the question "Who has the time?" with another question: Who can afford not to have a strat plan?

Getting started

The best strategic plans take the following into consideration: internal and external factors.

A commonly used exercise is the SWOT analysis that involves considering what the internal factors are (strengths and weaknesses) as well as the external factors (opportunities and threats) that impact the firm. You would be surprised what you will gain from doing a simple SWOT analysis.

Another tool used to evaluate these factors is the PEST (or STEP) analysis: What are the Political/Legal, Economic, Social/Cultural, and Technology Trends that will impact the firm? Laying these things out in a simple grid with practice groups down the side and PEST across the top often can point to where to start with the strat plan.

Competitive advantage

When determining your competitive advantage, it is critical to ask "What does our firm have that other firms don't have?" One framework used to define this is VRIO: Valuable (value to the client), Rare (not easily found or accessed), Inimitable (competitors cannot do it or copy it), Organizational Capability (the forms ability to capitalize on the advantage). I know what some of you are thinking - "Not all practice areas are rare" - but, talent, experience, nimbleness, flexibility with rate structure, are. For example, how are you using technology to give you a competitive advantage? If you are not thinking about this, you should be and it should be in your strat plan.

Keeping it simple

Strat plans typically have Goals (what do we want to achieve), Strategies (how will we achieve the goals), and Action Plans) (detailed approach to the strategy). It's important to have built-in accountability with individual names attached to action items and time periods defined for check-in. It also helps to define what success looks like at the outset. If the goal is to grow the real estate practice, then success could look like 10 percent more matters in a 24-month period. Defining success at the outset will let you determine whether or not you've achieved it. If you don't define it, how will you know when you get there?

How to measure success

Key Performance Indicators (KPIs) include: monthly billables; monthly revenue; timekeeper utilization; number of new clients in a given period; number of new matters in a given period; realization of billed/billable; realization of received/billed; etc. If you can measure it, and it is elevant to the strategy you have defined, then it is a KPI.

Final thoughts

Question: What comes first? Strategy or culture? Structure or strategy?

Answer: Culture supports Strategy, and Strategy informs Structure which informs Process.

If you define a strategy that is not consistent with the culture of your firm, you will not succeed. For example, if one of your strategies is to encourage more business development by individual attorneys and you are going to give each attorney (including associates) an annual budget but your culture is such that associates are not empowered to do business development on their own, you will not succeed.

Once the strategic plan is done, it must inform your structure and your process. Do you have the right people, process, and technology to achieve the desired outcomes?

Bottom line: Strategic plans don't have to be scary, and they don't have to be dust-catchers. They can be aspirational yet realistic, simple and achievable, informative and motivational.

Other Articles in this Issue: