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Building for the future - to successfully compete in a post-recessionary world Peter Scott PETER SCOTT CONSULTING Slide 2 PETER SCOTT CONSULTING Where are we now? Factors driving change A global economic downturn Technology Globalisation Clients changing needs Fragmented legal professions A need to become more competitive Slide 3 PETER SCOTT CONSULTING The greatest danger? - complacency! Our strategy is to keep a lid on expenditure and weather the storm. We cannot reinvent ourselves as something we are not Managing Partner of a major London law firm Autumn 2008 Slide 4 PETER SCOTT CONSULTING An alternative view there seems to be a disturbing strategy of hunkering down, cutting some fat and hoping that business will return to normal. That is not good. The terrain will look very different when this is over. This is not a minor blip, but a discontinuity the problem is that most senior lawyers think only two months ahead. They have no coherent picture of the future. The planning is not being done. And it is senior lawyers who need to be driving change Professor Richard Susskind May 2009 Slide 5 PETER SCOTT CONSULTING This is what one of the worlds largest law firms says you will see less of the crazy, untamed growth in many market areas. The growth will be slower. Staff numbers may be lower, and the rush to recruit will not come back Wim Dejonge Managing Partner, Allen & Overy, May 2009 Slide 6 PETER SCOTT CONSULTING Against this background how can law firms become more competitive? Competition is a process by which services that people are not prepared to pay for, high cost methods of production and inefficient organisations are weeded out and opportunity is given for newservices methods and organisations to be tried * Could this apply to the worlds legal professions today? * Everymans Dictionary of Economics Slide 7 PETER SCOTT CONSULTING Where are you now? What are the most important lessons you are learning from this recession? Slide 8 PETER SCOTT CONSULTING A chance to make a new start Which of those lessons will you use to build success for the future? Name one change which would make a greater difference to your firm than any other Slide 9 PETER SCOTT CONSULTING A chance to make a new start What should your partners be doing: - More of? - Less of? - Differently? Slide 10 PETER SCOTT CONSULTING Some key challenges for tough economic times Make good use of downtime Deliver business development Build loyal teams Manage partner performance Above all plan for the future (because yesterdays plans could be tomorrows disasters) Slide 11 PETER SCOTT CONSULTING Future challenges - focus on the fundamentals of your business What kind of firm do you want to be? Your clients Your people How you can achieve your goals Slide 12 PETER SCOTT CONSULTING Develop a realistic vision of the kind of law firm you want to be Slide 13 PETER SCOTT CONSULTING This will require leadership Thinking and visionary Challenging Inspirational A determination to implement change Slide 14 PETER SCOTT CONSULTING It is not the strongest of the species that survive nor the most intelligent, but the ones who are the most responsive to change Charles Darwin The Origin of Species Managing change Slide 15 PETER SCOTT CONSULTING There may never be a better time to face up to your sacred cows Slide 16 PETER SCOTT CONSULTING is a process of finding out: What your (current and prospective) clients value What your partners value to i dentify the key skills and behaviours which will enable the consistent delivery of your value proposition Developing a strategic vision in a law firm partnership Slide 17 Your clients Slide 18 PETER SCOTT CONSULTING Do you know what your clients value? Do you ever ask them? They always try to sell to us on price but what we really want is to have a good job done at a reasonable price Client feedback from a perception survey commissioned by a law firm Slide 19 PETER SCOTT CONSULTING Your clients needs? What services are our clients (and our prospective clients) going to need once this recession has ended? Will these areas of work be profitable in the longer term? How will our clients require their legal services to be delivered? Slide 20 PETER SCOTT CONSULTING Core issue to add value Needs to be value clients care about - clients perspective - not yours In a way which is regarded as valuable by clients More than the competitors Slide 21 PETER SCOTT CONSULTING A value gap? It is the clients perception of value that matters Lawyers put too much emphasis on service attributes Not enough on helping clients achieve results Slide 22 PETER SCOTT CONSULTING You will add value to clients if You provide clients with what they want and more At prices they perceive to be value for money; and You do this better than the competition Slide 23 PETER SCOTT CONSULTING How are you going to position your firm to provide added value? Client Perceived Added Value Client Perceived Cost Cranfield University, School of Management High Low Ave X Suicide Zone Slide 24 PETER SCOTT CONSULTING Which clients do we wish to keep if we are to position our firm in this way? Are all our clients profitable? Which clients are cash generative or are draining us of cash? Which clients are risks? Slide 25 PETER SCOTT CONSULTING How can you find out what clients value? Ask them Who has commissioned a survey of clients and referrers? Do your clients say you are adding value? Slide 26 PETER SCOTT CONSULTING Finding out what your clients value will identify the key skills and behaviours which will enable the consistent delivery of your value proposition But are your people prepared to adopt the values and behaviours necessary to enable your firm to do so? Do you know and fully understand the internal attitudes in your firm? Slide 27 Your people Slide 28 PETER SCOTT CONSULTING An integrated strategy is required External perceptions Internal attitudes Slide 29 PETER SCOTT CONSULTING Your people Their values Why high performance has never mattered more Slide 30 PETER SCOTT CONSULTING Your partners How are we going to become sufficiently profitable to be able to recruit and retain the best? Do we have the right partners on board to help us to achieve our goals? Slide 31 What do your partners really value? Slide 32 PETER SCOTT CONSULTING Your values? What is valued in your firm? Do you reward what you value? Do you invest in what you value? What does it take to succeed at your firm? Slide 33 PETER SCOTT CONSULTING Is this a block on business development? The only thing this firm values is personal billing Slide 34 PETER SCOTT CONSULTING Sharing clients Is it valued in your firm? Is it measured? Is it rewarded? (What gets rewarded gets repeated) Slide 35 PETER SCOTT CONSULTING Why should I? Share my clients with my partners? What good will it do me? I will not earn any more whatever good things I do Slide 36 PETER SCOTT CONSULTING Internal attitudes - but why should I? To do this may require a shift in culture There will be a need to build a culture of sharing Slide 37 PETER SCOTT CONSULTING Are internal attitudes in your firm holding you back? Are you presently unable to add value to your clients because of internal attitudes and behaviour? Slide 38 PETER SCOTT CONSULTING Is a lack of internal skills holding you back? Do all your people have the skills necessary to enable your firm to achieve its goals? Slide 39 PETER SCOTT CONSULTING Values Skills & Behaviours Performance MetricsQuality/Quantum Performance Review Closing the Performance Gap Learning & Development Strategy Building higher performance Slide 40 PETER SCOTT CONSULTING Building higher performance The market place and your competitors set the standards Do you want to be a player in your market? If you really want to compete - need to build a CULTURE OF HIGHER PERFORMANCE - Need to examine WHAT KIND OF FIRM YOU WANT TO BE Slide 41 PETER SCOTT CONSULTING Building higher performance What criteria and standards will you apply in agreeing performance levels with partners? Slide 42 PETER SCOTT CONSULTING Performance standards Your market place sets the standards Align your performance standards with your firms objectives - to enable the firm to COMPETE - to help the firm achieve its VISION Slide 43 PETER SCOTT CONSULTING How to get the best out of your people? Help them maximise their full potential This will require investment in your people Slide 44 Are you investing sufficient in your people to realise their financial value to your business? Slide 45 PETER SCOTT CONSULTING Investment in your people requires? - Leadership and vision - Values - Training - Mentoring - Coaching - Empowering - Supporting Slide 46 PETER SCOTT CONSULTING Do you have transparent partner admission / progression processes? Do you have an associate / partner development programme in place? Do you ask your people about their career ambitions? Do you focus your investment in people to advance your and their objectives, rather than sheep- dipping people through training courses? Slide 47 PETER SCOTT CONSULTING Investment in your people? For example Who has a New Partner Programme designed - - to bring people through to partnership? - and which continues throughout partnership? Slide 48 PETER SCOTT CONSULTING You have developed a realistic plan, but How are you going to achieve your goals? will you have the resources on your own to achieve your goals? Slide 49 PETER SCOTT CONSULTING Resources to enable the new firm to Attract and retain the best talent Slide 50 PETER SCOTT CONSULTING Resources to enable the new firm to Provide clients with the depth and breadth of expertise they will require, where and when they will need it Slide 51 PETER SCOTT CONSULTING Resource to enable the new firm to Build the quality management which will be required to successfully compete in the future Slide 52 PETER SCOTT CONSULTING How are you going to use your membership of State Capital Group to help you achieve your goals? Slide 53 PETER SCOTT CONSULTING Are you using State Capital Group to.. Provide you with greater reach / access to new and larger markets - - Geographic? - Sectors? - More quality client types? - More premium work types? Share knowledge / clients? Slide 54 PETER SCOTT CONSULTING How are you going to achieve your Vision? Slide 55 Any questions?