Firms spending millions writing biz plans that just gather dust
While, on average, a large law firm may typically spend a quarter of a million dollars creating an annual business plan the harsh reality is that few are actually maximising the investment and carrying it out.
In fact, only 3.2 per cent of law firms – ranging from 0 per cent in the 301 to 500 lawyer-category to a high of 7 per cent among the over 500 attorney firms were able to implement ‘almost all’ of their last formal strategic plan. In the latest of a series of Leader’s Pulse Surveys, consultants David J Parnell and Patrick J McKenna canvassed and received detailed feedback from 68 firm leaders, on their approach to strategic planning and their specific responses to 18 questions covering everything from who was involved in developing their current strategic plan and how long it took, to how satisfied they were with it and the one thing they would change with respect to their efforts in the future.
Shocking lack of success in implementation
Mr Parnell said: ‘We found that overall, there is no lack of formal strategic planning going on within today’s law firms. A mere 2.9 per cent of responding firms reported that rather than have a written plan they ’preferred to remain flexible and opportunistic’.’ ‘But the unfortunate news,’ reported Mr McKenna, ‘was that shockingly few firms can report success in implementation’.
Firms of all sizes make significant investment
The duo added that: ‘Our research tells us that among firms of every size, 70.4 per cent of all firms invest on average at least three months in the development of a formal written strategic plan. That investment usually involves the members of firm leadership, involvement of the executive committee or board, and often times those participating on a specially constituted planning committee – in other words, some of the most senior and expensive talent in the firm in a series of lengthy meetings over a number of months, with hours of preparation and homework in between each meeting. By our estimates we believe that law firms, especially the larger ones, easily invest about a quarter of a million dollars in partner time.’
Regularity of review varied
The consultants report that one of the more intriguing questions posed was how often these firms reviewed and if necessary, revised their current strategic plan. ‘We offered a broad range of responses from ‘several times a year’ (without defining what several means or suggesting that the ideal might be monthly) to ‘not until the plan is no longer relevant’ (which could be interpreted as code for ‘never’). Not surprisingly, the average was 12.7 per cent responses for the ‘several times a year’ option while 36.4 per cent responding ‘rarely’ or never; with another 36.4 per cent claiming that it was at least an annual activity.’
Not actively reviewed or implemented
The consultants concluded: ‘What is clear to us, from among the responses and comments that we heard, is that law firms are spending a good amount of their most senior players’ time in developing a formal strategic plan, which is then neither actively reviewed or implemented with sufficient effort. The one area that invoked the strongest dissatisfaction and was consistently expressed by firms of all sizes was the need for ‘implementation with designated responsibility and time lines’.’
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