Before you can plan, you need to face the (partner) music

In this second part of my article on law firm planning, I explore the basics in developing a workable and pragmatic long-term plan.

To begin, a determination needs to be made as to what kind of plan is most important to achieve. Generally, this is a plan for the development of the practice so as to grow the firm in size, quality and economic performance. That covers a lot of ground.

Partners can be reticent to pass judgment on their peers and often sweep delicate or embarrassing issues under the rug rather than address them. However, planning requires a certain degree of honesty and firms which are reluctant to address the more delicate issues are unlikely to be able to plan beyond year end.

Information needed

Information is the watch word for law firm planning. The more information that is available and the more accurate and unbiased it is, the better the chances of developing a successful plan for the next two to five years. It’s difficult if not impossible to create a meaningful plan of action without the data necessary to make decisions.

The firm needs to have certain basic information at its immediate grasp. The list isn’t complicated or particularly long. The degree to which these factors are substantively answered, however, is determinative of the quality of the ultimate resolution.

Billings and collections is where most firms will begin. The subject matter involving client generation will certainly be a point of discussion as well. The provision of client services, the market place(s) in which the firm resides, the competition and so forth are all areas in which information is required.

The internal data will of course come first because that’s where the focus has always resided. However, looking past that information may be the most important factor in the firm’s ability to plan.

Shepherding committee

Whether working with an outside party or exclusively on an internal basis, someone must be in charge. Experience dictates that this is best done by a group of three, five or seven individuals, the majority of whom are partners/shareholders.

The group should also include (depending upon the size and complexity of the firm) a head of finance, marketing director or possibly an outside accountant familiar with the firm’s history of financial management.

A senior level partner should chair the group and have access to all of the information necessary to lead the planning process.

Gathering data

Once the firm has made the decision as to the type of planning needed, the committee must hold hearings on various subjects and conduct interviews with various lawyers and non-lawyers in the firm.

These will include the accession of data appropriate to the type of planning desired and focus on the need to present information to the firm such that the individual partner/shareholder can evaluate the information and make decisions based upon the intelligence provided.

Presentation to the firm

Most firms will use a retreat of some sort in which to make the evaluations and decisions. For much larger entities, this may mean several meetings and then a telescoping process involving the entire firm in creating the plan.

For smaller entities, this is usually a weekend exercise involving the presentation, discussion, decision making and development of steps toward the plan’s execution. Such steps will include:

• partner/shareholder supervision and guidance;

• coordination with the marketing director;

• task delegation to partners and associates (with an assessment of strengths and weaknesses);

• task delegation to non-lawyers and support staff;

• educational seminars inside the firm; and

• a determination by the partners to make elements of the plan a priority.

Law firm planning is an unsung and unheralded part of the overall management of the firm. As is the case with all of the other requirements necessary to ensure success, planning should be considered an important facet of the operation of the entity. 

tberman@bermanassociates.net