Four Must-Haves for Practice Group Planning

By Marci M. Krufka

Steps to maintain continuity and promote growth

Today more than ever, law firms consider practice groups to be the core operating units of the firm's business. This means there is increasing focus on improving leadership, management, marketing and, most importantly, business planning at the practice group level. Whether you're a practice group leader, a firm manager or a firm administrator, it's important to know key drivers for effective practice group planning. Based on real-life experiences in law firms seeking to develop and implement practice group business plans, here are four "must-haves."

No. 1: Make Sure the Plan Is Fact-Based

So many times, practice groups develop their plans by getting together for a day in a conference room, sitting around a meeting table, and developing the group's strategies with nothing other than some good intentions and some standard reports generated by the firm's time and billing system. To be truly effective, however, your group's plan must be based on solid market research (meaning external facts) and a candid analysis of the group's performance (internal facts).

Your practice group's plan will likely include the group's plan for growth, which calls for taking the following into account:

• The types of clients the group will try to retain and attract, based on industry, type of client (size of company by revenues, etc.) or other criteria

• Industries the group will target and the internal industry experience the group will build

• Areas of expertise the group will try to grow, both in terms of work and in terms of internal depth and breadth

To ensure that such growth strategies are successful, it's critical that the practice group have the appropriate market research to make effective decisions. Let's illustrate the point with three planning scenarios.

Scenario A. Your corporate group has handled several successful mergers and acquisitions in the telecommunications industry and wants to do more M&A work in that area. Intuitively, this seems to be a good idea. However, your market research indicates that revenue growth in the telecommunications industry has remained flat over the past two years, that the trend is expected to continue, and that further consolidation in the industry is expected to slow in the next 18 to 24 months. Armed with this information, the group can make a better-informed decision about the wisdom of an aggressive growth strategy in this area. Absent the information, it's likely poor choices would be made, and group resources—in both time and money—would probably be used ineffectively.

Scenario B. Your litigation group has done some sophisticated coverage work in the environmental area, but it is only doing a percentage of all the environmental coverage work its existing clients have. So the group develops a strategy to increase its market share in this area by increasing its capabilities and doing four seminars for existing clients on environmental coverage issues this year. However, had the group first done a survey of existing clients, it may have learned that four of the six major carriers it represents plan to stop writing these types of policies in the next two years. In response, the group may have chosen not to pursue this strategy.

Remember, too, how important internal facts are to planning as well. Before your practice group develops its strategy, the firm's financial managers should develop an analysis of the group's financial performance, including, at a minimum, historical growth data (for at least three years) for teams or subspecialties, as well as information on profitability, productivity and pricing.

Scenario C. Your intellectual property group has seen a 20 percent increase in revenues in patent prosecution work in the petrochemical area. Naturally, this appears to be a growing area with a lot of promise, so the group decides to aggressively promote this specialty. Clients, however, expect this work to be done on a fixed-fee basis, and the market will only bear fixed fees within a certain range. Analysis of your financial data may have indicated that given the pricing restrictions set forth by clients, this work has much lower margins than the other patent prosecution work being done by the group. Again, if the group had the appropriate research, it may have decided not to pursue this strategy.

No. 2: Solicit the Input of the Group Members

It's one thing to develop an effective plan, but it's another to ensure that the practice group follows through on the plan. One way to increase the likelihood that the plan will actually be implemented is to be sure to get the input of the practice group members as part of the planning process. Gaining buy-in from the group means that the plan will be their plan, not the plan of the practice group leader, firm management or the planning committee.

If you're in a bigger firm, your group may be too large for all of the members to participate in the planning meetings in person. However, you still can—and should—solicit everyone's input prior to developing the group's strategies and tactics.

You can do this by conducting a brief written or Web-based survey of group members regarding important planning issues. In addition, the practice group leader might interview key group members (who may not be a part of the planning group) or may interview all members in a focus group format to understand their thoughts and goals for the group.

Group members should be asked their thoughts about these issues:

• Specific opportunities they have to acquire new work from existing and potential clients

• Potential threats to the group based on changes in the law, the marketplace or competitor moves

• The group's internal strengths and weaknesses

• The existence of strong internal systems to support the practice—management, administration, work allocation, matter staffing, service delivery, sharing of internal resources, professional development, and lawyer recruitment and training, to name a few

• The group's growth and the impacts of that growth

• The effectiveness of the group's marketing strategies

• Ideas for new marketing strategies the group can employ

No. 3: Develop a Straightforward, Concisely Written Plan

Practice group plans need not contain lengthy vision statements, lofty goals or feel-good platitudes. And they definitely should not be 20-plus-page documents that are long on words but short on substance. It's much better to have a brief plan with strategies that will be implemented than to have a white paper on your group that will sit in a drawer, not referred to again until next year's plan is due.

The group's plan should be five to seven pages at the most. It should contain a concise statement of the group's strategic intent, along with specific action steps (about 10 to 20 items) that the group and its members will take to accomplish the following:

• Capitalize on existing opportunities

• Counter any threats

• Build on key strengths

• Correct any weaknesses

No. 4: Include Deadlines and Hold Group Members Accountable

In addition to gaining buy-in through soliciting feedback from group members, you can improve the likelihood of implementation by setting deadlines for the execution of each specific strategy and tactic in the plan. For example, instead of a tactic that reads, "The Pharmaceutical & Medical Device Team will write articles for publication this year," your tactic would be, "Partners A and B, with the assistance of associates C and D, will write two articles for publication in Corporate Counsel, one by April 30, 2007, and one by September 30, 2007."

Practice group leaders often complain about the available means for holding lawyers accountable for completing such plans (other than their input into the setting of lawyer compensation, which, unfortunately, not all practice group leaders have). One helpful method that has been found effective is to make your regular practice group meetings essentially your "practice group plan implementation" meetings. In other words, your plan should serve as the basis for the agenda for most, if not all, of the group's regular meetings.

These meetings are a perfect opportunity to remind members of the practice group's overall strategic intent. The meetings should also be used to review the plan tactics and compare them to the status of their implementation. Using the earlier example, during the May 2007 meeting the practice group leader would inquire, "Pharmaceutical & Medical Device Team, you were to have an article published in Corporate Counsel by April 30. Was that accomplished?" If "no" is the response, then ask, "Why not, and when can we expect that it will be done?"

Simple as it sounds, this is not a regular practice in many firms or groups. But it really should be—especially because, in addition to increasing accountability, it also serves to make regular group meetings more meaningful (addressing a complaint that's heard from many practice group members).

There are, of course, other actions that you may take to make people more accountable. They might include coaching or counseling by the group leader and involvement by firm management, if necessary.

Put the Focus Where It Counts

Effective practice group planning is one of the most important tools for law firm management today. It's invaluable for maintaining continuity and growth in practice areas as members, strategies and goals evolve with the marketplace. Including these four must-haves in your group's planning process will ensure that your plan and its implementation are a success.