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A new survey from ALM Legal Intelligence, “Thinking Like Your Client: Strategic Planning in Law Firms,” discovered that strategic planning processes are run by managing partners and senior attorneys in law firms, according to The Herald Online.
“Historically, law firms have devoted far less effort to strategic planning than corporations do, instead just paying lip service to the basic rituals of planning for the next year or two,” said Kevin Iredell. Iredell is the vice president of research and continuing education products at ALM. “We’re now seeing law firms begin to apply more rigor and discipline to the task of measuring and managing their business performance. This gradual change might be accelerated by allowing senior business executives – such as COOs, CMOs and Legal Administrators – to be more directly involved in the strategic planning process.”
The survey also discovered the following:
Fifty-nine percent of respondents said that firm revenue growth targets are being hit so far. In the same breath, 44 percent claim that the firms are meeting profitability goals with clients.
The survey found that law firms are using traditional metrics to measure performance. The top measurements listed by firms in the survey include the following: firm revenue (52 percent), firm profit (44 percent), profit per partner (37 percent), utilization (30 percent) and operating margins (24 percent).
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The survey discovered that 56 percent of law firms have plans ready to build, track and measure loyalty of their clients and client satisfaction. Twenty-two percent of respondents said that they knew what business their top 20 clients were involved in.
“The realization that financial performance involves much more than hourly billable rates is causing law firms to fully explore cost structures, client loyalty, AFAs, compensation plans, staff leverage, and all the business drivers affecting profitability,” said Rutger Van der Wall. Van der Wall is the vice president & managing director at CRM & Analytics for LexisNexis Legal & Professional. “Fortunately, there are technology-based solutions that can measure, track, analyze and manage all that complexity to deliver the right information to the right people at the right time so they can make smart decisions and take action. That’s what it takes to achieve sustainable, long-term success.”
