Advertisements

Summer 2010: A Time for Serious Strategic Planning; Spare the Fun and Sun This Year

What Next September’s Essay Concerning How You Spent Your Summer Must Include

 

                            

                                                                             Jerome Kowalski

                                                                             Kowalski & Associates

                                                                             June, 2010

        At our family’s ritual Fourth of July barbecue, a family member would invariably sit back on a lawn chair and sigh “man, what a hard winter we just had.”  Acknowledging nods and grunts would circulate, bottles of beer would bottom up, which was then followed by bursts of discussion for what the summer cycle would bring:  Time at the shore, golf, long weekends, a trip to a country resort. And, one family member or another would always bring this exchange to a grinding halt by saying something along the lines of “this year we’re going to be painting the back porch” or something akin to “this year we’re going to finally be cleaning out the garage.”  What was particularly enraging about these sanctimonious relatives was that they meant it, they did it and their houses were always in marvelous condition.

This year, we not only have a hard winter; it was preceded by an even tougher winter.  Next winter isn’t looking great either. Swimming, sunning, golfing and hiking, all important diversions to be sure, now must take a back seat to required home maintenance as the winter to follow shows no real sign of global economic warming. This is not the summer during which you should relax and then anticipate that things will get back to “normal” after Labor Day. There simply is no “normal” anymore.   I have long cautioned about the serious danger of a double dip recession.  Yesterday, Nobel economics laureate and New York Times Op Ed columnist Paul Krugman, upped the bidding and warned about the real danger of a “Long Depression.” 

It’s therefore essential to be grownups and use the coming two months productively.  Let’s put off the sunning and funning until we know the storm warnings have passed.

Here are some of the things we should be doing over the next eight weeks:

First, take a hard and realistic look back at what the first half of the year actually yielded. No, it’s not time to sling back in a hammock, toss back a brew and simply hope that the second half of the year will be better.  Yes, the winds of this year’s summer must be put to their utmost advantage

This summer, we all need to be Twelve Steppers and seriously invoke Reinhuld Niehbur’s “Serenity Prayer:”

God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference.

We cannot change economic realities by wishing them away or hoping they blow away while we sun and fun.  But, we do need to have the courage to make changes necessary to accommodate those things we can alter.

First, take a walk around your entire house and take an objective look at what needs fixing.  Some thoughts:

  1. Take a hard and critical look back at the preceding six months. Has the flow of business from a significant client decreased?  If so, have you met with the client and had the hard discussions?   If the client is suffering its own reversals, use the opportunity to express concern and offer assistance, even if the result is not immediate revenue generation. Cement the relationship; let the client know your interest in its welfare does not end when the revenues stop flowing.  Is the business going elsewhere?  Ask why and inquire as to what you need to do to get the business back.  Is there an existing or new client that has increased its reliance on your firm and generated new revenues?  Cement this relationship further.  Find out what you did right and what lessons you can take away for other prospects.

 

2.       Take the time to talk to peers at other law firms. Gain an understanding of how they weathered the months past and how they are planning to deal with the coming “R” months.

3.       The longer days of summer also provides you with the opportunity to spend time with partners and associates to share with them the direction the firm is headed, solicit their input, eliminate the fear of the unknown and create a sense of shared common purpose and increased transparency. This year’s summer outing should not be only about golf, softball, volleyball, sunning, sailing and swimming.  All of these activities should simply provide more comfortable venues for open substantive dialogue and an absence of opaque leadership.

 4.      The late spring and early summer have wrought significant substantive changes to vital areas of the law vitally affecting your clients. These include (a) recently enacted federal financial reform; (b) the continued vitality of Sarbanes Oxley in light of the Supreme Court’s ruling on June 28 in Free Enterprise Fund v. Public Company Accounting Oversight Board; (c) what is the practical effect of the Court’s holding in Bilski v Kapposs in regard to patenting business methods? And (d) health care reform legislation. Are you on top of these issues?  Are you ready to respond intelligently to your clients’ inquiries on these issues?  More importantly, why are you waiting for the phone to ring?  The next few weeks should be the time during which you should be sending your clients succinct alerts and bulletins explaining in crisp simple English sentences how each of these events affect them and their business.  And, while you are at it, you should also be taking the initiative and staking out and establishing your credible expertise in these areas by posting informative blogs on these important emerging issues.  The New York Times opined on June 26 that the new regulatory schemes were actually intended to provide federal aid to employment in the legal sector.  Nobody is coming up from Washington to hand you a check.  You need to do the work to obtain your entitlement.

5.    Take stock on the performance of your own firm’s practice areas.  Compare year to date performance with the prior two years.  Take note of the trending in these areas and determine where assets and talent might be better deployed. Be sure that you are not falling in to a business concentration trap to post short term revenue gains.Reach in to the bottom left drawer of your desk and dust off your current business plan and take stock of how the firm is performing midway this year and determine where tinkering is essential. The same should also be done with regard to your current budget.  Business plans and budgets, in the current economic climate, are precisely like well thought through and thoroughly researched military battle plans. They are perfect until the first shot is fired.  The summer solstice lifts the fog of war and provides the opportunity to revamp, revise, amend or trash plans that aren’t working. Don’t double down on bets that haven’t been working.  Do increase investments in areas that are showing growth and staying power.

6.    Become fully acquainted with the metrics of The ACC Value Index .  Your firm is being graded by the Association of Corporate Counsel and those grades are publicly posted. Do not put yourself in jeopardy of being voted off the island only because you failed to appreciate on what bases you are being graded .

 7.     Alternative Fee Arrangements are not a passing fad.  Our colleagues at Altman Weil reported just last week that a whopping 94.5% of law firms utilize varying forms of AFA’s.  Firms which have more thoroughly embraced these billing arrangements are experiencing real increases (often double digit increases) in revenues and profitability and substantially enhancing client relationships.  Now is the time to make sure your partners understand that clients are no longer buying in to the palaver that legal matters, particularly litigation, are so unpredictable that the only way for lawyers to be fairly compensated is through an hourly billing model. It is now the time for everybody to slake their thirsts and enjoy the Kool-Aid. 

 8.    As I wrote some months ago, ACC metrics, maximizing profitability, maintaining best practices and requires that law firms be populated with experts on project management. Many firms have already stood up and not just taken notice but have moved forward and developed this expertise. The summer months provides you with the time to clean this part of your garage and develop the requisite in-house expertise necessary for success in this market.

9.  Take stock of your colleagues’ ability to adapt to the revolutionary changes required of lawyers in this challenging and unprecedented competitive economy and make sure that your partners’ resistance to change is being treated with appropriate antibodies.

10.  Realistically reassess, once again, your hiring projections for 2L’s and 3L’s. You won’t be caught up short if you under hire; you will doubtless have an agita relapse if you over hire. When you add the recent law school graduates to the pool of unemployed lawyers laid off in the last couple of years, the available labor pool is now in excess of 60,000.  In 2011, it will exceed six figures. Think about it like packing for a vacation trip:  Take half as much luggage as you planned and bring along twice as much money.

11.  Dramatically expand your own network of contacts.

And, in the Fall, when well tanned visitors come calling, let them be impressed by how fantastic your home looks.

© Jerome Kowalski, June, 2010.  All Rights Reserved.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: