Guest Blog: Doing Nothing is No Longer an Option For Law Firms
In analysis / By Bill Kirby / 05 November 2018
This week, we have another guest blog from Bill Kirby, Consultant at Professional Choice Consultancy. This time Bill talks about the uncertainty felt in the legal sector and beyond and how doing nothing is no longer an option.
There have been significant challenges in the legal sector over the course of the last 10 years and we're about to enter another uncertain period which is sure to add to issues such as profitability, working capital, client demands, competition and security into the mix.
Despite all of this – and it just doesn’t apply to law firms – in many businesses, throughout the whole management structure there is a lack of proactivity and a drive to make things happen. Many managers still tell you what has happened, what you already know, rather than what actions are being taken to achieve or exceed objectives and targets going forward.
The age of inertia is over
I am afraid lack of proactivity and “inertia” needs to come to an end and right now. The definition of inertia is “ a tendency to do nothing or to remain unchanged” and going further: inactivity, inaction, inactiveness, inertness, passivity, apathy, accidie, malaise, stagnation, dullness, enervation, sluggishness, lethargy, languor, languidness, listlessness, torpor, torpidity, idleness, indolence, laziness, sloth, slothfulness.
We don’t want that sort of recognition for ourselves, any of our staff and more importantly the management team, do we?
Whether we like it or not your law firm is a business that requires:
- Strategy – growth and services definitions
- Performance - profit and cash
- Culture change – management and accountability
- Client demands – performance and communication
However, the major challenges facing all law firms are:
Working Capital, planning, budgeting, forecasting, achievement, billing, gross profit, net profit, business development – new and existing clients, client satisfaction, competitors, compliance & regulation, cyber security, IT exploitation – plus of course legal capability. This requires proactivity from the whole team. The most important thing needed to succeed is an attitude of making things happen.
We know all this from the experience of as many as 350 firms going bust annually, our own experiences, plus the surveys I have referred to in previous articles such as PWC for the Top 100 firms, LPM for those with £1million - £20million turnover.
For the first time, many of the larger firms have admitted more competition, price pressures, cost pressure, working capital shortfalls, resourcing pressures – peaks, troughs, skills, margin pressures and risk from cyber and compliance. The needs are becoming obvious but too many people in positions of power don’t necessarily want to commit to changing working methods as their personal return is not obvious. However, it could be too late when it does become obvious.
The smaller firms have suffered for longer and many have been making changes but not all are grasping the importance. Many still see IT expenditure as a cost and an inconvenience. Many don't even know where to start, but proactive management would be a good start.
On the other hand, there are others that are leading the way with change and I can cite as one example Keystone Law who have adopted:
- Outsourced/Hosted IT with Nasstar
- Providing availability, Security, Predictable Costs, IT Focus on added value
- Outsourced Document Production
- To eliminate peaks and troughs, removal of backlog, availability of skills, major cost savings
- Outsourced Telephone Answering
- Availability for communication, 24x7x365, Easter and Christmas, resource and cost saving, better reception
No wonder MLS Advantage suppliers are doing so well, Moneypenny with c1,000 law firms using its services, Document Direct suggesting savings of c£30k pa per document producer (imagine London) as well as the speeds, Nasstar with potentially 50-60% of firms going hosted in the next few years and Matrix247 for hosted telecoms and secure mobiles.
We cannot afford inertia around reviewing and adopting these sorts of approaches, the time to act is now.