Successful firms 'do'

The law management section of the recent Law Society survey and NatWest benchmarking report on law firm profitability indicate some interesting results. There is no doubt that these surveys demonstrate increased fee income in the sector, and most participants believe profitability will improve in the future. Over 80 per cent of participating firms are predicting an increase in profitability in 2015.

But, are firms that participate in these surveys proud of their achievements? What about the vast majority of firms that did not participate? The combined total of firms for both surveys is less than 500; therefore why are so few firms involving themselves in this exercise?

Valuable answers

• Questions many partners would like to have answered are:  

• How do we compare with other firms?

• What makes other firms better than us at some things?

• Why do some firms always seem to be better at marketing?

• How come we seem to be the only ones that struggle with finding and keeping good staff?

• Why is it that other firms seem to be able to afford things we can’t? and,

• When I talk to partners in other firms, they seem to have cracked succession and exit-route planning – why haven’t we?

These questions, and many others, often go through lawyers’ minds, and it is for this reason that many of us find benchmarking incredibly valuable – unfortunately, not enough to give us a true reflection of the 10,000 firms or so that have not participated. 

Well-run practices are happy to participate in benchmarking surveys, but this is not a true reflection of the profession as a whole. The Court of Appeal’s ruling on the government’s controversial legal aid reforms could well devastate over 1,000 practices – I suspect not many of those participated in the benchmarking exercise.

A step ahead

Both benchmarking reports show that our member firms always perform in the upper quartile in all areas. What is about to follow may seem blindingly obvious, but why are the majority of firms not doing as well as our members?

Let me say what it is not – it is not that our members bill significantly higher chargeable time; that they market themselves better; have a notably higher recovery percentage; hire smarter staff; or motivate their staff and partners so much better than other firms.

What they do is all of the above just a bit better and more consistently than their competitors. Their chargeable time is a little more; their charge-out rates are a little higher; their marketing is slightly more active; they convert a few more leads into clients; they bill slightly more often than most and their debtors days are slightly lower; their strategy is clear and they communicate a little more; and they train their staff slightly more than the average firm.

So, how are they performing slightly better across the full range of areas that make a firm successful? It begins with a clear vision for the future and then taking the time to implement change within their organisation: these changes, however small, have a dramatic impact on bottom-line profitability.

Embracing change and finding a solution to a firm’s issues can only be realised when firms are prepared to share their information in these invaluable surveys, recognise their weaknesses and hopefully some strengths, and devise a strategy for the future, taking the time or outsourcing help to implement change within the practice. What you cannot do is do nothing.

You may have noticed the word ‘do’ comes out a lot. Successful firms ‘do’ what they say they are going to and don’t just talk about it. It is the ‘doing’ that seems to make the biggest difference – hence the trade mark originated by Nike: ‘Just do it’.

Viv Williams is CEO of 360 Legal Group @360legal