The study revealed that:
- Smaller practice owners are business owners as well as solicitors, and this requires different skillsets, including legal and business management skills,
- The business model of smaller practices needs to evolve in response to the more demanding and ‘instant’ current business environment,
- New organisational structures are worthy of consideration, yet will require a planned and cautious approach to increase access to additional resources (such as locums, etc) to widen/deepen specialisms, client base and sectors, and diversify service lines,
- Smaller practices face similar challenges and opportunities that are common to business owners and SMEs in other sectors.
- The study resulted in 11 recommendations, with an onus on both the Law Society and the individual practices themselves to consider the recommendations, engage with each other, and be willing to embrace change.
Recommendations 1 and 2 on the future-proofing and sustainability of smaller practices focused on the need for practices to move away from a reliance on referrals for generating business, and to introduce a more diverse set of business development activities.
Practices should prioritise a planned approach to future practice growth and sustainability. A key tool for SMEs in any sector is a ‘growth strategy’, which – if used correctly – should create a clear path for the future growth of the practice.
Small practice support
As a follow-on from the study, Crowe was engaged by the Law Society to provide support in implementing the recommendations. The work has included the development of a number of bespoke tools and templates for smaller practices, such as a marketing and client communications workbook, a networking guide for small practices and, importantly, a growth strategy workbook available on the Small Practice Business Hub.
A ‘growth strategy’ is a formalised document that describes the short to medium-term growth goals for a practice, and the actions needed to achieve them. It is the result of a systematic process that helps a practice understand its current business profile and identify its future ambition in terms of the level and pace of growth it wants to achieve, and the rationale for doing so.
The growth strategy workbook is one of the core supports that the Law Society has developed for smaller practices. It aims to outline the growth path for the practice and the actions, resources, and strategy required. It will assist practices in moving from operationally led thinking to future and vision-focused thinking.
It also aims to:
- Drive productivity through better work practices and systems,
- Identify current and emerging business trends in order to enable a practice to be dynamic and responsive,
- Identify competitive advantages that a practice can build on through the creation of competitor profiles,
- Help to identify, analyse and manage business risks, and
- Increase staff engagement and motivation by outlining actions to be completed.
As part of the development of the workbook, Crowe piloted it with five smaller practices. Consultation took place with each practice principal. The feedback highlighted that, for practices with a growth ambition, the workbook is a useful guide for what is a challenging process.
A key finding from the consultation was that practices would welcome support when working through the workbook. In response to this feedback, the Law Society will be offering a CPD workshop in early 2020 with a view to further workshops being available during the year.
The workbook requires practices to analyse a number of factors that will either directly or indirectly influence their future performance. Stages include:
- Understanding practice performance: how is your practice performing currently?
- Client profiling: what is the profile of existing clients?
- Market analysis: what are the important factors in the marketplace in which the practice operates?
- Competitor analysis: how do competitors behave and what can your practice learn from them, emulate and avoid?
- ‘SWOT’: what are the strengths and weaknesses internal to the practice, and the opportunities and threats external to the practice that are key to identifying and pursuing growth opportunities?
- Growth objectives: having analysed internal and external data and research, what ambition does the practice have for growth in the next three years (or longer if preferred)? Consideration should be given to both organic/internal growth (expanding within current operations) and inorganic/external (via takeovers, mergers, etc) growth options.
- Action planning: what plan of action does the practice need to put into place in order to achieve its growth objectives? The action plan will need to be well thought out, and must aim to address any and all potential barriers that the practice may have to overcome to achieve its objectives. The practice must consider what practice-mechanism resources will be required, whether any structural changes would be worthwhile pursuing (for example, strategic partnerships) and what marketing activities are necessary. Following this, the practice must set clear, unambiguous actions under each of the headings (or as many as possible) in the action plan table at the end of the workbook for each growth objective.
Factors for success
In order for a practice’s growth strategy to be as successful and as worthwhile as possible, there are a number of dependencies and success factors.
Each individual’s approach to the growth strategy will differ, depending on a number of elements, such as level of available time and work styles. Practices will also be approaching the growth strategy at differing stages of their growth and development.
Growth strategy success
While one practice may already have a well-compiled set of practice statistics (sources of revenue, expenses, sources of new business, etc), another may have a limited amount. This will obviously have an impact on how long the growth strategy takes to complete.
Successfully completing the growth strategy will depend on:
- Commitment from all those involved in its creation to meet any timelines set out,
- An open-minded approach – all involved should remain open-minded and adaptable to ideas, opportunities and risks presented by the growth strategy, and embrace any change resulting from its use,
- Team engagement – where applicable, structured briefings and participation from all staff should be encouraged,
- Time management – an achievable timeline should be identified for all phases,
- Robust and quality information – the growth strategy will only be as strong as the research and information that is gathered and analysed,
- Feedback and monitoring – a culture of gathering feedback should be embraced, along with a process to ensure that feedback informs future decisions.
The level of success a practice achieves through the completion of the workbook will mainly depend upon these factors. The more structured, robust and thorough an approach to its creation, the more benefit a practice will generate.
A common goal
Ultimately, the growth strategy workbook will support each practice in achieving growth and sustainability, as it focuses the practice’s efforts and ensures that everyone is working towards a common goal.
This template/workbook is part of an overall programme of supports being provided to smaller legal practices by the Law Society.
Other supports should also be availed of to assist in the completion of the growth strategy, including, for example, the ready reckoner, materials on the Small Practice Business Hub (launched in July 2019), and relevant online and onsite training resources.