By Patrick J. McKenna and David J. Parnell

Robin Sieger, world-class motivational expert and author of Natural Born Winners, once said, “planning is as natural to the process of success as its absence is to the process of failure.” That said, he forgot to add that planning doesn’t mean a heck of a lot if nobody bothers to oversee or implement those meticulously formulated aspirations. Such is the world of law firms and their strategic planning efforts as exposed in a survey we conducted in preparation for presenting at the recent Chief Strategy Officer’s Summit in New York City.

We canvassed and received detailed feedback from 68 firm leaders, mostly from AmLaw ranked firms, on their approach to strategic planning and their specific responses to 18 questions covering everything from who was involved in developing their current strategic plan and how long it took, to how satisfied they were and what they would change with respect to their efforts in the future.

We found that, overall, there is no lack of formal strategic planning going on within today’s law firms. Only 2.9 per cent of our responding firms reported that rather than have a written plan they “preferred to remain flexible and opportunistic.”

We concluded that 70.4 per cent of all firms invest, on average, at least three months in the development of a formal written strategic plan. That investment usually involves the members of firm leadership, involvement of the executive committee or board, and often times those participating on a specially constituted planning committee – in other words, some of the most senior and expensive talent in the firm in a series of lengthy meetings over a number of months, with hours of preparation and homework in between each meeting.

Larger firms invested the most time on strategy. Of those spending more than six months developing their plans, 44 per cent were in the 301-500-attorney category, and 33 per cent were in the over 500-attorney grouping. By our estimates we believe that law firms, especially these larger ones, easily invest about a quarter of a million dollars in partner time.

We asked firms how they might describe their final strategic planning document as to whether it was “brief and targeted to a few priorities” or “lengthy and comprehensive.” The majority, 57.6 per cent of all respondents, told us that it was brief and targeted to a few priorities, but interestingly that percentage decreased as the size of firms increased.

The most popular technique across the board for preparing plans, 62.5 per cent, was to gather input from practice groups. Another 53 per cent said they surveyed their partners, but the larger the firm the less likely it was to involve the partners – 27 per cent among the 301-500-attorney grouping, and 20 per cent among the over-500. Half of the firms hired a facilitating consultant.

What the grouping of largest firms did do more than the others was involve their clients in the strategic planning process. On average, 45.3 per cent of this group interviewed or surveyed clients when developing their final plan (we do not know how many clients were involved), while only 18 per cent in the 301-500-attorney grouping did so.

We asked whether the firms categorized their plans as “heavily internal” or “heavily externally focused.” We explained that “Internal would include website, human resources, pricing, billing and collection policies, and similar activities, while External would involve differentiation efforts, emerging areas of practice, new client service practices, merger possibilities, etc.” It is a strongly held view that a heavily internally focused plan is really operational in nature while being externally focused defines true strategic intent. That all said, the responses we received evidenced only 19.7 per cent of these law firms having a heavily external focus to their final plans, with the larger firms being more likely to do so.

Despite spending months of time and thousands of dollars in partner resources to develop a strategic plan, when asked how much of it had been implemented, only 3.2 per cent of firms checked the “almost all” box.

It would appear that far too many law firm leaders suffer an affliction that goes by the sophisticated technical term: seeing SPOTS. SPOTS being an acronym for Strategic Plan On The Shelf!

Just over one-third (36.4 per cent) of firms said they rarely or never reviewed their plans, and an equal percentage said they did so every year. An average of 12.7 per cent of firms said they reviewed their plans several times a year.

We listed 13 different strategic planning elements and asked the firms to assess their level of satisfaction with each. The three elements that were rated by all firms as being areas of Highest Satisfaction were: “the overall process for creating their final strategic plan,” followed by “attracting lateral talent and complete practices,” and “improvements to firm profitability.” These responses varied slightly by firm size with “expansion of geographic footprint” rating highly among all firms over 300 attorneys in size. If one were skeptical one might add that first, it is good that these firms were satisfied with the process as it was expensive and outrageously so, given the lack of implementation success; and secondly, isn’t almost every firm focused on attracting laterals or exploring merger opportunities and did you really need to invest time in putting that one into your formal plan?

The areas that invoked the strongest dissatisfaction and were consistently expressed by firms of all sizes were “implementation with designated responsibility and timelines” followed by “efforts to develop entirely new practice areas” and “practice group involvement.”

The one question that invoked some interesting reflections on the part of every firm we polled was this one: “What one thing would you change with respect to your strategic planning efforts in the future?” What we heard were some common themes especially when viewed by firm size:

From firms of under 300 attorneys:

• “gather more external information, make it more externally focused, especially when considering the impact of new competitors;”
• “we need more frequent reviews, routine updating, a constant assessing of the need for tweaks and resets, and adherence to the plan”
• “more partner involvement at different levels within our firm, and buy-in from key shareholders”
• “we need to focus more on clients and should conduct client interviews.”

From firms of 301 to 500 attorneys:

• “we need far more flexibility to adapt and revise when necessary;”
• “take less time in the planning but make it an ongoing process;”
• “there needs to be greater education and awareness of market changes and new developments;”
• “we need to include more additional external perspectives in our planning process."

From firms of over 500 attorneys:

• “better action / implementation items with specific timelines, deadlines and accountability;”
• “less internal and more focused external strategies;”
• “far more time invested in looking to the future and consideration of industry disruptors.”

SOME SURVEY OBSERVATIONS

In conducting this survey we attempted to cross-correlate the various responses by firm size and results in an effort to ascertain some helpful findings and conclusions. Here are a few that jumped out at us:

• Those firms that found some way to involve a majority of their partners or the entire partnership also claimed to have actually implemented more of their formal plan.
• Only two of the firms that participated in our study employed a Chief Strategy Officer and both of those firms also involved an outside consultant in the development of their last strategic plan.
• While 50 per cent of the respondents reported having used an outside consultant as a facilitator in some manner, there was no correlation between hiring a consultant and successful implementation.
• Those firms who claimed to have reviewed their plan several times a year also claimed to have implemented more of their plan.
• The majority of those firms who experienced the highest level of satisfaction with their planning process also had the most internally focused plans and implemented the least.
• Those firms reporting that they were very satisfied with “partner buy-in” were also highly dissatisfied with their implementation efforts.

SOME SURVEY CONCLUSIONS

What does it take to build a successful strategic plan that has a hope of being implemented and won’t simply languish on some firm leader’s shelf? Here are a few of the key suggestions that seemed to radiate from our survey findings:

1. Too many firms are focusing too much of their attention on internal issues.

Internal focused plans centre on making improvements – things like enhancing morale and efficiencies. They do not focus, for example, on winning in a competitive market. Will predictive analytics, artificial intelligence, robotics and automation replace many of the things that lawyers traditionally were paid to do? To remain competitive in tomorrow’s marketplace law firms may need to embrace external and disruptive innovations. From a number of the survey respondents we heard things like: “We need to more effectively think about the upcoming changes in the legal practice and innovation techniques to enable us to continue to hit above our weight.”

Think of it as tackling opportunities rather than simply problem-solving – focusing on the future versus the present.

2. More firms need to find a method of drawing the client’s voice into the development of their firm’s strategy.

We were especially pleased to see that simply by posing the question of whether your planning process involved listening to clients, we stimulated numerous firms to share comments like this one: “We need to go back to using client surveys. We had done this with precious strategic plans but not in the most recent, which was a mistake.”

Your strategic plan is all about determining the firm’s direction, making choices about where you are going to invest your limited resources, and what you are going to become in the future. We believe your clients may have some important insights to share that would assist you in developing the most relevant plan.

3. If the planning process could involve more of the partnership there may be better implementation success.

One firm leader told us about how he would prefer to make the strategy process less democratic, with the executive committee developing the plan and obtaining buy-in by the entire partnership. While that might sound ideal, and certainly at first blush appear to be less time-consuming, the reality from our in-depth discussions with many firms over the years is that it rarely works. If anything, the time is then not spent on developing the strategy but in trying to sell it to your partners.

Think back to the last time you might have purchased a little piece of supposedly easy-to-assemble furniture from IKEA and the hours you spent trying to put the bloody thing together. Your final result could be the wobbliest little end table in your residence but damned if you will ever part with it. Why? Because you created it; it’s your baby. And that is the natural way we all feel about something we helped create.

So too with any new idea, initiative, project or formal plan. If your partners can’t see their fingerprint somewhere on the final product, it becomes highly unlikely that you will be able to easily sell it to them.

4. The implementation of strategic plans requires far more rigorous management attention and personal accountability.

We heard it said that once your plan is developed, implantation may not be a full-time occupation, but should be a full-time preoccupation. The lifeblood of implementation is accountability. And accountability involves clarity on who is on the hook for doing what.

One firm we heard from told us about their monthly implementation meetings and their quarterly “recalibration” sessions. The monthly implementation meetings were where the initial Strategic Planning Committee, now reformatted as the Strategic Implementation Committee, reviewed the various actions, timelines, responsibilities and ensured that progress was continuing to be made. The quarterly recalibration session was intended to review the next quarter’s priorities, the external changing reality and make modifications or course corrections where and if needed. Thus their implementation process was an ongoing work in progress.

These suggestions should help any firm avoid “benign neglect” and help everyone on the firm understand where the firm is going.

Patrick J. McKenna is an internationally recognized author, lecturer, strategist and seasoned advisor to the leaders of premier law firms; having had the honor of working with at least one of the largest firms in over a dozen different countries. He is the author of eight books most notably his international business best seller, First Among Equals, currently in its sixth printing and translated into nine languages. His most recent work, The Changing of the Guard, Second Edition (Ark Group, 2017), provides in-depth guidance on the leadership selection process in professional firms. Reach him at www.patrickmckenna.com.

David J. Parnell is a BigLaw search and placement professional, a Columnist for Forbes & American Lawyer Media and author of The Failing Law Firm: Symptoms and Remedies. Read his various columns and interviews with law firm leaders at: http://www.forbes.com/sites/davidparnell.