My Editorial Advisory Board blog for Managing Partner magazine
Activity levels are on the increase in the UK legal market. Has the corner been turned? Can we now be more confident that the much-vaunted green shoots of economic growth have finally taken hold?
For the past twelve months, a growing swell of firms have reported increased activity levels; the challenge has been coping with enduring downward pressure on prices and implementing operational efficiencies in order to convert these increases into profits. Now we are seeing growth which suggests that some of these price pressures are easing too.
Recently-published research from Deloitte suggests that it is an increase in hourly rates which has driven a revenue rise of 6.3 per cent at the UK’s top firms this quarter compared to the same period in 2012. If this is reflected in the market more widely, then we may be witnessing the beginnings of a return to above-inflation rate rises which, when combined with more streamlined operations, should convert to a good uptick in margins.
However, now is not the time to sit back on whatever laurels can be mustered; rather, it is the moment to push forward and drive your firm towards more aggressive growth. There is a transient opportunity to seize early-mover advantage and capture an increased share of an expanding market. For such a plan to succeed, the firm will require a number of building blocks, both physical and attitudinal, to be in place.
Building blocks for success
Firstly, there is an imperative for any approach to be nimble. It must be characterised by a focus on action rather than over-burdensome planning. It will serve little purpose for the leadership team to spend the next six months crafting the perfect plan, only to emerge from their deliberations to discover that the fleetest of foot have already grabbed the low-hanging fruit.
Next, any firm will markedly increase its chances of success when knowledge is shared and client relationships are developed across practice areas and partner groups rather than being shackled by selfish attitudes and silo mentalities. With activity levels on the rise, the need to build the frequency of internal communications, emphasise collaboration and encourage cross-referrals should be ever present.
Prioritisation is also key. Before exploring new avenues, it has to be sensible to ensure that current opportunities have been properly evaluated and fully acted upon. As activity levels increase, stay close to existing clients, both to service their expanding requirements and to secure the relationship from the advances of predatory competitor firms.
Finally, be prepared to put in some ‘hard yards’ over the next few months to fully capitalise on new opportunities as well as to deliver excellence through the existing book of business. This is a period characterised by resilience and endurance.
Each of these factors is key to building a strong foundation for the firm as market activity increases. However, the most important factor in play is a psychological one – confidence. It is confidence, self belief and high levels of energy, coupled with a clarity of purpose, which will separate the winners from the also-rans.
Henry Ford’s words remain as true today as when he first spoke them “Whether you think you can, or you think you can’t – you’re right.” What is your mindset?