Too often, law firms create practice group plans without thinking through the fundamentals of structure, leadership and accountability. The result: ineffective plans that gather dust on the shelf. Calibrate’s David Schaefer discusses the essential elements that need to be in place before practice group planning starts.
A lot has been written about law firms moving to a practice group model and having practice group leaders[1] prepare business plans. Before this movement, some firms had business plans and some did not, and some firms required their partners, and sometimes their associates, to have individual business plans and some did not.
Now enter the practice group movement. Some firms require practice group plans and some do not. Basically, there are eight permutations.[2] I have an opinion on best practices, but there is room for more than one opinion.
The threshold question is not who should do planning. The threshold question is whether the firm is a single business unit or a series of business units consisting of practice groups or a series of business units consisting of individual partner practices.
The next question is whether the status quo is desirable or whether the firm strives for a different model. I often have conversations with law firm leaders who are frustrated that that their practice group leaders either create business plans that are ignored or don’t create business plans that are more just a wish list or, after a time, don’t even bother to go through the process. Most firms are a series of business units consisting of practice groups or at least are striving to be. Accordingly, that will be my focus here.
Practice group business planning is but one element of the practice group model. The practice group model actually consists of three elements:
- Practice group management means that the leadership and management of the practice groups are intertwined with the leadership and management of the firm, and, for most firms, the business plans of the practice groups are likewise intertwined with and in furtherance of the firm’s business plan or strategy.
- Practice group planning is an annual process that should start with an assessment, should establish a select number of strategic goals that would make a material impact on the practice group, and should establish an action plan to achieve those goals, together with timelines, scorecards and, if applicable, a budget.
- Practice group implementation and performance is a combination of the practice group leaders and the members regarding the execution of the practice group plan. For the practice group leaders, it is also a matter of the day-to-day operations of their practice group.
The principal reasons practice group planning is not effective are that the predicate of practice management is not clearly defined and intertwined with senior management and, to that end, the job responsibilities and authority of the practice group leaders are not clearly defined. As is usually the case with management and leadership issues in any business, there is no one-size-fits-all approach. Moreover, as law firms make the transition to a business with effective management and leadership of its practice groups, the transition will take time and likely will have to be implemented in steps. That being said, the destination should be established and the initial steps defined and then evaluated at least once a year.
The following are the central elements of what an effective practice management program looks like.
A practice group management plan should be developed with input from as many firm leaders and influencers as possible. Once a plan has taken shape, it has to be sold to the firm to get buy-in and a commitment to execute. It is not unusual to start with a segment of the firm and to progress from there. In any event, once those steps have been taken and the practice group leaders in place, then the planning can begin.
[1] The terms “practice groups” and “practice group leaders” are used generically. Some firms use different nomenclature, such as departments and department chairs, and have practice groups or industry groups as units of a department. For ease of reference, the terms are used here as the top level of practice group management within a firm.
[2] The Eight Permutations of Planning
| Prepares a Business Plan | ||||||||
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | |
| Firm | Y | Y | Y | Y | N | N | N | N |
| PG | Y | Y | N | N | Y | Y | N | N |
| Attorney | Y | N | Y | N | Y | N | Y | N |
About the Author
David S. Schaefer is a Managing Director with Calibrate. A former Managing Partner of an Am Law 100 law firm, David advises law firm leaders and COOs on how best to align the practice of law and business of law to best push forward a firm’s culture, vision and strategy.
