Choosing the right opportunities for your law firm
Spartacus (or maybe Kirk Douglas) once said: “I believe in opportunity and the power of reason to seize upon it. Whatever happens, it happens because we choose for it. We decide our fate.”
With an irony not lost on classical scholars, this rallying cry was uttered shortly before he and his 6,000 admiring followers were slaughtered by the Roman Army, but you could argue this rather proved his point.
Some 2000 years later, law firm leaders are grappling with the unenviable task of ensuring the right choices are made about the future direction of the firms they lead. Some may say this is business as usual but, at this moment of heightened economic and social uncertainty, there is a sense that a wrong choice could be an existential one.
Several years ago, in one of our thought-pieces, we posed a series of questions that we thought law firms should be asking themselves to determine if they were fit enough for the year ahead. Questions such as, will all our services still be needed or wanted by paying clients? Is our team adequately trained and competent to provide them? Do we have a vision that has been clearly articulated internally and to our clients and stakeholders? Do we have contingency plans to enable us to cut our losses if government action renders a service unprofitable or undeliverable? Do we have a robust business continuity plan? Do we have the support of specialist insurance brokers, bankers and accountants who can help us ride the shockwaves and confidently forecast and benchmark our financial performance? Are we equipped to seize new market opportunities as they arise? And critically, do we have a governance agreement (partners or shareholders) that will enable us to reach and implement the critical business decisions we need to make?
These questions seem to be even more relevant today, as we move from lockdown to lockdown-lite and, eventually we hope, into broad sunlit uplands. Inevitably, questions like these demand a degree of introspection but, above all, require a culture which encourages the generation of new ideas. Ideas have a tendency to unearth new business opportunities but, as we all know, not every business opportunity is a good one. So, the challenge for law firm leaders is how to choose the right ones for your law firm.
Scouring the authorities for a definitive guide on how to evaluate a business opportunity has led me to conclude that there isn’t one. The search was, however, more rewarding than squeezing into my Lycra shorts for my daily breakfast workout with Joe Wicks.
Here then, in speed-read format, are my pick of the best TESTS OF A GOOD OPPORTUNITY to help you narrow the field.
TEST ONE – IS IT CLEAR WHAT THE OPPORTUNITY ACTUALLY IS? People who put forward ideas rarely describe them with sufficient clarity. If you’ve read a proposal twice and you still can’t work out what the opportunity is, thank the proposer kindly, ask for further and better particulars and diarise it for a fortnight. Passionate promoters respond positively and quickly. If you have to chase, assume it was not a strong idea or allocate it to an enthusiast to re-fashion it.
TEST TWO – DOES THE OPPORTUNITY FIT INTO YOUR VISION FOR THE FUTURE? To get traction, an opportunity needs to sit well with your strategic plan. Outliers can be wonderful and entertaining, but they can be hard to implement unless you are radically rethinking your strategic plan or diversification is being urgently thrust upon you.
TEST THREE – HOW WILL THE OPPORTUNITY DELIVER A BENEFIT TO YOUR CLIENTS? The best ideas are those that create a better way of fixing clients’ problems or delivering some other added value to clients. Even an average idea can do this with a bit of tweaking and improvement. The world is awash with products and services that nobody wants to buy. So, sounding out a few trusted clients can be a useful way of reaching an evidence-based decision. A good old-fashioned SWOT analysis can also help.
TEST FOUR – HOW WILL THE OPPORTUNITY DELIVER BENEFITS TO YOUR FIRM? In these testing times, few firms have resources to waste on new products, services or systems that do not deliver some improvement to the firm’s bottom line. That said, something that enables you to retain clients or create a market differentiator, should not be ignored if there is a good chance of it delivering measurable benefits over the longer-term. If you remain undecided, ask a few sceptics to highlight the benefits for you.
TEST FIVE – WHAT RESOURCES WILL IT TAKE TO EXPLOIT THE OPPORTUNITY? This is not just about financial resource but, importantly, the input of time from support staff, lawyers, management, and the marketing team. It is never possible to fully cost the development of a new product, service or system but, in the absence of some basic financial forecasts showing the best case, worst case and most likely outcome, it is hard to see how you can justify throwing the firm’s support behind it.
TEST SIX – DO WE HAVE A CHAMPION WILLING AND ABLE TO DRIVE THE OPPORTUNITY? If the answer to this is no, the opportunity’s a non-starter.