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PRACTICE GROUP PLANNING

- Doing planning where the rubber meets the road -

In recent years, a growing number of law firms across the country have reorganized from a handful of broadly-defined departments to a set of more narrowly defined practice groups organized by industry (healthcare, banking, real estate, biotechnology, telecommunications, etc.) and by legal specialty (M&A, securities, employment, tax, bankruptcy, intellectual property, etc.).

Practice groups are the law firm equivalent of corporate strategic business units, or “SBUs.” Over the past two decades large, multi-divisional corporations have shifted from a centralized “top down” corporate structure to a more decentralized “bottom up” form of organization comprised of semi-autonomous strategic business units created around specific markets and products. This form of organization has enabled these organizations to be more responsive to their markets and customers, to undertake a more focused approach to marketing, and to foster greater entrepreneurship and accountability at the SBU level.

In the same vein, many law firms have become too large and too diffuse to manage with a top-down departmental organization structure and traditional management approach. A practice group / industry team structure allows for sharper client focus; more targeted marketing; a more tailored approach to pricing, staffing, and support services; and greater entrepreneurial behavior and accountability at the level where it counts most - where legal services get marketed and delivered to clients.

A systematic practice group planning process carries with it a number of important benefits, including those listed below:

  • More Relevant Planning: Practice group planning brings strategic planning down to a more manageable scale with a narrower, more defined focus. Whether practice group planning is carried out by industry or by legal specialty, it is focused on relevant issues that partners understand and can relate to - industry and legal developments, competitor and market trends, and client issues and needs. This narrower, more specialized focus makes the planning process both more “real” and more interesting for its participants.
  • More Strategic Resource Allocation: Practice group planning can be beneficial to the resource allocation process. Without strategic plans in place, it is difficult for the firm’s leadership to prioritize the firm’s budgeting and investment process. A complete set of practice group plans enhances the firm’s ability to make more rational, more strategically relevant budgeting, resource allocation, and investment decisions.
  • Enhanced Accountability: One of the most significant challenges to any law firm is building and ensuring accountability. The dedicated organizational and leadership arrangement of practice groups helps to ensure a reasonable degree of managerial focus and accountability. In addition, if the firm chooses to do so, its accounting system can be set up to track key operating and financial performance information by practice group or industry team.
  • Expanded Leadership Development: Practice groups and industry teams make excellent “laboratories” or training grounds for building and identifying future leadership talent. The job of a practice group leader/administrator often provides younger, less senior partners with a valuable opportunity to test their leadership and management skills - and provides the firm’s governing body with important insight into these individuals as potential candidates for future leadership positions.
  • Firm Integration: Practice group planning can be beneficial in fostering greater integration in multi-office firms. Because the planning process involves attorneys from different offices, legal disciplines, and industries, the practice group planning process causes partners to work together across practice and geographic boundaries in addressing common strategic challenges and opportunities;
  • Targeted Marketing: Finally, practice group planning focuses marketing and client development where it counts most - on a common set of clients operating in a defined market against a common set of competitors. Many law firms talk about the benefits of doing “targeted marketing.” Practice groups and industry teams provide the most appropriate context within which to carry it out.

Although still a relatively new phenomenon, the use of practice groups is rapidly becoming an accepted planning and management format in law firms throughout the country. Some believe that in the future those firms which understand how to organize and manage practice groups will enjoy an advantage over those that continue to operate in less structured and more traditional ways.

Our Beliefs on Practice Group Planning
Our approach to practice planning is predicated on the following beliefs about how best to design and conduct strategic/long-range planning programs. (See Strategic Planning description) These views are outlined below:

  • The Ultimate Product of Planning is Change: Ultimately, the goal of planning is change - expressed in the form of new ideas, approaches, initiatives, policies, procedures, technologies, or structures. Firms that are unwilling or unprepared to undertake at least some degree of change will find practice planning to be of limited value.
  • The Process Must be Leadership-Driven: To be credible, planning must be championed - and led - by the firm’s governing body. Ideally, the process should be conducted within the context of both a mission and vision that are clearly articulated and widely communicated by the leadership body to all members of the firm. To provide the proper context, some firms elect to develop a firm wide “umbrella” vision and goals statement prior to undertaking practice group planning.
  • The Benefits of Participation: To ensure the greatest chance for buy-in and implementation, the planning process must involve members of the practice group as active participants. Lawyers who feel they “own” the results of planning process will be far more likely to endorse the product of planning than those who are merely passive observers. This is accomplished through the use of task forces, working groups, and special assignments during the course of the practice planning engagement;
  • The Need for External Focus: To be truly strategic, the practice group planning process should be conducted from an external “outside in” perspective. To this end, the process should incorporate as much objective, factual information as possible on the key factors of the external environment - markets, clients, competitors, regulatory and legislative trends, and the like. Planning which rests too heavily on the partners’ own personal assumptions, hypotheses and beliefs can lead dangerously down the wrong road.
  • The Process Should be Brief, Focused, and Engaging: As much as possible, the process of practice group planning should be “short and sweet.” No matter how interested lawyers might be at the outset, they will quickly tire of any planning program that meanders or that lasts more than a few months. It is the job of the consultant/facilitator to make the process succinct, stimulating, and relevant.
  • The Product - More Than a Written Document: In their strategic planning, many law firms make the mistake of spending an inordinate amount of time on “writing the plan” - authoring a carefully crafted document which gets drafted, circulated, edited, and re-drafted - only to spend the rest of its days sitting on a shelf. This approach, which substitutes editing for thinking, is not a constructive form of planning or a valuable use of partners’ time. The real products of practice group strategic planning are the decisions, agreements, and initiatives which the partners agree to during the planning process. A brief written document produced at the conclusion of the process is usually all that is needed to memorialize the key outcomes of the planning process.

Practice Group Planning Questions for Law Firms
The overall goal of Practice Planning is to prepare and implement multi-year business development / marketing plans for the practice groups in the firm. When completed, each practice group will have answered the following questions:

What is the practice group’s vision of itself in 3-5 years? What are its goals over the next several years? What position does it envision for itself in the local / regional legal marketplace? What would the group like to be best known for?

What should be the practice group’s principal focus over the next several years?Which legal specialties and / or industry sub-groups are of highest priority for the group?

Which types of clients should the practice group target -- by sector, location, size, and type of company?

How should the practice group define its geographic boundaries and reach? Should a broader geographic market be attempted?

In the future, how broad a service “menu” should the practice group attempt to offer?  Where does the practice group want to be on the continuum of “full-service” vs. “boutique/specialized”?

By how much should the practice group attempt to grow from its present size? What would be the optimal size for the practice group in terms of critical mass? If growth is desirable, by what means should it be achieved? How much growth should be internal vs. acquired externally?

Is the practice group / industry team organized correctly? Does the group include the right practice / industry specialties? Does the group include the right partners and associates? Is the group’s leadership adequate? Does the group meet regularly and are the meetings well run and productive? 

How should the practice group organize and manage its marketing and practice development activities? How can partners and senior associates within the group become more successful at both promoting the practice and attracting new clients and matters? How can the practice group do a better job of cross-selling with other practice groups?

How can each practice group enhance its internal leadership and management effectiveness?

What goals or benchmarks should be used to assess the financial and operating performance of the firm and of each principal practice group?

Practice Plan Content
Practice Profile

  • Current practice mission
  • What currently known for?
  • The practice through the numbers

External Analysis

  • Client and market trends
  • Industry analysis / trends

Internal Analysis

  • Practice organization and leadership
  • Practice economics
  • Technology utilization
  • Matter and client management
  • Marketing and promotion

Competitive Strengths/Weaknesses Analysis

  • Principal competitors (or types of competitors)
  • Critical success factors (CSFs)
  • Performance by CSF against each principal competitor

Key Issues (problems, opportunities, threats)

  • Key strategic issues... prioritized
  • Key operational issues...prioritized

Vision and Goals Statement

  • Vision Statement
  • Performance Goals and Benchmarks

Strategies

  • Seven to ten strategies to meet vision and goals

Detailed Implementation Plan

  • Detailed list of action steps for each strategy
  • Ownership and due date
  • Ongoing review and assessment

Related Articles:

“Practice Group Planning - The New Frontier,” Legal Management (March 1995)

“Practice Group Planning: Keeping Strategic Planning Relevant," ALA Advantage (January 1997)

“Practice Groups Get with their Own Program First,” Boston Business Journal (January 17, 1997)

“Where Do You Want to Go?” Legal Management (Nov-Dec. 2002)

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