Resources – Key to survival and competitiveness as a sole practitioner Peter Scott PETER SCOTT CONSULTING .

Resources – Key to survival and competitiveness as a sole practitioner

Peter ScottPETER SCOTT CONSULTINGwww.peterscottconsult.co.uk

PETER SCOTT CONSULTING

In a fast changing world all law firms need to constantly adapt to meet the challenges they face

• The economy• Client needs are changing• Greater regulation and compliance• New competitors with deep pockets • PI insurers’ attitudes • Technology• Succession issues• Others?• A need to become more competitive

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The need to be more competitive

“Competition is a process by which …

• services that people are not prepared to pay for; • high cost methods of production; and• inefficient organisations are weeded out; and

• opportunity is given for new…services methods and organisations to be tried” *

Is this a process which applies to sole practitioners (and other law firms) today?

*Everyman’s Dictionary of Economics

If you can do that then you can gain a competitive advantage over your rivals

It is what places you ahead of your competitors, allowing you to generate greater sales and profits and retain more clients than your competitors.

But it means you have to do things differently and keep innovating to stay ahead

“Worryingly, with almost a third of law firms outside the top ten recording disappointing net profit margins, our view is that unless these firms can radically restructure their business, their short to medium – term survival must be in doubt”

PWC – 2013 Report on the UK legal market

PETER SCOTT CONSULTING

Challenges facing law firms today

• The economy• Client needs are changing• Greater regulation and compliance• New competitors with deep pockets • PI insurers’ attitudes • Technology• Succession issues• Others?• A need to become more competitive

Greater need for resource

Resource(s)

• ‘Something to which one can turn for help or support or to achieve one’s purpose’

• ‘Available assets’ (e.g. we pooled our resources)

Resourceful

• ‘Clever at finding ways of doing things’

What resources do you need as a law firm to be competitive?

Why clients choose one law firm over another - most important factors (recent law firm example)

Meeting deadlines, keeping commitments

Cumulative knowledge and expertise

Value for Money

Care and Attention given

Personable and Likeable People

Ability to Communicate Knowledge

Ability to offer Advice quickly

Accessibility and Availability of people

Keeping you informed of progress

Quality of People Overall

Rapport with Team

Billing as Expected

Interest in/Knowledge of Association/Authority

Keeping you informed on issues...

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PETER SCOTT CONSULTING

Resources needed?

• People – to provide expertise• Financial to provide for people and infrastructure to underpin provision of

high quality legal services:

- service standards

- financial management

- compliance and risk management

- business development

- Technology

- KM

- other?

• Time

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How can sole practitioners realistically and cost effectively provide for these resources?

• How do you currently do so?

• Some possibilities –

- Outsourcing?- In-house?- Collaboration?- Others?

Outsourcing

What services do you outsource?

• Back office?• Risk and compliance?• KM• IT?• Financial management advice?• Premises?• Marketing?• Reprographics?• Secretarial? • Others?

NB – compliance requirements in relation to outsourcing

SRA Code of Conduct – chapter 7

O(7.10) ……. where you outsource …….. any operational functions that are critical to the delivery of any legal activities, you ensure such outsourcing:

(a)does not adversely affect your ability to comply with, or the SRA’s ability to monitor your compliance with, your obligations in the Handbook;

(b) is subject to contractual arrangements that enable the SRA or its agent to obtain information from, inspect the records (including electronic records) of, or enter the premises of, the third party, in relation to the outsourced activities or functions;

(c) does not alter your obligations towards your clients; and

(d) does not cause you to breach the conditions with which you must comply in order to be authorised and to remain so.

In-house

• Zero based budgeting (ZBB) - Do we need this overhead? - If we need it, what is the most cost effective way to provide it?

• Carry out a cost / benefit analysis

Outsourcing Vs in-house?

“Collaboration”

association cooperation working togethercoming together for mutual benefit

How many of you are ‘collaborating’ with other sole practitioners?

Collaborative strategies 1. Networks

• Who is a member of a ‘network’?

• The term includes franchises, alliances, groupings which can be as tight or as loose as required – examples?

• At the heart of a good network is the ability to provide its members access to resources which no individual member can provide on its own – examples?

• Membership of a network is merely a means to an end – to enable its members to gain a competitive edge

Networks – some issues to consider

• Objectives in joining? • What benefits will you get out of it?• What will it cost?• Ultimate destination?• How tight or loose?• Compatible ambitions with other members?• Are priorities the same?• Will there be client added value?• Branding?

www.keystonelaw.co.uk

Frequently Asked Questions What is Keystone Law? In what way is Keystone innovative? How does this improve the service provided by Keystone? What is the pedigree of a Keystone lawyer? Who are Keystone’s clients?.

Collaborative strategies2. Virtual firms

Collaborative strategies3. Cost sharing / pooling resources

• Who does this?

• Examples? - premises costs - bulk buying - office infrastructure - people and services - IT - knowledge - others?

PETER SCOTT CONSULTING

Challenges facing law firms today

• The economy• Client needs are changing• Greater regulation and compliance• New competitors with deep pockets • PI insurers’ attitudes • Technology• Succession issues• Others?• A need to become more competitive

How are you managing these?

Why clients choose one law firm over another - most important factors (recent law firm example)

Meeting deadlines, keeping commitments

Cumulative knowledge and expertise

Value for Money

Care and Attention given

Personable and Likeable People

Ability to Communicate Knowledge

Ability to offer Advice quickly

Accessibility and Availability of people

Keeping you informed of progress

Quality of People Overall

Rapport with Team

Billing as Expected

Interest in/Knowledge of Association/Authority

Keeping you informed on issues...

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Are there alternatives if you conclude that you are unable to adequately resource your business on your own?

• Consolidation between firms in a fragmented profession can help build resource and competitive advantage

• consolidation is not a strategy – it is a means to an end – to gain competitive advantage

NB – consolidation is not a panacea - often just a better platform on which to build a more competitive law firm- not about size for the sake of size

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However size is important in that the scale of a firm

may help a firm to develop and to provide the

resources needed at an acceptable economic cost to

each constituent firm which the individual firms could

not on their own provide.

Examples?

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Consolidation might help you to

• Attract and retain better talent to fill skills gaps

• Better service (and retain) clients by providing greater depth and breadth of expertise and service delivery

• Build your management and infrastructure

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Is consolidation a vision of the future for some?

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How are you now planning to ….

• provide the critical resources your practice now needs?

• to compete with larger, more developed

firms?

To survive and prosper

Any questions?