Make More Rain : planning, risk managment

Strategic Planning Will Not Predict the Future, But It Will Prepare the Law Firm for It

Admin — Mon, 14 Aug 2006 17:20:00 GMT

If you don’t believe in strategic planning, you must read Rob Millard’s post Creating Prepared Minds. His post includes an excerpt from an article by McKinsey & Co.’s Eric Beinhocker titled Creating Strategy in an Unknowable Universe.

Breinhocker gets it right. If you think strategic planning is about predicting the future, you are dead wrong. If that is why you are not doing it, you need to revisit the issue. Assumptions (predictions) are inaccurate. If you get one right, it is just the luck of the draw. The first rule of the planning process is that you must plan to change the plan. As the future gets closer, you continually change your expectations and reactions to it until you arrive on target.

Planning gets the entire law firm team playing from the same play book. It prepares the team for the future and capitalizes on its opportunities. Rob’s post is a must-read that may inspire you to read Beinhocker’s entire article.

Chance does favor the prepared mind. Top performing firms do it. If you want a good reason to start, consider this reason: more than an eight fold difference in per-partner income. A soon-to-be-published survey of midsized law firms by Juris, Inc. discloses that the top performing 25 percent of firms earn more than eight times the per-partner income of the bottom 25 percent. That seems to be a good enough reason to start.

Three important rules for successful planning include:

The planning plan must be to change the plan. Strategies are temporary targets based on inaccurate assumptions and estimated capabilities.
The planning document should consist of words and phrases to facilitate frequent updating.
The structure is a critical part of the process.

The structure for the strategic portion of the planning process that I have successfully used includes nine main areas to be addressed by the planning team in the order listed. The nine subject areas are:

1. Nature of the law firm (or activity, e.g., practice area or department)

2. Environment in which firm operates

3. Opportunities/Capabilities (SWOT)

4. Assumptions about the future

5. Objectives--Mission/Strategic Thrust

6. Policies/Procedures (changes or new ones needed)

7. Strategies--How we are gong to achieve objectives

8. Priorities and schedules for programs, new resources required, measurements

9. Organization and delegation

For more step-by-step suggestions, reread the earlier post The Structure to Structured Planning. I also suggest a reread of Consensus Building for a discussion of the role of the structured planning process in building a consensus, i.e., preparing the mind to deal with an uncertain future in pursuit of a common vision.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Law Firm Succession and Continuity

Admin — Mon, 24 Oct 2005 17:54:19 GMT

I have made the point in the past that law firms with long-term prospects for success must go through a metamorphosis from an eat-what-you-kill personal service company to a more corporate culture with a life expectancy beyond that of those partners currently involved. When that happens, continuity of the business as a management objective moves much higher on the list of strategic priorities.

There are several aspects that have to be considered. Here is a short list:

Client Retention
Legal Expertise
Brand or Firm Image
Business Development
Management and Leadership
Capital Requirements
Partner Income

While not on the above list, I personally think a prerequisite for continuity management is the obligation to counsel marginal fee earners out of the firm. These individuals have the opportunity for a successful and productive career in other environments. If you miss the window by failing to face such situations early on, the firm will gradually own the problem for the duration. That leads to dissatisfaction and defections among the firm’s brighter and younger partners, depleting the firm’s next generation of leaders and managers. Without that pool of talent, the firm cannot have a sound succession or continuity plan.

Continuity covers more than just the succession of particular retiring partners. Retirement isn’t the only risk of losing an important member of the firm. Partners can leave the firm at any age. They leave for greener grass. Firms can lose them temporarily due to illness or accidents. You can wake up one morning to learn that a top performer has become disabled or died suddenly. Continuity planning takes all of those risks as well as retirement into consideration.

Continuity management begins by developing a culture where clients belong to the firm and not to individual attorneys. Many firms pair multiple attorneys with each significant client. They establish procedures for a partner other than the responsible rainmaker or supervising attorney to visit each client one to four times during the year to ask the questions “How are we doing and what else do you need from us?” Some firms often have formalized plans to rotate the supervising and/or billing attorney. The responsible rainmakers may be required after a time to share or give up credit all together.

Among the top 200 largest firms, partners are retired before the firm acquires a gray hair image. Sixty-two is not an unusual retirement age. When you move to mid-sized firms, compulsory retirement is less prevalent.

To assure continuity, many firms begin a transition in the role a partner plays around age 45 to 50. These mid-career professionals begin picking up more management responsibilities and start a process of gradually handing off direct client contact. Mid-sized firms’ biggest partner-loss risk is pre-retirement loss, including defections. Around 40 to 48, the firm begins to face an increased risk. If an attorney is going to move, this is the point where they have built their book of business. At mid-career, the time comes to do it or forget it.

Around 50 is the time when life changes due to illness or declining energy begins to impact their professional capacity. By then there should be a general understanding between the individual and the firm as to the path toward their retirement or change in the partner’s role from working attorney to manager, mentor, statesman, goodwill ambassador, community mover and shaker, etc. As long as they have the desire and the capacity, there are many ways other than long hours and high-energy lawyering for the older partner to continue as a valuable contributing member of the firm, well up into the seventies and eighties. They are the firm’s brand. They know who is who. They are respected in the community. They can give important clients top-level attention to cultivate the firm’s relationship with those key clients and while at it, cross sell services. They can publish, speak on behalf of the firm, and fulfill the firm’s obligations for community and charitable duties.

The key is to begin to shift the partner’s role to more management and rainmaking and gradually decrease their lawyering role starting between 45 and 50 in age. And for the firm to have in place a mechanism for rewarding a lawyer for handing off business and origination to the younger partners.
In addition to the issue of client retention and the role of maturing partners, the firm must also look to its talent pool. It must be hiring and training to sustain its practice specialties. It must pro-actively identify and cultivate the future leaders and practice managers talent in the firm.
For some, the issues involving continuity may be unpleasant to confront. For the firm as an institution, they must be approached openly as a matter of routine business planning.

Disaster Planning for Law Firms

Admin — Tue, 06 Sep 2005 17:53:07 GMT

One of the reasons so few firms have a disaster plan is that we tend to make them too complicated. A simple plan is more workable and you are far more likely to develop and follow such a plan. Complex disaster plans are likely to be destroyed right along with paper documents in a real disaster.

In 2002, the Juris® Users International Group held a panel discussion on disaster planning and out of that discussion came elements of an effective and simple plan—three steps that every law firm can implement.

Here are the steps as set forth by the panel:

1. The first priority is personal safety—always protect lives first. Establish evacuation and reassemble procedures. Make sure everyone understands that no one is to risk or endanger their life or the life of others for paper, media, or any other material or firm property.

2. Second, maintain current employee contact information (including an alternate contact outside of the area for use as an intermediary) and get the contact information in the right hands and in various forms, including a printed document. Establish calling "trees" so that by contacting a few people, information can be disseminated quickly to everyone.

3. The next priority is to protect the survivability of the firm by making sure that critical information is safe before the occurrence of a disaster. Online backup services were not economically available in 2002. They are available today. They are far superior to in-house backup procedures and methods. In-house backups often prove unreadable when required and as the New Orleans situation demonstrates—locally maintained off-site backups face the same risk as the law firm itself. Juris, Inc. has partnered with LiveVault to provide secure continuous backup service to Juris law firms. On-line backups are always current, always secure and are available even if you are operating from a different location. You may want to reconsider imaging to protect your paper documents. Imaging is the only technology that facilitates the protection of documents using traditional computer backups. And you gain all the other advantages of digitized information and images.The above three steps are the essentials and if implemented will materially increase the ability of the firm to survive in a crisis. There are three other steps that take your plan to a higher level. How thoroughly you should pursue the added three items depends on the risk faced by your present location. Are you at high risk from water, earthquake, fire, or terrorist attack, for example? The three additional items involve Facilities, Equipment and Insurance.

1. Address the issue of where the firm can set up a temporary operation. This may be as simple as identifying the homes of certain partners preparing a list of options, including branch offices or client locations. It is a good idea to identify and establish contact with a commercial real estate organization that you can call on a moment’s notice. Your plan could be as elaborate as contracting for backup space. This depends on the degree of risk faced at your present location. Generally, the space issue can be resolved after the fact, provided steps 1-3 have been carried out.

2. Address the equipment and phone issues. This can be as simple as identifying portable equipment and cell phones owned by the law firm but assigned to individuals that can be called in for firm use in a crisis. It can be as elaborate as contracting with an offsite disaster recovery facility or maintaining a server, network and minimum equipment at an offsite facility for emergency use. This issue can usually be resolved in a reasonable time period after the fact, provided steps 1-3 are in place.

3. Provide additional insurance to finance payroll and operations during the period of business interruption.

To summarize, the three essential disaster preparatory steps your firm should have in place include:

1. A communicated policy for putting personal safety first;

2. Maintain personnel contact information in the hands of the right people;

3. Use a online backup service like LiveVault to protect critical data.

Juris clients can learn more about LiveVault services available through Juris, Inc. by calling 877/377-3740 or by e-mailing info@juris.com. Law firms can also contact LiveVault directly by going to www.livevault.com.

Law Firm Disaster Survival

Admin — Fri, 02 Sep 2005 17:48:19 GMT

We have a personal stake in what is going on in the gulf coast region. Juris, Inc. has in excess of 130 law firm clients in harm’s way from Katrina. Seventy of those are in the areas most affected by Katrina, including New Orleans. Katrina may well involve more Juris clients than any single prior event. The first concern for the people of Juris is for the individuals affected, including the employees of Juris law firms and their families. Juris, Inc. has made a contribution to the American Red Cross and many Juris team members are making individual contributions.

On the business side, the most important role Juris will play is helping law firms to recover data and resume operation when circumstances allow. The availability of usable backup data will be critical to the recovery efforts. In other disaster situations, we’ve seen first-hand the consequences of law firms using in-house backup methods as their primary data protection strategy. Given the wide area of destruction from Katrina, we are more concerned than ever about the backup issue. Even those law firms that took the extra step of storing backups in their bank or in the home of a trusted employee are at risk from damage or the loss of the backup media.

Katrina brings home the importance of a safe and secure backup. If you are still making your own backup, you are putting your firm at risk. Stop relying on error-prone and unsecured in-house backup procedures and spend the few extra dollars necessary to truly secure your system’s critical information. The way to do that is by using the services of one of the major suppliers of continuous online backup services. The additional cost is not that great, and it is a small price to pay to secure the continuity of the law firm and the preservation of the livelihood of every member of the law firm team.

Juris has partnered with LiveVault to provide Juris law firms with continuous online backup services. LiveVault is one of the best sources of online backup services but regardless of whom you use, please take the above advice—stop relying on in-house backup methods and use a secure online alternative from one of the major suppliers. It is one of the easiest steps you can take to help insure the survivability of the law firm. Your backup data will always be current, will be safely stored in a secure location and will be available when you need it, even if you are operating from an alternative location.

If you are a Juris licensee and would like more information about LiveVault, contact Juris, Inc. at 877-377-3740 or e-mail info@Juris.com. You can also contract LiveVault directly by going to

http://www.livevault.com.