As the legal industry grapples with the impact of the Covid-19 pandemic, it may seem premature for law firms, law companies and legal tech vendors to consider how best to compete once life returns to whatever ‘normal’ the future may hold. Yet life will go on – and all legal services businesses will need to equip themselves to survive (and thrive) in the post-pandemic environment.
In this series of short guest articles, professional services business development and marketing veteran Tim Haveron Jones, principal consultant at Provergence, explores three concepts that legal services businessesshould address now – so as to prepare for the highly competitive market landscape that is sure to follow the global crisis:
1. Strategic alignment
2. Market segmentation
3. Positioning and differentiation
Strategic alignment: are you all on the same page?
One of the more unexpected aspects of lockdown has been the way in which the webinar ‘chat’ window has replaced the conference drinks reception as a forum for bumping into old friends. And it was in just such a chat a couple of weeks ago that I met a former colleague whom I hadn’t seen for many years.
Over a follow-up Zoom call, we shared a few anecdotes about the ‘good old days’ – but when it came to discussing our current working lives, it was clear that all was not well with my friend. Not to put too fine a point on it, she was tearing her hair out in frustration at the lack of clarity in strategic planning at the firm where she now works.
“No matter what programmes we develop in the marketing and business development team, we always get ‘push back’ from fee-earners – and not because they don’t understand or buy into what we’re trying to achieve,” said my friend.
“Most times, they are really enthusiastic, and the leadership team is very supportive – but there always seems to be a reason why our plans can’t happen the way we want them to. It might be that we don’t have the right people, or there isn’t enough time, or some operational initiative takes priority. It’s not just that we’re not on the same page – sometimes I wonder if we’re all even reading the same book.”
The conversation reminded me that even in organisations staffed by very clever people – and legal services businesses certainly are that – some pretty dumb things can happen. In this case, it was clear that the firm had lost sight of the need for proper alignment of its three core strategy propositions:
1. A VALUE proposition that attracts clients;
2. A PROFIT proposition that enables money to be made out of the value proposition; and
3. A PEOPLE proposition that ensures that personnel are highly motivated and have the skills needed to deliver items 1 and 2.
In most legal services businesses, ownership of these three propositions sits in silos. Marketing or business development owns the value proposition; the profit proposition is owned by the finance and where applicable, operations teams; and the people proposition sits in HR. All perfectly understandable – after all, those functions are where the specialist skills reside – but a recipe for problems if they are not aligned.
For example, a firm might have a value proposition predicated on outstanding client service – but this can only work if the profit proposition allows sufficient bandwidth for fee-earners to devote time to building relationships as well as billing for work, and the people proposition ensures that personnel with the appropriate skills are on board. Conversely, a business model based on highly-leveraged, low-cost personnel may struggle to be effective if the value proposition promises a high-touch consultative approach and a high degree of customisation.
Of course, tension between the three propositions doesn’t mean that a firm will fail –but in what we expect will be a highly competitive post-pandemic world, it willalmost certainly perform less well than would be the case were the propositions properly in sync. In fact, conflicts between the three propositions will almost inevitably result in:
▪ Lower levels of client or customer satisfaction;
▪ Lower profitability; and
▪ Higher rates of employee churn.
Needless to say, all three will have a negative impact on the value that the organisation creates.
Close cooperation between leaders responsible for the three propositions will be beneficial to all of them, and to the business as a whole. Ideally, this should come from the top down, but even in the absence of a forum in which leaders of all functions are represented, progress toward alignment can be made.
Who knows, even a simple Zoom call with colleagues from other management functions might be a starting point toward better alignment, and a more successful firm in a post-Covid world.