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Want to disrupt the industry? It’s time to run a different race

My guest article for LexisNexis The Future of Law blog.

http://lexislegalintelligence.co.uk/intelligence/blawg/2013/06/want-to-disrupt-the-industry-its-time-to-run-a-different-race/

We have seen many examples of efforts to improve efficiency and to reduce costs since the start of the great recession. We have witnessed firms conduct restructurings, enter into outsourcing arrangements, implement process reengineering, invest in IT and knowledge management systems, reshape partnerships and consider alternative business structures and external investment.

The core challenge, however, lies in developing strategy which is not centred on running the same race as everyone else, only faster or better. Such “me too” strategies in a law firm context are difficult to sustain in the longer term. This is because, within a peer group, incremental operational efficiencies can be relatively easily replicated and so any cost or profit advantage that has been achieved is fast eroded. The risk is that the reality of pursuing such strategies over an extended business cycle is simply a reduction in fees-charged per unit of activity in what fast becomes a race to the bottom. That is not to say that innovation in operational efficiency is not important but rather that it is unlikely to be sufficient.

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External investment: Can the legal profession really deliver a decent return?

My guest blog for Totum Partners (www.totumpartners.com) the leading law firm management recuitment consultancy.

This month we welcome guest blogger Andrew Hedley, who provides a few salutary lessons for law firms that are serious about attracting external investors.

There was much excitement from the private equity community a few years ago when the possibility of external investment into law firms first raised its head.  I had a number of conversations with potential investors who waxed lyrical about the “mouth-watering” profitability available in the sector. They clearly had no understanding of the operating basis of the traditional law firm financial model!

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It’s time to compromise on merger candidates: start looking for a doable deal

Over the past four years, the ‘perfect storm’ of deregulation and economic downturn has crystallised issues for managing partners. Having drawn comfort from the belief that they had a strong and profitable business, albeit protected by regulatory barriers and driven by an exceptional period of bull market activity, firms have come back down to earth with a deafening thud.

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Spring into Action!

“Vision without action is daydream. Action without vision is nightmare.”  Japanese Proverb

Without a clear vision, coupled with a strategy to deliver it, firms leave their future success to chance.
But the vision must be more than clear, it must be achievable. And the strategy to achieve it must be founded in the firm’s resources, capabilities and client opportunities. Most importantly, and self-evidently, any vision will only become reality through changes to the behaviours and activities of people across the firm.

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Leading by Example

“Time is neutral and does not change things. With courage and initiative, leaders change things.” Jesse Jackson

Leading a professional services firm can be an unenviable task but strong leadership, setting a clear sense of purpose and direction for the business, has never been more important. What is also crucial is that leaders, by their actions rather than their rhetoric, create an agenda for change and demonstrate the high levels of energy and resilience needed to alter the direction of their businesses. They need to walk the talk and be seen to do so!

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Rabbits in headlights?

“So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself… which paralyses needed efforts to convert retreat into advance.”  Franklin D Roosevelt

The words of Franklin D Roosevelt in his inaugural address to Depression-era Americans should resonate with the leaders of 21st century professional services firms as we enter unchartered economic waters. However, the work of social psychologists tells us that what really paralyses people is not simply fear but rather the presence of fear without any action plan to reduce it. The “rabbits in headlights” syndrome!

What are the implications for business leaders and how should they respond to ensure that their firms and their people are fit for whatever the future might bring? This is a time for leadership, clarity of direction and tenacity of purpose. There should be an increased emphasis on the four core areas of analysis, decision making, communication and action rather than the beating of a hasty retreat behind the closed doors of the boardroom. Aspects of each of these central competencies are the focus of this issue of HedsUP! which I hope you will find interesting.