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Best Practice Tips: What Is a Strategy for a Law Firm?


Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. We are an Oklahoma City law firm of 17 attorneys, 10 of whom are partners. Our firm does a little of everything. We have a three-member management committee of which I am a member. The firm was founded by four of the present partners 22 years ago. For many years, the firm was very successful; however, for the last five years, we have been financially hard-pressed and stagnant. We have been discussing what to do about the situation. One of our partners suggested marketing and another suggested that we needed a new strategy. We do not have a marketing plan and I didn’t know we have a strategy in place. I would appreciate your thoughts.

A.  A strategy is the firm’s decision on what services to sell, to whom to sell these services, and on what basis to sell these services. In other words, a law firm must determine what legal services to be provided, to which clients and in what geographic locations, and how these services will be differentiated from those provided by other law firms. Law firms can choose a broad or narrow range of clients. Law firms can compete either on the basis of price, quality of service, or expertise. Firms compete on price by charging lower fees than their competitors. If the firm’s clients perceive that the firm has unique advantages over its competitors in the way services are provided, then the firm is competing on the basis of quality of service. If the firm offers its clients a superior knowledge base, it is competing on expertise.

Your strategy or lack of a strategy has been broad. A narrower strategy is appropriate in today’s competitive legal marketplace.

Here are a few suggestions for narrowing your strategy:

1.      Commit to one mode of competition – price, quality of service, or expertise.

2.      Select a strategy compatible with industry conditions.

3.      Select a unique niche.

4.      Diversity practice area risks.

5.      Select a strategy compatible with the firm’s internal environment.

6.      Look for practice areas in which the client is at great risks.

7.      Turn away clients.

I suggest that you study up on the strategic planning process and engage all of your partners in the process and comes to terms with an appropriate strategy for your firm. Then develop a strategic plan and use as your roadmap for getting there.

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John W. Olmstead, MBA, Ph.D, CMC, (www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics and author of The Lawyers Guide to Succession Planning published by the ABA. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact John at jolmstead@olmsteadassoc.com.

 

Posted on Nov 01, 2017 by Sara Anderson | Comments (0)
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