Is Going For Growth The Answer To High Street Solicitor Blues?
I attended the Law Society ‘Going for Growth’ seminar recently, organised by the new Small Firms Division and the Law Management Section. Fascinating. We enjoyed a real mixture of helpful comment from consultants to practical examples from practitioners. It got me thinking – What is the purpose of the Small Firms Division? Why has the Sole Practitioners Group (SPG) not transferred across to it or joined up? Is ‘growth’ what is required to raise High Street practice from the doldrums?
Small Firms Division (SFD)
After many years of criticising small firms and trying to encourage practitioners to become employees of larger organisations it is to be welcomed that the Law Society has taken note of the fact that over 8,000 solicitors firms are ‘small’ – that is, have 5 partners or less – out of the approximately 11,000 firms of solicitors in England & Wales. Rather than encouraging them to merge or close perhaps the SFD will continue to try and provide information, advice and training which will enable them to survive and thrive with practical assistance and global argument on their behalf about reducing the ever growing bureaucracy of regulation.
As to why the SPG has chosen not to throw in its lot with the SFD, I cannot speak for the SPG but perhaps it is because it is uniquely interested in supporting the solo practitioner and sees the SFD as providing something for the larger firm!
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Is growth what is required?
Clearly anyone in business, as opposed to the not for profit sector, is in business to make a profit and there is no doubt that profits have been well and truly squeezed in every area since 2008. So, it might seem to be obvious that growth would be a good thing. But, growth in the wrong field or just getting bigger without more profitable seems to me to be anything but what is needed at present.
It might have been helpful to have started the day with some strategic discussions about the way firms might decide on their direction of travel – that is, what it is that already makes them money and what it is that does not. Chris Marston, of the seminar sponsors Lloyds TSB, did make a telling comment or too towards the end of the session about the need to distinguish between the sort of work a firm undertakes i.e. process or advice, and decide upon the appropriate strategy to make the process work better and drive out waste; and price your services according to what the customer (yes, customer!) wants – the best deal for something not valued or the trusted adviser willing to get to know and support the client through the key events of life e.g. in providing estate planning and not just advice about writing a Will.
Many firms, I believe, could gain significantly from simply reflecting on the differences between process work and advisory work. Accepting that quite a lot of what we do is process driven is hard but if we cannot see this then we will not be competitive. If some of the work a firm does is of the process type then it should invest in IT and the right level of staff, which requires biting the bullet and making the surplus people redundant or moving them into the harder advice services for which premium fees can be charged.
Trish Kinahan, of Hazelwoods accountants, provided a splendid summary of the various different structures which firms could adopt to improve profitability and mitigate against risk. All of which was instructive and many firms would benefit from deciding to improve their structure to make themselves more resilient and more attractive to both internal and external potential purchasers. After all, for many practitioners over a certain age the only project which will or should be on their mind is how to ensure a positive exit strategy which works for the individual, the firm and the firm’s clients.
In my view, deciding on the structure of a firm should follow on from deciding on its strategy. Once we know what we are going to offer; why and how, then we need to do our damnedest to increase the volume of that type of work.
David Gilroy, of Conscious Solutions, did provide some really useful marketing strategies to drive and retain clients and help small firms generate more work from their database of clients. This is practical and sensible growth. The problem is simply persuading ourselves to prioritise these activities. This requires each practitioner to agree to change their daily habits to include marketing activities within the mix.
Without clarity about the type of work we want and need marketing makes little sense since getting more work of the wrong type does nothing for improving a firm’s profitability.
Hearing what other practitioners have done and why is always good news so participants should have been grateful for the input of Tony Roe, Caroline Havers and Chris Fry who shared their experiences. It was a shame that many delegates left before hearing about these examples. What struck me as interesting was that in every case they each left their predecessor firm because that firm was changing and did not need their services any longer. This was the catalyst to make a fresh start.
For many in the audience I suspect this was not something they would want to do or if they had already done it they might have been interested in hearing from similar outfits which were a little older and had experienced the next stage in a business’s life cycle and not just the passion and euphoria of starting out.
Nevertheless, it was worthwhile. All the speakers spoke of the need to choose the location of the business with their client market in mind – so location and style was very important. It is strange how often I see the management of law firms ignore the significance of location and style of premises to the creation and retention of goodwill and this rather confirmed my view that to have happy clients you need to show you understand them by being where they need you to be and look and feel how they expect you to be – efficient and technical or cosy or house & gardens as appropriate!
It was also true than in each case study example the person concerned had seen a niche about which they were passionate and set about servicing that niche in myriad different ways, many of which were innovative. Entrepreneurs are creative and appreciate that passion drives creativity and good ideas.
I conducted a simple exercise in a training session I carried out earlier in the week and was not entirely surprised that the work groups comprising support staff and trainees were more inventive and more observant of client behaviour than the work group comprised of lawyers! Let’s harness the good ideas and enable them to happen by involving everyone in our firms in improving our own firm’s processes and advisory approaches. Listening to all staff and trying some of their ideas could radically change the way clients see the firm and may dramatically increase response rates.
So, I don’t think ‘going for growth’ is the answer to current High Street blues. First of all, addressing the blues needs medicine – it requires acceptance that our firms need to change what they do and how they do it. Secondly, that means we each have to take the lead and show that we are prepared to put effort into what and how we do things to produce positive results.
As a result, it will not necessarily mean your firm will remain as it is now; nor that it will result in having more people or more turnover. It will be about surviving and thriving in whatever market we choose to be in with good and sustainable profit margins. If that is what ‘going for growth’ means then I am all for it!
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