Rachel Stow outlines her blueprint for how PI firms can adapt to a more competitive and challenging legal landscape.
Law firms are going through their most challenging period to date. New business models, increased competition and changing legislation have all resulted in a perfect storm. While some have left the market altogether, others have opted to merge, or in our case, restructure.
In common with the owners of many personal injury law firms, the announcement three years ago of major legal reform sent a shiver down our spines. We were a profitable, well-run firm but we realised that we had to adapt to the new legal landscape that was coming if we were to remain so.
We were fortunate in that we had always run the firm as a business providing legal services, not simply a law firm charging by the hour. I would, however, be lying if I said that the announcement of major legal reform did not cause some introspection, and yes, some panic regarding the savagery with which the cuts in recoverable costs were made. But we quickly overcame that by focusing on what being ‘fit for purpose’ meant and by facing up to the reality of reform as quickly as was practically possible. After all, law firms today are people, process and service businesses.
In doing so we paid special attention to ensuring that no role was deemed more important than another. Everyone in the business had their part to play.
So now that we have been there and done that, here is what we have learnt:
One project, one team: We took the view that iit is not the sole responsibility of the management team or senior partners to restructure the business, so we set up a project team to include representatives from the whole firm. Not only was this important in getting all voices heard, those representatives played a crucial and trusted role in cascading information back to their respective teams and preventing rumour and uncertainty, which can delay, if not, derail a restructure.
Communication: Every week, without fail, we gave a whole firm update. Even if there was no update, the message was ‘no update and here’s why…’ Never forget that people are paramount as they influence culture, which sets the tone for all you do in business.
Manage expectations: A restructure can often mean moving individuals into different roles or getting them to perform additional tasks. It is not uncommon to hear a lawyer say: ‘That’s not what I was trained to do.’ That might be so but the reality is a deregulated market and increasingly savvy buyers of legal services. Equip your lawyers to meet the challenges of the new legal world, or help move them out to a more traditional environment.
Baby steps: Manage change in small chunks. Start from where you need to get to and then work backwards, breaking down every single step. In doing so, be realistic and allow time. Looking back I am particularly pleased we acted when we did. It gave us a chance to make mistakes.
Make sure you can track whether the changes are working: Think very carefully about your MI before you start the process. You need to be able to track during and after the process how the changes are impacting on your business, otherwise you’ll never know if restructuring was worth it.
Finally, don’t be afraid of what you don’t know: As I said, we made some mistakes along the way, but the fact is that if we had not done some of those things and made the mistakes we did, we would not be where we are today. We learned along the way. Importantly, we never put all our eggs in one basket and never became solely focused on one avenue for success, we were not afraid to try – it proved far better than standing still.
Rachel Stow is managing director of Thorneycroft Solicitors.