Strategic Planning: It's Easier Than You Think

Every business needs a strategic plan. The whole process of strategic planning probably seems foreign to a small business, because most smaller entities relate this process to big companies. In reality, it’s the small business that needs to go through this process because they are less able to not only anticipate change, but to deal with it when it does occur. Although lawyers sometimes feel they’re different, they must at some point also admit -- their practice is a business.

The practice of law is different from others in that lawyers are professionals, have specialized skills, and have strict regulations on who is allowed to join their group – but they’re the same as all other business in that they have similar problems in day to day operations and are subject to the same forces that cause business to either succeed or fail every day of the year.

When larger firms put together a strategic plan, they usually go away somewhere for a few days and bring in an outside facilitator to lead the session, commonly called a retreat. Typically, the facilitator will spend considerable time interviewing key personnel within the business to help him set the tone of what they wish to accomplish. The facilitator then guides them through the process at the session– allowing the attendees to actually make the decisions themselves.

Making a strategic plan is like planning a trip when you know there will be detours along the way– you just don’t know where. You would plan the trip by mapping the route, fully aware you’ll have to make changes frequently. You don’t have to go to the extent that large companies do if you know what information you need to put together. This process can be accomplished by answering some really tough questions. Once answered honestly and with proper analysis, the small business will have the basis for their own strategic plan. Working the plan then is like taking the trip and dealing with the detours when they occur.

Following is a typical list of questions you can ask yourself to make your own strategic plan, and I have included some comments to offer some understanding on why these questions may be important.

This is the toughest question of all, because you can’t answer the next questions without knowing the answer to this one. If you’re taking a trip you have to know where you’re going. Likewise, in business, you must set a goal so you can make the plans to get there. Is your goal to earn “x” dollars per year? Is it to be recognized in your community as one of the finest lawyers? Is it to retire at age 50? Only you can supply the answer.

Profitability is a must for a successful business. Knowing how to recognize and then maximize profits in specific areas is critical. Research may find that certain practice areas are no longer viable or you may find they are extremely profitable.

5. How is my practice perceived by clients in my market?

6. Why do clients purchase legal services from me or my firm?

7. Why do clients purchase legal services from others in my market?

8. Who are my major competitors?

9. What are my competitors’ strengths?

10. What are my competitors’ weaknesses?

11. What are my strengths?

12. What are my weaknesses?

Questions 5 thru 12 relate to marketing efforts and your ability to survive in a competitive environment. Lawyers often have a different view of how they are perceived than the way they are perceived by their clients. This information can be especially useful in how you market your services to prospective clients. In any marketing effort, the emphasis should be on the results you can provide, rather than the process you go through to get the result. In a competitive environment your success will depend on your ability to provide something the other person can’t. Is it because of a rate difference? Is it because of past results? Is it because of a personal relationship? Is it because of better resources? Is the type of work highly specialized or is it routine?

13. What forces within my control could affect my law practice?

14. What forces outside my control could affect my law practice?

15. What are current trends in these forces?

Outside forces you can’t control could have a big impact on your practice. Government regulation and economic cycles are two that come to mind, particularly on certain segments of a law practice. If you provide services to Fortune 500 companies, changing conditions at that company, far beyond your control, can have a huge effect on your practice. Be aware of these possibilities, and diversify your practice in areas so you’re not totally dependent on one major client, client type or economic cycle.

16. What technology do I need to adequately serve my clients?

17. What technology will I need to adequately serve my clients?

18. What changes must I make to operate at the highest efficiency?

Technology is here to stay, and unless you embrace it and incorporate it, you may find yourself unable to provide efficient services. Clients of the future will be demanding the use of technology, and those firms who can’t provide it will find themselves without these clients. Stay abreast of changes, and upgrade your systems regularly. Through regular upgrading, your costs never become overwhelming, and you have less of a learning curve for your staff. If a client demands you use technology specific to them and you have limited work with them, tell them you need more work to justify the expense or inform them you can’t give them what they need.

19. Are my profits (income less expenses) increasing or decreasing and why?

Increasing revenues is always preferable to cutting expenses to reach profitability. Cutting expenses usually results in a diminished ability to provide the best services. Budgeting, controlling expense and planning for more revenue is the preferred management practice.

20. How can I be a better lawyer?

When you totally embrace the premise that your practice is a business, the technical part of your practice still needs attention. Keep yourself informed and up to date through your local and State Bar Association, and make a plan to attend a specific number of CLE sessions each year. Your product is you, and it needs to be the best to remain competitive.

Honest and thoughtful analysis of the above questions will take significant effort to finally reach a strategic plan for your practice. Once complete, you must review it regularly to be on top of what’s changing and how you should react.

Think of your plan as your map, and all the challenges as a detour. When you focus on the goal, then the route will be clear.

Paul J. Sullivan is an adjunct consultant with Olmstead & Associates, Legal Management Consultants, based in St. Louis, Missouri and the Office Administrator of Quinn Johnston Henderson & Pretorius with offices in Peoria and Springfield. He joined the firm in 1987. He is a member of the Law Office Economics Section of the ISBA; a member of the Association of Legal Administrators, and a charter member of the ALA Cyber Chapter. He is also past president and charter member of the Central Illinois Chapter of ALA. He is a regular contributor to the Law Office Management and Technology column in the Illinois Bar Journal, and has articles published in Legal Management, and the ABA’s “Complete Lawyer.” He has been a panel member in the Law Office Economics Breakfast symposiums, one of the moderators of the Law Office Economics Roundtable programs, and presented in ISBA Law Ed programs. He operated a successful business for over 10 years; was General Manager of an electronics firm, and held various Sales and Management positions with a major computer manufacturer. He received his bachelor’s degree from Western Illinois University.

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		Olmstead & Associates - *Legal Management Consultants*

.		Strategic Planning: It’s Easier Than You Think By Paul Sullivan Every business needs a strategic plan. The whole process of strategic planning probably seems foreign to a small business, because most smaller entities relate this process to big companies. In reality, it’s the small business that needs to go through this process because they are less able to not only anticipate change, but to deal with it when it does occur. Although lawyers sometimes feel they’re different, they must at some point also admit -- their practice is a business. The practice of law is different from others in that lawyers are professionals, have specialized skills, and have strict regulations on who is allowed to join their group – but they’re the same as all other business in that they have similar problems in day to day operations and are subject to the same forces that cause business to either succeed or fail every day of the year. When larger firms put together a strategic plan, they usually go away somewhere for a few days and bring in an outside facilitator to lead the session, commonly called a retreat. Typically, the facilitator will spend considerable time interviewing key personnel within the business to help him set the tone of what they wish to accomplish. The facilitator then guides them through the process at the session– allowing the attendees to actually make the decisions themselves. Making a strategic plan is like planning a trip when you know there will be detours along the way– you just don’t know where. You would plan the trip by mapping the route, fully aware you’ll have to make changes frequently. You don’t have to go to the extent that large companies do if you know what information you need to put together. This process can be accomplished by answering some really tough questions. Once answered honestly and with proper analysis, the small business will have the basis for their own strategic plan. Working the plan then is like taking the trip and dealing with the detours when they occur. Following is a typical list of questions you can ask yourself to make your own strategic plan, and I have included some comments to offer some understanding on why these questions may be important. 1. What is my ultimate goal? This is the toughest question of all, because you can’t answer the next questions without knowing the answer to this one. If you’re taking a trip you have to know where you’re going. Likewise, in business, you must set a goal so you can make the plans to get there. Is your goal to earn “x” dollars per year? Is it to be recognized in your community as one of the finest lawyers? Is it to retire at age 50? Only you can supply the answer. 2. What areas of my practice are most profitable and why? 3. What areas are least profitable and why? style='font-size:12.0pt'> 4. What changes must I make to increase profitability in these areas? Profitability is a must for a successful business. Knowing how to recognize and then maximize profits in specific areas is critical. Research may find that certain practice areas are no longer viable or you may find they are extremely profitable. 5. How is my practice perceived by clients in my market? 6. Why do clients purchase legal services from me or my firm? 7. Why do clients purchase legal services from others in my market? 8. Who are my major competitors? 9. What are my competitors’ strengths? 10. What are my competitors’ weaknesses? 11. What are my strengths? 12. What are my weaknesses? Questions 5 thru 12 relate to marketing efforts and your ability to survive in a competitive environment. Lawyers often have a different view of how they are perceived than the way they are perceived by their clients. This information can be especially useful in how you market your services to prospective clients. In any marketing effort, the emphasis should be on the results you can provide, rather than the process you go through to get the result. In a competitive environment your success will depend on your ability to provide something the other person can’t. Is it because of a rate difference? Is it because of past results? Is it because of a personal relationship? Is it because of better resources? Is the type of work highly specialized or is it routine? 13. What forces within my control could affect my law practice? 14. What forces outside my control could affect my law practice? 15. What are current trends in these forces? Outside forces you can’t control could have a big impact on your practice. Government regulation and economic cycles are two that come to mind, particularly on certain segments of a law practice. If you provide services to Fortune 500 companies, changing conditions at that company, far beyond your control, can have a huge effect on your practice. Be aware of these possibilities, and diversify your practice in areas so you’re not totally dependent on one major client, client type or economic cycle. 16. What technology do I need to adequately serve my clients? 17. What technology will I need to adequately serve my clients? 18. What changes must I make to operate at the highest efficiency? Technology is here to stay, and unless you embrace it and incorporate it, you may find yourself unable to provide efficient services. Clients of the future will be demanding the use of technology, and those firms who can’t provide it will find themselves without these clients. Stay abreast of changes, and upgrade your systems regularly. Through regular upgrading, your costs never become overwhelming, and you have less of a learning curve for your staff. If a client demands you use technology specific to them and you have limited work with them, tell them you need more work to justify the expense or inform them you can’t give them what they need. 19. Are my profits (income less expenses) increasing or decreasing and why? Increasing revenues is always preferable to cutting expenses to reach profitability. Cutting expenses usually results in a diminished ability to provide the best services. Budgeting, controlling expense and planning for more revenue is the preferred management practice. 20. How can I be a better lawyer? When you totally embrace the premise that your practice is a business, the technical part of your practice still needs attention. Keep yourself informed and up to date through your local and State Bar Association, and make a plan to attend a specific number of CLE sessions each year. Your product is you, and it needs to be the best to remain competitive. Honest and thoughtful analysis of the above questions will take significant effort to finally reach a strategic plan for your practice. Once complete, you must review it regularly to be on top of what’s changing and how you should react. Think of your plan as your map, and all the challenges as a detour. When you focus on the goal, then the route will be clear. Paul J. Sullivan is an adjunct consultant with Olmstead & Associates, Legal Management Consultants, based in St. Louis, Missouri and the Office Administrator of Quinn Johnston Henderson & Pretorius with offices in Peoria and Springfield. He joined the firm in 1987. He is a member of the Law Office Economics Section of the ISBA; a member of the Association of Legal Administrators, and a charter member of the ALA Cyber Chapter. He is also past president and charter member of the Central Illinois Chapter of ALA. He is a regular contributor to the Law Office Management and Technology column in the Illinois Bar Journal, and has articles published in Legal Management, and the ABA’s “Complete Lawyer.” He has been a panel member in the Law Office Economics Breakfast symposiums, one of the moderators of the Law Office Economics Roundtable programs, and presented in ISBA Law Ed programs. He operated a successful business for over 10 years; was General Manager of an electronics firm, and held various Sales and Management positions with a major computer manufacturer. He received his bachelor’s degree from Western Illinois University. Resource Center \| News Releases \| About Olmstead \| Services Provided \| Contact

Strategic Planning: It’s Easier Than You Think