But first, what is a business strategy – and why do you need one?
Like all businesses, law firms have many moving parts.
So it's crucial to have a roadmap. One that simplifies decision-making at all levels and keeps your firm on track to achieving its objectives.
That roadmap is your business strategy. And when managed effectively, it empowers every staff member to contribute to a commonly defined purpose.
But there are a few key steps to consider if you want a strategy that works.
We asked Kristen Podagiel what top four mistakes firms make when it comes to strategy. Here's what she told us.
No defined business purpose
Has your firm identified its reason for being? One that defines the value you bring to your community – and the world?
If not, Kristen says you are not alone.
“You need to define the purpose of your business, beyond making money. And yet, so many leaders don’t do that. It’s a common mistake I see in law firms.”
Your purpose could be specific. For example, ‘to support government in achieving a just and secure society,’ which is the purpose statement of the Australian Attorney-General’s Department.
Or it might speak to a broader outcome, like ‘spread ideas,’ which is the purpose of the non-profit organisation, TED.
But why is a defined purpose so important?
Kristen says it comes down to three compelling reasons – each of which will bring tangible value to your firm:
- It keeps your firm relevant in an increasingly volatile world. You’ll be better able to align your firm externally with clients and delivery partners who share your values – creating more opportunities for growth.
- It acts as the metaphorical seed from which your strategy can germinate; and makes it a lot easier to choose the internal tools, culture and staff to bring that purpose to life.
- It allows employees to experience more profound meaning in their work – a career goal that is increasing in popularity, especially post-COVID. In fact, shows staff will often choose purpose over a bigger pay packet.
"If you can communicate a clear purpose, one that binds people together, you can even compete with firms that pay their staff more," explains Kristen.
How to fix it:
Whichever way you go, it's important to keep the process collaborative.
"Deciding your purpose is not necessarily hard – but it takes time. And it's not something one person can do alone," says Kristen.
So, set aside time and resources to write your purpose collaboratively – before you create another strategy with no foundation.
"You can do some interesting exercises with your team to identify your purpose and what the firm means to them. It's not rocket science, but you do need to involve different stakeholders."
No consultation outside the firm
How often do you look at what’s happening across the broader business landscape?
These days, most of the challenges you'll face will come from outside your firm, not from within it.
And while it's tempting to think that law is unique, chances are, other industries are facing similar external pressures. Therefore, a lot can be gained by looking at industries outside your own – and learning from their experience.
According to Kristen, consulting more widely is the antidote to developing a strategy that focuses too much on internal challenges and not enough on external ones.
"You don’t need to act on everything you learn. But you do need to put all that information into the melting pot. Otherwise, you risk developing a very narrow, inwardly focused strategy.”
Clients can also be a wealth of knowledge about your business, providing perspectives from the other side of the service exchange. Perspectives that can help you compete more effectively.
It can be daunting to invite feedback from clients. But if you're brave enough to welcome the words, you will certainly find a few hidden gems.
How to fix it:
Empower your strategy team with the time and permission to consult outside the legal industry.
Look at broader services trends and consider how solutions from other sectors might improve the way you do things in your own backyard.
No staff involvement
What do your staff think about your business – and the direction it's heading in?
Their view is likely very different to yours. And according to Kristen, taking the time to discover and build those perspectives into your business strategy is critical.
"Executives make assumptions about what staff think. They chat with the same people all the time. And when you always talk to the same people, you develop blinkered thinking.
"You must go out and get feedback from those who know your business inside out. It can be confronting, but there is no piece of information more powerful than constructive feedback from a staff member."
Remember, too, that the staff are the ones who’ll be implementing the business strategy day to day. So it's essential that you value their ideas. Because when staff are invested in the process – and the outcome – they’re more motivated to prioritise their workload in line with strategic objectives. And everybody wins.
How to fix it:
Remember that developing a strategy is a two-way conversation. Provide staff with feedback channels that empower them to become part of the process.
No time (or space) to work on strategy
You’ve heard this old chestnut thousands of times before: you need to make time to work on your business, not just in your business.
It still makes perfect sense. With dedicated time, space and resources, you can free yourself from the daily ins and outs of the office. Instead, you can think about the bigger picture for your team and business.
“Thinking strategically is different to thinking operationally. And the number one thing I think people get wrong when doing strategy is they don’t give themselves the space,” says Kristen.
How to fix it:
Block out time in your schedule specifically for strategy – and consider moving sessions offsite to minimise the chance of being pulled back into the operational needs of your firm.
Need more space for strategy?
The College of Law’s Business Strategy course forms part of our Legal Business Management program – and is the perfect cure for a lack of time and headspace.
Join Kristen in this opportunity to think more broadly, consult more widely, and plan more strategically. And finish with an actionable strategy, ready to implement in your firm.
The next round starts on 7 November 2022 or 8 May 2023 and runs for six weeks.
Download the course guide today.
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- Tired of high maintenance clients?