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Strategic Planning for Law Firms: Defining, Setting and Achieving Your Firms
Goals

Megan Glasheen
Managing Member
Reno & Cavanaugh, PLLC

I. Why a Strategic Plan?

In preparing for battle I have always found that plans are useless, but
planning is indispensable. Dwight D. Eisenhower

Formal strategic planning provides a focus and a structure to use to discuss the
future of your business with your partners, create a plan for growth or
continued success and provide management direction for employees. In my
view, a strategic plan is a useful to help guide decisions, but it should not be a
static documents. It is important that any business be adaptable to change to
survive. Adherence to plans without regularly updating them to recognize
changing realities will not work.

II. Strategic Planning Models

1. SWOT Analysis This model looks at the Firms strengths, weaknesses,
opportunities, and threats in an organized and deliberate way. The results
of a SWOT analysis can vary. Some firms might decide the best course is
to build on their strengths and follow opportunities that play to those
strengths. Others might find that answer insufficient for their purposes
and devise strategies designed to overcome identified weaknesses to
enlarge their opportunities. A list of SWOT questions is attached to this
outline. An example of a SWOT analysis applied to a hypothetical law
firm might look like this:

Strengths Opportunities
lawyers with deep technical expertise
good reputation in state
Strong support systems

big client expanding operations in region
regulatory changes expected in key areas

Weaknesses Threats
no clear business development leaders
increasing lawyer dissatisfaction with
work hours
poor record on diversity of workforce
national law firm expanding to region
clients are looking to lower costs
clients are pressuring for diversity
Print
Program Agenda
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2. Gap Analysis Approach This approach asks the Firm to articulate the
difference between where it is as an organization at the initiation of the
planning process and where it wants to be in the future. Using this method,
the Firm would identify a set of Firm objectives, spot the gap between the
objectives and current reality, articulate various options for closing the
gap, and set a course of action that the organization determines will most
effectively align objectives and reality.

3. Porters Five Forces Model The five forces model looks at the
connection between a Firms environment and the industry in which it
competes. The five forces are (1) the risk of new competitors entering the
industry, (2) the threat of potential substitutes, (3) the bargaining power of
buyers, (4) the bargaining power of suppliers, and (5) the amount of
rivalry between the existing competitors. Applied graphically to a law
firm, the model might look like this:





SUPPLIERS

Example:
It is hard to attract
top talent in City X

SUBSTITUTES

Example:
Clients are hiring
in-house counsel
with more
frequency
BUYERS

Example:
Clients have more
choices
POTENTIAL
ENTRANTS

Example:
Big law firm just
opened office in
City X
INDUSTRY
COMPETITORS

Rivalry among
Existing Firms
Bargaining
Power
of
Suppliers
Bargaining
Power
of
Buyers
Threat of Substitutes
Threat of new Entrants
Formatted: Centered
Formatted: Centered
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4. Appreciative Inquiry Model The appreciative inquiry model was
developed in reaction to perceptions that previous planning models started
with a negative problem solving approach, rather than a positive
approach that appreciates the Firm. Appreciative Inquiry uses a 5-D
model whereby the Firm breaks the planning process into five distinct
phases. In the first phase, the organization defines the topics to learn more
about, such as marketing or recruitment, and refines the issues to be
examined. The second stage is the discovery stage, which identifies what
the Firm is doing when it performs at its best. The third stage is the dream
phase when the group envisions what the future would look like based on
the Firms strengths and core values identified in the previous phase,
which segues into the design phase in which the Firm articulates the
building blocks for implementing the Firms vision. The last segment is
the delivery phase during which the vision articulated by the group is put
into action. Graphically, the AI approach applied to a law firm might
look like this:









D Dr re ea am m
Envisioning
Results & Impact
Example: The IP practice has
really clear processes and
standards, lets apply that
concept to the rest of the firm.
D Di is sc co ov ve er ry y
Identify the key elements at play
when the firm is at its best
Example: Our Intellectual
Property (IP) practice is really
strong. They do high quality work
within deadline and have a
wonderful esprit-de-corps.
D De es si ig gn n
Outline the future together
Example: Lets ask practice
leaders to define areas of
standardization and clearer
processes in their areas.
D De el li iv ve er ry y
Sustaining the change
Example: Lets check in with
practice managers and do
attorney surveys by practice
area to see how things are
going.
P PO OS SI IT TI IV VE E C CO OR RE E
D De ef fi in ni it ti io on n
Identify Areas of Inquiry:
What can we do to equalize
the quality of work and the
work experience at Law Firm
X?
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5. David Maisters Fast Track Strategy This action-oriented approach
dispenses with the time it can take to articulate the goals of a law firm
because it is based on the theory that all professional service organizations
have the same goals: (1) raising the satisfaction of clients, (2) increasing
the skills within the organization, (3) improving the productivity of the
firm, and (4) getting better business. The aim of the process is for the
participants to prepare an action plan for each goal that articulates specific
proposed actions, identifies who will be accountable for each of the
identified actions, determines how much time will be spent on each
activity, deadlines, and how to determine the action is complete. This is
how Maisters approach looks, taking just one example and applying it to
a hypothetical law firm:


Increase Skill Building
ACTION
PERSON
RESPONSIBLE
TIME
REQUIRED
DUE
DATE
INDICATOR OF COMPLETION
1. Create internal
attorney training
program
Mary 25 Hours 3/1/06
A. A detailed training
schedule for the year
B. Survey attorneys on
usefulness of trainings at 6
months
2. Train
paralegals in
areas that support
lawyers
John 25 Hours 3/1/06
A. A detailed training
program for year
B. Survey paralegals on
usefulness of training

3. Increase
coaching abilities
of partners and
senior attorneys
Eloise 50 Hours 4/15/06
A. Design and hold training
on coaching others with
outside expert
B. Have partners and senior
lawyers hand in a quarterly
coaching report detailing
what feedback and coaching
activities theyre engaged in









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6. Continuous, Decision-Oriented Planning This approach, discussed in the
January 2006 edition of the Harvard Business Review, attempts to respond
to criticism that traditional strategic planning does not produce high-
quality organizations because plans can get stale quickly, stifle creativity
and entrepreneurialism, and sometimes ignore the elemental fact that the
business environment is constantly changing. Instead of tackling the
Firms challenges and opportunities all in one big plan, the Firm would
look at issues in small bites and make decisions in smaller increments
rather than one, unified strategy. Under this model, issues are identified in
the beginning of the year, and identified teams research and prepare
analyses of options, which are then acted upon by the leadership on a
regular basis. Taking a hypothetical law firm, this model might look like
this:



Q3 Q4 Q1 Q2 Q3 Q4
Annual
Strategy
Update

Budgets, Capital plans, and Operating plans are updated continuously.


Budgets and plans are updated.


preparation issues 1 & 2
Managing Partner or executive committee makes decisions about those
issues



preparation issues 3 & 4



Management moves on to next
two issues.

preparation issues 5 & 6

preparation issues 7 & 8

preparation issues 9 & 10

Task forces prepare
information about issues;
for example,
issue 3: increase capacity
of tax department
issue 4: increase diversity
of workforce




III. Who Should Participate?

1. Partners The owners of the business should obviously participate to the
greatest extent possible so that something meaningful and lasting comes
out of the process. In our case, the partners each answered the attached
work sheet, met with the consultant to talk about the answers,
implications, and which aspects to seek further views from others at the
Firm. We also looked at our organization arrangement and made revisions
to our management structure to accommodate our goals.

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2. Attorneys We are a small Firm, so we included all attorneys in a day-
long retreat looking at specific issues regarding internal management
structure and external business opportunities. The consultant we worked
with also met with the non-partner attorneys as a group to surface issues
that might not be raised in the presence of the partners, but which should
be addressed for long-term organizational health.

3. Paralegals We see paralegals as an integral part of our business. For us
to build a strong organization capable of handling the work we plan to
generate over the next few years, our plan needed to address internal
organization and create a workplace that people feel good about. Toward
that end, the paralegals talked to the consultant as a group and provided us
with issues to address in our strategic plan. The paralegals also
participated in the internal management portion of the retreat.

4. Other Staff We think a strong support staff is essential to a well run law
firm. Like the paralegals, the support staff talked to the consultant as a
group and provided us with issues to address in our strategic plan.

IV. Some Tools Our Firm Uses to Develop the Vision and Keep on Track

1. Even before initiating a formal strategic planning process, we found it
important to articulate basic expectations about work habits, client service,
and work product in a written manual, which we call the Style Manual.
Since adopting the Style Manual, we have seen vastly improved
performance from associates everyone starts on the right track.

2. We used the SWOT approach and as time has progressed, we have layered
the David Maister fast track method with it for bringing issues forward
in subsequent years. When we started the process (about two years ago),
we used a consultant who worked with the partners first on the questions,
which are attached to this outline. The consultant then identified key
questions for the rest of the firm after reviewing the partner SWOT
responses and interviewing key staff. The questions, which focused on
internal decision making, work-life balance, management priorities for the
upcoming year, and external business development issues, were then put
to the group during an off-site retreat. The consultant provided us with a
report that described the decision making issues we tackled, input on
management priorities for the coming year, and our first set of ideas on
business development strategy to build from.

3. I interview people yearly based on David Maisters Rate Your Work
Experience and monitoring supervision questionnaire. Management uses
those results to adapt management approaches. The questionnaires are
available on his website, which is listed later in the materials.

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4. We set yearly goals for individuals and for the firms management. The
goals include management investment items (such as implement new
phone system) and strategic items (such as develop new business in
particular areas.) This year we added personal non-career goals (i.e. go
to the gym at lunch) to goal setting to provide a platform for helping
people achieve work-life balance. We send out quarterly updates on where
we are and meet to discuss status as a group when appropriate.

5. We have been emphasizing accountability, constructive evaluative tools
and improvement measures, and we have restructured to reinforce
expectations.

6. We involve associates in the management committee and all levels of the
firm in specific task oriented committees.

7. We use our technology to understand what is really happening at the Firm
and how people are spending their time.

8. We look at where we are competitively on a yearly basis.

V. Implementing Your Firms Vision as Articulated in a Strategic Plan or
Similar Process

1. No matter how you get there, the people who make up a firm need to
know that the organization has a vision and a future. The role of a Firm
leader is to be clear about the vision and the objectives.

2. Include as many people as possible in the vision so that you are truly
creating a firm culture.

3. Be outcome oriented and resist the impulse to micro-manage. People
perform better and come up with more creative, effective solutions when
you trust them.

4. Publish results internally let people know how things are going.

5. Check in internally and adjust periodically quarterly or semi-annually.

6. Be willing to reconsider approaches when they are clearly not working.

7. Holding people accountable (no matter where they are on the Firm food
chain) for their promises and to perform to expectations. It is not nice to
let commitments slip unnoticed. (Read David Maisters article Strategy
and the Fat Smoker, which is on his website.)

8. Use objective tools to monitor results, but use your brain to evaluate them.
For example, if someone has lower billable hours than they should, look at
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what they are doing with the non-billable time. Is it serving the Firms
goals?

IV. Strategic Planning Resources for Law Firms


Books/Periodicals. None of the books below focus solely on strategic planning,
but most look at law firm or professional firm management as a whole, and include
strategic planning.

1. Abbott, Ida O. Lawyers Professional Development. Washington:
National Association for Law Placement, Inc. 2002.
2. Buchanan, Leigh, and OConnell, Andrew. A Brief History of
Decision Making. Harvard Business Review January 2006: 82-83.
3. Dunn Paul, and Ron Baker. The Firm of the Future. Hoboken: John
Wiley & Sons, Inc. 2003.
4. Gerber, Michael E. The E Myth Revisited. New York:
HarperCollins, 2001.
5. Lencioni, Patrick. The Five Dysfunction of a Team. San Francisco:
Jossey-Bass 2002.
6. Maister, David H. Managing the Professional Service Firm. New
York: Free Press, 1993.
7. Maister, David H. Practice What You Preach. New York: The Free
Press, 2001.
8. Maister, David H. True Professionalism. New York: The Free
Press, 1997.
9. McKenna, Patrick J., and Maister, David H. First Among Equals.
New York: The Free Press, 2002.
10. Rath, Tom, and Clifton, Donald O. How Full is Your Bucket? New
York: Gallup Press, 2004.
11. Tupman, Simon. Why Lawyers Should Eat Bananas. Byron Bay:
McPherson, 2002.

Websites

1. www.davidmaister.com.
2. www.hildebrandt.com
3. www.altmanweil.com
4. www.joelarose.com
5. www.lawyerswithalife.com
6. www.abanet.org/lpm/home.shtml
7. www.lawyerswithalife.com
8. www.lawyerslifecoach.com
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Goals and Values Worksheet
(Strengths, Weaknesses, Opportunities, and Threats)


1) Our firm name is recognizable in the _______community Why?

2) What do you feel is our mission?

3) What do you feel are the three core values of our firm?

4) What attracts and retains clients to our firm?

5) What attracts and retains our employees?

6) Outside of our current practice areas are there other practice areas that could
complement our current practice?

7) What are the reasons we have eliminated or reduced practice areas in the past?

8) What is the image we want to project in the market? Are we doing it? If so, how
are we doing it?

9) Does the firm spend enough, too little or too much on marketing, advertising,
and business development? Why?

10) Who are our closest competitors and how has our position in comparison
changed in terms of size, economics, and reputation in the last year

11) What size should we be 1 year and 3 years from now and how do you think we
will get there (natural growth, lateral, merger/acquisition)?

12) What should be our strategy for managing to our ideal size? How should it be
structured?

13) What do you think our targets should be in terms of revenue and partner
compensation?

14) What should be our strategy for acquisition and use of technology in our
practice?

15) How are we positioned to endure changes in economic cycles? What do you see
as our growth market strategy? What do you see as our down market/recession
strategy?

16) As partners, what are the main weaknesses you think we should focus more
attention on internally? Externally?
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