How your people dictate 'your future direction

We are all aware that succession is a huge issue, but planning your future direction early will be the recipe for a successful outcome to this dilemma.

We have seen a few failures ?in recent weeks, with more to come. Some say consolidation ?is inevitable for many firms, but are they mergeable? Becoming ?a successor practice has stopped many mergers in their tracks, and your solution may well be based on retaining your independence.

With a thousand or so firms no longer able to deliver criminal legal aid, there are questions about their sustainability. ?If this represented only a small part of their practice, then retraining some staff will be ?an essential exercise.

This is why the people you have in your practice could well dictate your future direction.

When planning the future for your practice, deciding on your business model should encourage you to consider your future direction. If we accept that a firm wishes to continue offering a commoditised service, then accepting who will deliver the work in the future will be an essential part of your decision-making strategy.

The alternative is learning ?to charge a premium price ?for your services and dropping many services that are no ?longer profitable.

The models are both ?distinct and measurable, and both can work.

Business models

The firms providing client-led hourly charged services will need to charge a premium for their time. Clients will expect excellent client care and service – after all, that’s what they are paying for. In this model, the firm’s owners or partners actually win and deliver the work through their reputation. 

This model represents the shape of an hourglass, with ?a partner or fee earner being supported by one or two members of a team to deliver exceptional service and ?charge a premium price for ?that service.

On the other hand, ?those firms that choose the commoditised route must process the service and allow for the de-skilling of the people involved. This does not mean a reduction in customer care, but it does mean paying the right people to do the work. Partners and experienced fee earners should not be involved in ?any way other than winning ?the work through good relationships and managing ?the team of people that can deliver the work at a price you can afford. 

This model represents a pyramid and should work on the basis that one owner or partner manages a ratio of ten people to one supervisor. This allows you to use software that drives production – this can be cloud based, with little capital expenditure. For example, in the operation of a conveyancing department, the software drives the process and automatically activates pre-approved letters and searches, taking the conveyancing process away from individual people.

We must also be aware that the lenders will control which firms eventually remain on their panels and will drive many smaller firms away from conveyancing. Without the ?right technology and sufficient resources, they will find their market share eroding. For surveyors, a software tool called Quest is a prerequisite to being on lender panels, and solicitors firms on lender panels will surely follow the same process.

Each model needs to be established for each department, and running a successful practice in the future will depend on getting each model operating correctly. What you cannot do ?is merge the two models and provide a commoditised, price-driven service delivered by partners and senior fee earners – it will cost you money with every file you open and will be the recipe for failure.

Once you have decided on your model, hire people based on where you want to be, not where you are – the team that can successfully run a £1m practice is not the same team that can run a £20m company.

Putting the right people in the right places is absolutely critical to sustaining growth. Whole person assessments and job benchmarking will allow you to take a systematic approach to hiring and career development, which will reduce employee turnover and, in turn, produce greater profitability.

Take care of your people ?and they will take care of ?your business.

Viv Williams is CEO of 360 Legal Group @360legal www.360legalgroup.co.uk