What are the issues?
-How to balance current profitability (chargeable hours) with developing business for the future (investment activity).
-How to balance time and effort between defending and developing existing clients and bringing new clients into the firm.
-How to avoid feast and famine.
-How to ensure that the firm is not dependent on a small number of rainmakers and that it has strength in depth across the whole range of business and client development activities.
-Where to search for ‘new’ business (from both clients and targets).
-How to win the best new work
-How to ensure that clients recognise all of our capabilities.
-How to make sure that the best clients keep coming back
So why are these issues so difficult to resolve?
Most firms still try to manage by results. What do we mean by this? Talk to whoever has responsibility for business development within a law firm in a conversation. Ask questions like: “How is business development going? How are we doing?”.
The chances are that when the numbers are produced, these will relate to the results that the firm has produced to date. It will include the work already done and billed and the work booked and confirmed but not yet carried out. Good, bad or indifferent, there is nothing that can be done to change the figures. If they are bad perhaps the senior partner will tell everyone to sell harder but this is likely to have little impact.
Wear, for a moment, a production management consultant’s hat. You are visiting a factory that you know has poor quality output.
When you go down on the shop floor the factory quality manager tells you that they know exactly how many rejects per thousand they have and they know exactly in which batches they occur. You ask them how they know this.
They take you to the end of the production line and introduce you to their quality team. They measure every aspect of the quality of the product as it rolls off the line.
This factory manager has totally misunderstood their role as the manager of quality. Their job is to improve quality, not just measure it. While their team focuses on the output and not the input, they are bystanders – not managers. Sure, having the output data is helpful. It tells us if any changes we made earlier have worked or not – but it is not enough.
If the only measures we have in place are on the quality and quantity of output, then we are not in control of production in the future. Measures need to be in place to ensure that the quality and quantity of inputs are also right.
What about the factory manager who has high quality output but once again regards their role as one of measurement? If quality is good is there any need for them to change their way of working? This person should not sleep too comfortably in their bed.
Even if production is good today, this individual will never know if an input of raw materials is below specification and they will never spot the new operative setting the machines at unacceptable tolerances.
Eventually, the poor quality inputs will work their way through to the outputs – with consequent negative effects.
This scenario is pure fantasy. No-one would manage a production facility in this way. However, this is exactly how business development is managed in many law firms: the focus is on the results – not the activities – and not in real detail with a genuine understanding of what the analysis means.
