A Four-Step Formula for Strategic Planning

This phase involves the managing partner, management committee or strategic planning committee to survey all or a representative number of lawyers through personal interviews, questionnaires or a combination of both to obtain their perceptions about internal and external trends that will have an effect on the firm. Examples of issues that are usually addressed during the self-assessment phase follow:

1. The philosophy, objectives and plans currently guiding the firm;

2. The firm’s culture;

3. The form and effectiveness of firm governance, organization and administration;

4. How effectively the firm’s growth has been managed;

5. Partner-associate relationships, for example, the ratio of associates to partners, classes of partners and associates, criteria for admission to partnership, communications among and between partners and associates, retirement planning;

6. Firm economics, for example, partner satisfaction with gross revenue and net profit, individual net income, hourly and billing expectation from partners and associates;

7. Areas of practice management, i.e., whether the firm delivers legal services in a quality, timely and profitable manner;

8. Firm resources and capabilities, i.e., strengths and weaknesses, as related to resources, reputation, services and legal market position;

9. Client perceptions and partner willingness and ability to sell legal services;

10. An assessment of the legal market environment, including size, synergism, trends, competition, client behavior; and

11. A forecast of the political, social and economic forces of change that will affect the firm and its clients.

Phase 2: Analysis of Database

This phase of the process involves analyzing the database to highlight those key internal and external factors affecting the firm. Planners should be especially interested in obtaining partners’ perceptions about the following:

1. Firm strengths;

2. Firm weaknesses;

3. Competitive advantages;

4. Competitive disadvantages;

5. Number of full time lawyers — both partners and associates and their ages;

6. Administrative personnel;

7. Main sources of clients and income from principal clients over the past three to five years and important changes that would effect client volume favorably or unfavorably;

8. Inventory of unbilled time, accounts receivable, costs advanced;

9. Billable and non-billable hours;

10. Health problems or personal idiosyncrasies of partners; and

11. Anticipated changes in the partner complement, though, retirement and withdrawal.

Many law firms have retained law office consultants to assist in the strategic planning process. Experienced law office consultants can expedite the strategic planning process. Being familiar with lawyer dynamics and the economics of law firms, law office consultants can analyze and interpret financial and management information and partners’ responses. They can recommend alternative approaches for achieving firm objectives. Further, partners are usually willing to discuss their perceptions about the firm and respond to a consultant’s questions more readily than to similar questions asked by other partners.

Phase 3: Draft Objectives for Presentation to Partners