Justin Purcell offers tips to take your practice forward in 2024.
Relying on referrals?
There is a growing need for smaller practices to diversify their business development activities and move beyond a reliance on their existing base and referrals. Very often practices tend to rely too heavily on referrals and their existing client base to provide repeat business. Certainly, this can have benefits in maintaining a loyal client base who provide repeat business. Cost-effective business development increases existing levels of confidence in the practice, thereby strengthening the client relationship and - more importantly - increasing the likelihood of the client recommending the practice to others.
However, relying solely on referrals alone to win new business cannot sufficiently future-proof a legal practice. Referrals can all-too-often be unpredictable and are not seen as a scalable source of business development. Networking and referrals are interconnected and, if a practice is to rely solely on referrals as a key source of business development, it needs to concentrate on proactively growing its network to widen the pool from which it generates leads given the levels of increasing competition.
Focus on the future
Practices should be encouraged to develop growth strategies to ensure that actions are planned and implemented on an ongoing basis and continual basis to impact on future sustainability. The absence of a growth strategy can often lead to a situation where there is comparatively less focus on the future and day-to-day activities of the firm take over. This can result in little strategy development and growth only happens in an unplanned way - if at all. Without a growth strategy in place, smaller practices could either be losing business or increasing their chances of loss.
Developing a growth strategy provides a focus on the future of the business including the type of clients a practice wishes to target, the rationale for doing so, and what the managing partner(s) wants to achieve as a practice. An effective growth strategy reflects the long-term vision, purpose and growth ambitions for the practice.
In developing a business growth strategy, it is important that the following question are asked.
- Understanding your 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?
- Competitors Analysis: How do competitors behave and what can your practice learn from them?
- 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: Analyse the internal and external data and research that ambition does the practice have for growth in the next three years.
- Action Planning: What plan of action does the practice need to put into place in order to achieve its growth objectives?
Even if you are satisfied with the practice’s current performance and development, a growth strategy will almost always highlight various other ways to develop the current offering, protect the practice from losing business to competitors and strengthen existing performance.
Resources for you
Tools to help you plan a business growth strategy can be found in the Business Hub.
Justin Purcell is the Law Society’s Practice Support Executive. Please contact us with any queries you may have about running your practice. Email email@example.com.