New Year’s Resolutions for Law Firm Managing Partners
It’s a shame that we tend to make New Year’s resolutions on January 1st. For law firm managing partners, this time of year is so busy with closing the books and compensation meetings that we barely have time to focus on anything beyond what went right and wrong in 2010. Let me give you a suggestion for this year. Pretend that 2011 really starts on the Ides of March and that is when your resolutions kick in. Between now and then, send your assistant Blackberry messages (or Tweets if you’re accomplished in the social media) with resolutions as you think of them. Then, start with a clean slate after all the yearend rigmarole is over.
In the meantime, here are my suggestions for 2011 Managing Partner resolutions.
1. Make clients pay upfront. Take a hard look at your receivable problems and profile your over 180 day deadbeats. Odds are that you’ll document what you already know: your greatest credit risks are small businesses and individuals. Create a simple policy requiring a retainer from all new small business and individual clients equal to 20 percent of the overall project or some other reasonable amount. If they balk it’s a good sign that they have no intention of paying or are counting on a retroactive contingent fee deal if their project fails. Retainers reduce write-offs, improve cash flow and show clients that your firm understands business.
2. Put the Chiefs to work. Law firms have created all sorts of Chief positions: COO, CFO, CMO, CIO, CHRO, CDO, CVO, etc. But, in most law firms, the individuals, even though well qualified, are not given the authority to justify the title. If you are a managing partner (or CEO) who constantly bitches about not having enough time to get everything done, try giving your people more rope. Start by getting the “Chiefs” to rewrite their job descriptions to accurately describe what they can do without first seeking approval. In most firms, senior staff members can do nothing greater than make recommendations, which means that every issue beyond how many pencils to buy hits your desk. If you are successful in delegating authority you will have gained time for more important problems that others can’t handle for you. If your Chiefs show that they can’t deal with greater responsibility, you can replace them with lower level managers from whom less is expected.
3. Focus on Process. Firm-wide for one year focus virtually all of your CLE on learning how to perform legal services more efficiently. Legal project management is more than just an implementation tool for alternative fees. It is the big enchilada for general counsel of all sized companies. Don’t waste resources on business development until you have something to sell. Make sure you get someone in to teach every lawyer in the firm – especially the senior partners and biggest rainmakers – project management skills. The payback is huge.
4. Mine the data. What is your firm’s greatest source of new business? What is the volume and size of the deals of your corporate practice compared to your competitors? How much work is referred between offices? These and literally dozens of other questions can be answered from data that is probably already available within your firm but no one is looking at. Reassemble your strategic planning committee and put them to work developing the key strategic questions for which you need answers and determining where the data is collected. Don’t immediately jump to an IT solution unless your staff can demonstrate that it won’t cost a fortune in programming. Instead, hire a bunch of college or even high school kids at minimum wage to sift through the data. Don’t worry about accuracy – odds are you’re looking for general information, not statistics to the third decimal. Want to have some fun? Give the college kids a couple of hours a week to creatively look at the data they are working with and give a one hundred dollar bill to the person who finds the most interesting correlation.
5. Rebuild one aspect of your firm. Select one staff department and make a project out of its reconstruction. Don’t choose your big problem areas. Start with a manageable function that people don’t pay a lot of attention to – maybe the file room or accounts payable. Create a small committee of a couple of senior staff and lawyers to look at a function and decide, “If we were going to create it from scratch, what would it look like?” Make sure the committee looks at technology, staffing, operating costs as well as the possibility of getting rid of the function or outsourcing it. Create an objective to cut the cost or improve the service to lawyers by 25 percent. That may not be doable but it is a good objective to start with and you don’t have to implement changes immediately. The redesign can be a model to move toward over time. When you finish with one function, pick a new area.
Bonus resolution: do the same thing with practice groups.
Seriously…make some resolutions for change in 2011. If not the ideas suggested here, then find others that are specific to your firm. Even if you don’t complete them, odds are the act of targeting the issues in your own mind will make you more effective in the coming year.