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2 de Noviembre de 2009

Strategy Forum - September 2009: Prove It!

There’s an old adage in compensation system design and strategy implementation: What gets measured gets done. If you’re a believer in converse statements then you also believe that what doesn’t get measured doesn’t get done. I was reminded of these statements recently when asked to review a mid-size law firm’s strategy. This is one that the leadership team developed on its own. It was internally and tactically focused and, as one might expect, the strategy positioning aspect was a bit “soft” with respect to the goals — to be the best, to have the best clients and to have the best lawyers.

Hildebrandt


For starters, I asked them how they are doing relative to their goals and they said, "Great! A+." I then asked them to do something that turned out to be a very challenging and unpopular request. I asked them to "prove it."

I've written before about the need for metrics, milestones or measures to evaluate progress. Without some form of progress measure, it's easy to claim success. It's also easy to let a strategy grow stale and have little real impact on the firm while claiming progress. No metrics; no accountability; no change.

To help move this firm forward, I did something that proved to be quite helpful - I gave the strategy to another consultant who had not worked with the firm, is a creative thinker, and who knows the marketplace.

My challenge to this person was to spend two days evaluating the situation and then really respond to the question, "How is the firm doing?"

Without going into great detail, three general goals of the plan are: an industry focus aligned with its primary geographic market; attracting and retaining the best lawyers; and developing market share in a specific type of litigation.  My imaginative co-worker reported back to us and presented several conclusions based on analyses and basic/crude metrics that he created for the task. For example: 

  • Is the practice aligned with the industries in the market? We created a pie chart that summarized the region's current industrial makeup and compared that to a pie chart of the firm's current industry work mix (by revenue). We then added a second chart for the firm from three years ago to evaluate the change in industry focus over time. We found that the firm has made significant progress in aligning with most of the industries, but there was significant work to be
    done in two key areas. 
  • Does the firm have the best lawyers? Absent the ability to interview clients and perform a sophisticated analysis, we simply calculated the percentage of partners who were cited in public sources as experts in their fields for our firm and for the competition. We found that our firm is in the middle of the pack based on this crude metric, but we also identified a new competitor who is gaining ground on the firm. 
  • How is the firm doing with respect to gaining market share in a new area of litigation? We tracked the litigation filing activity in this narrow field over the past three years and found that our firm, which is a relatively new entrant into this area, had made some waves with a lateral hire but had yet to capture a
    significant share of the volume of activity in the market.

The net result from this little exercise is more than a better informed analysis of the firm's progress (which we graded as a C+). We also developed some "starter metrics" that firm leadership can use to measure progress and create accountability until the next, more sophisticated, iteration of planning is done.

I often hear that certain goals are not measurable. I don't buy it. There's too much information at our fingertips and too many creative thinkers in our organizations to measure progress by instinct or perceptions. Sometimes the metrics are crude at the onset but they will evolve with the plan and the need to measure progress as accurately as possible. Strategic success is far too important to leave to chance.

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