Toward More Effective Strategic Management of Your Firm - Frequently Asked Questions (Part 1 of 2)


ALA Soundings

Practitioners and consultants agree that strategic planning is an important part of leading and managing the modern firm.  While some firms succeed in strategic planning, many others devote countless hours with limited to no results to show for it.  This is a growing concern for those connected to the legal profession.

A 2005 Strategic Planning Survey conducted by Edge International supports this concern.  Of the 156 law firms surveyed only 30% indicated they have implemented "all or much of" their Plan, while 40% indicate they have implemented "virtually nothing." 

These results should be cautionary for any firm considering strategic planning. 

I believe the difference between success and indifferent results in strategic planning for law (and other professional service firms) relates to:

  • The lack of understanding the basic concepts of strategy, including the difference between Strategic Planning and Strategic Management;
  • The lack of real agreement among partners on key issues; and
  • The difficulties encountered during implementation.

Simply put, planning and implementation are not often linked in our thinking, leading to the failure of most Strategic Plans.

I advise any firm considering Strategic Planning to enlarge their thinking and consider the concept of Strategic Management as defined below.  To help in making this shift, I will provide my thoughts and experiences in a series of three articles intended to provide a more complete understanding of the Strategic Planning and Strategic Management Processes.

This article will focus on "Frequently Asked Questions Relating to Strategic Planning."  In subsequent issues of the Soundings, the series will address "Issues to be Addressed for Effective Strategic Planning" and "Linking the Strategic Plan to Strategic Management of Your Firm."

FREQUENTLY ASKED QUESTIONS RELATING TO STRATEGIC PLANNING

What is "Strategic Management?"

Strategic Management consists of two major components as it relates to the implementation of the Strategic Plan:

  • The Strategic Plan; and
  • The Management Process

The central purpose of Strategic Management is to ensure the course and direction of the firm are well though out, sound, and appropriate.  An additional objective is to ensure that the limited resources of the enterprise (time and capital) are sharply focused and support the course and direction of the firm.

Many firms struggling with the implementation of a Strategic Plan have not yet recognized that Strategic Planning is part of a larger process of firm management, and therefore do not have the processes in place for successful implementation.

What is "Strategic Planning?"

Strategic Planning is the process of making choices concerning the future of the firm - the position you would like the firm to occupy and the means by which you will get there.  Furthermore, a well written Strategic Plan can be used to describe what you will avoid in your pursuit for your goals (i.e. practice areas you do not wish to enter).  It also provides the basis for above-professional-average incomes for you partners.

A Strategic Plan is not a one shot effort in aligning, focusing, and moving a firm forward.  Rather, it is part of a complete approach to leadership geared toward continuous re-evaluation of both ends and means, and continuous improvement in the implementation of plans.

How Does Strategic Management relate to the Strategic Plan?

Strategic Management incorporates the firms strategies into the everyday activities of the firm at all levels, measures results, and provides a mechanism for giving and receiving corrective feedback at all times.  The most effective firms link the firm's Strategic Plan to the goals and plans of each practice group and individual, thereby ensuring all activities are aligned with the firm's goals during implementation.

The Strategic Plan is fundamental to Strategic Management, with the Strategic Management System bringing the Strategic Plan to life.

Does every firm need a Strategic Plan?

Any firm wishing to align themselves accordingly so that all, or nearly all, of the human effort in the firm is advancing in one direction should commit to Strategic Management, and therefore to a Strategic Plan.

What issues should we consider in our Strategic Planning Process?

When considering the Strategic Planning Process, all issues bearing on the future of the firm should be fair game. There are a variety of means for identifying the issues your firm should address. I recommend an approach that will identify external and internal planning issues.

 

An external assessment typically involves understanding your local market, competitors in your space, trends in economics, and the legal and regulatory environment likely to affect your firm. When conducting an internal assessment of the firm, I recommend the “7 S Organizational Alignment Model” developed by McKinsey and Co. The 7 S Model includes consideration of Strategy, Structure and Systems (the Hard S’s), as well as Style / Culture, Staff, Skills, and Shared Values (the Soft S’s).

 

While every firm is different, frequent Strategic Planning issues that arise again-and-again are:

 

  • Direction of the firm;
  • Communication within the firm;
  • Organization of people and resources;
  • Compensation planning and systems;
  • Practice development; and,
  • Development of a cohesive culture.

 

This topic will be addressed in complete depth in the second part of this article series.

 

How should a firm prepare for Strategic Planning?

If you are beginning from square one, the decisions regarding the basics need to be made. These include:

 

Who should plan? This includes deciding which group will be responsible for the planning. The choices here include the partner group as a whole, a committee of the partner group, or an integrated planning team made up of partners, associates, paralegals, and administrative staff drawn from a cross section of the firm.

 

What is our planning process? Is the principal work discussed and performed at a retreat or a series of mini-retreats? How much preparation can be done in advance and by whom?

 

Who should lead the planning process? In many firms the process is led by the Managing Partner or their designee. Many other firms report good results from using an outside facilitator skilled both in strategic planning and group process.

 

Strategic Plan preparation will be addressed in the third and concluding part of this series.

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Conclusion

Effective Strategic Planning is key to a firm's long-term success; however, too many firms believe Strategic Planning does not create improved results. I believe the answer to this problem lies in the commitment of a firm to Strategic Management (first) and to the preparation of the Strategic Plan (second) to set the direction, and not the reverse.