Can Strategic Planning Help Your Firm Right Now?aderantuser
What changes could you make today that would have an immediate impact on your firm? Often, the business advice given to firms overlooks some very basic steps that can quickly improve their performance. The term “strategic planning” may sound abstract, but if pursued in an intelligent way, it can effectively address many of your firm’s everyday challenges.
In my experience, five areas are particularly ripe for immediate improvement in the typical firm:
Overcoming security risks
The ABA recently listed the “Top Practical Security Tips” for firms. Almost none of these takes any special expertise and can all be implemented at your firm today:
- Using a strong password of at least 20 characters, and changing it regularly (i.e. ILoveWalkingMyDogCharlieInPiedmontPark@12am)
- Changing system defaults
- Protecting laptops with whole disk encryption
- Encrypting backup media
- Using a PIN for your smartphone
- Setting (and enabling) proper security on your wireless networks
- Use a password vault for sensitive information (LastPass or KeePass)
Properly measuring business metrics
Regarding metrics, which ones should you focus on? A story in the National Law Journal titled Which Metrics Matter Most?, noted that “what gets measured gets managed.” Firms should therefore avoid wasting time on less productive metrics such as non-billable hours, and start measuring positive items such as hours spent on business development and client follow-ups. First and foremost, figure out exactly what it costs your firm to do business. In other words, how much net profit do you actually make from your cases, clients, etc.? While you should focus on positive metrics you should create a culture of measuring everything. We live in a data-driven world and data is key to proper decision making. There is no such thing as too much data. The trick is making it relevant. If you are not measuring then start today. There are about 16 key metrics that are a good starting point and we will be sharing those soon.
Having a real understanding of your costs and fees
To understand pricing you must first understand your costs. To effectively determine whether your pricing properly reflects your time and costs, gather every bit of relevant data. Based on the result, sometimes you’ll decide it is better to walk away from a non-profitable deal and at other times you’ll not want to leave money on the table. If you are not breaking work down into measurable components such as phase/task, you should be. Once you understand this you have the power to understand and present multiple pricing options, which not only gives you the upper-hand but provides your customer with options.
Knowing and understanding your clients
How well do you know your client? What does your client really think of you? Speaking of clients, do you know your firm’s NPS score? If you’re not familiar with this term it stands for “net promoter score” and is obtained by asking your clients to report on a 0-10 scale how likely they would be to hire you again or recommend you to someone else. Needless to say, a high NPS reflects well on your firm’s current condition and future prospects. And besides being a great metric to measure your firm’s health, your NPS also gives you an excuse to interact directly with your clients.
Take advantage of outside expertise
Finally, I’m a big believer in firms hiring experts for keys areas where they lack expertise, such as marketing and business development, project management and pricing. For instance, at Aderant we don’t only use software developers when planning and building our solutions. We work extensively with clients through our Product Innovation Committees (PIC), and user experience experts to determine how to best address their issues and meet business needs. In addition, we typically reach out to industry experts, thought leaders and groups such as the True Value Partnering Institute to ensure we are planning the product based on industry demands, and not our own pre-conceptions of what is needed.
So at your firm, think of ways you can leverage outside knowledge and expertise to make the best possible decisions. Consider dedicated sales or business development personnel, filling these roles with professionals in those areas, not necessarily lawyers.
These are all things you could work on today to improve your firm and positively impact your bottom line. Do you have some tips to share as well? Share your thoughts in the comments below, or let us know on LinkedIn or tweet @Aderant and let us know what you think!