What I usually see in legal firms is a very dysfunctional information flow and decision-making structure. I see a lot unproductive discussion, lack of decision making and minimal if any implementation. If you want to get a different outcome, you need to do something differently. What this means is:
- Business decisions need to be made in a timely way and then implemented
- If you want to change an outcome, you have to change the behaviours of the business to achieve that different outcome. To change a behaviour, you must change the business structure that drives that behaviour. This also means that you need to change your thinking. Ultimately what we think drives our feelings, which then in turns drives our behaviours. So, the structural changes that must be made are:
- At the business level:
- Decision making
- At the business level:
- At the personal level
- What we think and how we think
- At the personal level
To create change in your law firm, you must change the structure around how decisions are made, and the structure around how decisions are implemented. No change in structure and no implementation means no changed behaviours and the same outcomes. Remember, Einstein defined insanity as doing the same thing over and over again and expecting a different result (READ MORE: The Revenue Revolution for Law Firms – Hope is not a strategy). To develop a culture of implementation and outcomes, you need to make sure that the decision-making structure and implementation of these decisions is organised and structured itself for success in implementation. This means discipline: disciplined thoughts, disciplined decisions, disciplined actions produce disciplined outcomes. Discipline at the individual, department, management and strategic levels of the business.
As a framework to drive changed outcomes, you need to create a FLOW in the business of all the moving parts so that they come together to achieve the required outcomes. This generally starts at the top of any law firm. The higher the level of clarity, and the decisiveness of action planning and implementation, the quicker and easier it is to produce different outcomes. To achieve results, most people require a structure to work within. This structure needs to be clear around expectations and have boundaries. A business that lacks structure is a dysfunctional organisation, and discussion is a talk-fest which distracts people from doing their core jobs. Structure brings order to chaos.
To reduce the NOISE in a law firm (aka talk-fest and inaction), you need to focus on action not on discussion. Everyone has a job to do to make sure the moving parts come together to achieve the outcome required. If someone is given responsibility to co-ordinate a function of the business, they should be also given the responsibility to make business decisions autonomously, within guidelines. These guidelines are basically governed by the law firms agreed strategic actions to implement and the law firms core values. Work out the plan, and delegate implementation to the right person.
The individual roles in an action focussed organisational structure are:
- Board – these are the principals. The principals decides on the overall direction and goals of the business/organisation.
- Managing Director/Managing Partner/CEO – the role of the MD/CEO is to an oversee the implementation of the strategic business plan. It is to hold the business accountable for the implementation of action. They lead and support the Functional Co-ordinators and they are the guardians of the strategic business plan. The MD/CEO is responsible for the achievement of the strategic plan in the business. It doesn’t mean that every decision must be made by the MD/CEO, this is delegated to Functional Co-ordinators.
- Functional Co-ordinators (Admin and Revenue) – these people have been delegated the responsibility to co-ordinate the implementation of the actions required to achieve their functional outcomes
- Admin – management, co-ordination and implementation of the key functions of accounting & finance, premises, IT, HR policy & process (not fee earner management). This includes development and implementation of actions to manage cashflow, billing processes and reporting. Timely and accurate reporting is the key so that decision making at each level of the business is being made based on accurate and timely empirical data. Without this, at best, decisions can only be made on gut feel, which tend to result in unstructured, dysfunctional outcomes.
- Revenue – management and co-ordination of revenue outcomes as they relate to product, marketing, sales, production and client service. From a production perspective, this includes workflow throughput and billing targets. The Revenue co-ordinator is to hold each department co-ordinator accountable for the efficient operation of their department and achievement of their departments outcomes in terms of profitability, workflow and quality. The achievement of these outcomes is the responsibility of each department co-ordinator
- Department Co-ordinator – responsible for the efficient operation of their department and achievement of their department’s outcomes in terms of profitability, workflow and quality
A culture of responsibility and accountability at every level is required for success. This doesn’t mean “ruling with an iron fist”, it means disciplined people taking disciplined actions and focussing primarily on the responsibilities and duties at hand. To achieve this, a law firm needs to create a FLOW around the accountability and actions, understanding and holding true the roles and responsibilities of each of the roles above in the functional structure. This is achieved by a series of structured meetings with specific agendas (nothing else is to be addressed at these meetings other than the agenda items)
- Annual strategy
- Review quarterly results
- Address financial concerns or major strategic issues (not operational issues)
- Update on completion of action plan for the quarter and progress on annual plan
- Development of action plan for the next quarter
- Monthly – review financial results of the business
- Profit for the month
- Cash flow position and projected cash flow
- Departmental profit results (including WIP)
- Weekly meeting focussing solely on the implementation of the strategic outcomes and updating by Functional Co-ordinators
- Update from each Functional Co-ordinator on their quarterly action plan implementation (not appropriate for response to be nothing this week, unless the action plan is implemented)
- Monthly (individually with Functional Co-ordinator)
- Review actions for the month, review numbers
- Weekly workflow and billing meetings
This is the structure that I have found gets the FLOW going in the law firm. The key is to focus weekly and daily at the department level on day-to-day operational outcomes and to work weekly and monthly on achieving strategic outcomes. If the entire team is aligned to how the business operates in terms of co-ordination of action implementation and decision making, the key people can just get on with doing what they need to be doing.
In addition, if the MD/CEO is seen as the place where every decision needs to be made, then the Functional Co-ordinators will be toothless tigers, that’s why decision making needs to be delegated. In saying this, it’s also critically important that people refrain from sticking their noses in and having a say. If you want someone to be responsible for their actions and outcomes, you need to trust them to make decisions autonomously and do what they need to do. They also need to know that you are there to support them and guide them, when they ask for it. If these lines are blurred, the whole system falls apart.
Remember, you need to do something different to get a different result. Focus on the good things (which are usually the majority) and manage the exceptions (which are usually the minority). You can choose where to focus your attention.
Get in touch with Matt Schlyder, to learn more about the functional structure of your law firm.
Get expert tips on how to Grow Your Law Firm. Subscribe to GYLF Blog today!