Monthly Archives: May 2014

Tackling Smiling Assassins – Clients not bothered enough to complain to you … but they do to everyone else?

Beware the “Smiling assassins” i.e. the dissatisfied client who says nothing but tells all his/her work colleagues, business network and family what a tough time they had dealing with your lawyers.  They are a very dangerous animal. 

A report from the Legal Services Consumer Panel on recent research suggests that 44% of people dissatisfied with legal services don’t complain, compared with just 27% in the services sector overall.  As with any statistics, the numbers can be challenged and interpreted in different ways; but however you read this, it is a significant number.

The good news in the survey is that overall levels of satisfaction with legal services are holding steady, at 79%. Levels of public trust are also up, with 43% of the public trusting lawyers to tell the truth, up from 42% last year. In this league lawyers rank behind doctors and teachers but marginally ahead of accountants and well ahead of bankers.

The challenge here is to find ways to talk to or get feedback from the silent clients “in the middle”.   Not just the clients prepared to sing your praises and those keen to make a complaint but those who are suffering in silence … and you don’t know that you should be doing something about it.  Until you do, they will keep damaging your reputation.

We can help.

When mergers and acquisitions fail to live up to their promise … where do you start?

Culture Clash!

Guest blog from Chris May; a practising solicitor and former Principal Solicitor at the Co-operative Legal Services and formerly a CEO and Operations Director.

When firms come together through acquisition or merger, results often fail to live up to initial expectations. So what steps can be taken to maximise the benefits and avoid the inevitable pain when things go wrong in a law firm merger or acquisition?

After the initial wooing and due diligence, the major efforts turn to operational and financial issues. Removal of duplication, setting financial targets and getting IT systems integrated are usually the main focus. Here measures can be applied, senior management and staff held to account and evidence gathered.

The more thorny issue – and one that can ultimately be destructive – is the issue of culture. Culture is hard to define and even harder to apply measures to. Understanding culture – and mitigating the effects of any differences – is the key to a successful outcome.

Whether it’s a law firm or an external investor, a major constraint is resource. Understandably, firms rarely have the spare resource or tools in-house to address all the issues they need to. Moreover, understanding the cultural differences may highlight changes which are needed on both sides. Something that may be less palatable for the acquirer then the business being acquired.

Steps to get the best out of a merger or acquisition

1.  Set the agenda

Culture often develops organically and is unplanned. It defines the way the management and staff think, feel and act and includes the values, working language and habits that develop in a firm. Setting the agenda has to be led from the top: what culture should emerge? It is one that is to be imposed top-down or a blend – combining the best of each. Understanding where the greatest value lies is the key – and that may well differ between departments and functions.

2.  Understand the differences

Inevitably, there will be significant differences between cultures. Recognising these and quantifying their nature and extent needs to be done early on. Tools that can help are:

  • Map decision making processes in each organisation and accountability
  • One to one discussions with senior management
  • Evidence gathering from other staff – observation, interviews and surveys
  • Client interviews
  • Understanding what each business does well and not so well
  • Identifying where the biggest gaps exist
  • Understanding the gaps

To contrast the survey results of staff or clients, use a simple “word cloud” program – these can be purchased or downloaded free from the web using the search term “word cloud software” on Google. This gives weighted results according to the number of similar responses.

Culture Word Cloud

Compare the results between the firms.

 

 

 

 

 

 

3.  Define what you want to create

Understanding the gaps can help to prioritise the most important points to address as well as defining the ultimate culture to be created. This needs to be clear and firm enough to be addressed in a cultural change plan, containing actions for management to execute as well as measures to assess success.

4.  What help is available?

If you’re planning to merge or acquire, the time to start planning cultural integration is during the due diligence phase. It should be an integral part of the information that’s gathered and form part of the blueprint for the future. You can get help to:

  • Develop an integration strategy
  • Develop a detailed implementation plans
  • Coaching to key internal staff
  • Plan and manage the actions required
  • Co-ordinate the project
  • Manage people issues and programme communication

Chris May is a practising solicitor and former Principal Solicitor at the Co-operative Legal Services and a former CEO and Operations Director.

What can you achieve and do you want to make happen? We can show you how and help you do it.

Unlock CashRunning a workshop for a group of partners and fee earners for one of our clients on Friday reinforced the need to quantify the benefits that can be derived from new initiatives aimed at improving the business. 

What does that really mean?  What can really be achieved and what needs to be done to achieve it? 

Which reminded me of these numbers produced by Jon Miller from his real world experience as an FD in a law firm and consultancy work since then.

Example:  Through better financial management – and without generating any new business at all – a typical 40 fee earner practice can:

      • Reduce your overdraft by £675,000 over 3 years
      • Generate extra cash and profit of £175,000.
  • Release £200,000 against your overdraft.
  • Release £500,000 against your overdraft … and more.

Double these numbers if you are 80 fee earners etc.

Here’s how – but you need to be able to get firm-wide engagement, monitor performance and work together on a daily basis to keep up the momentum and stay on track.

To find out  how this can work for your practice, contact Allan Carton or Jon Miller on 0161 929 8355 or complete this contact request form.  We won’t charge you or require any commitment from you for a free, confidential consultation. 

Productivity (Utilisation) Take, for example – 40 fee earners charging 1,000 hours each.

  • Suppose each charges just one more hour per week which is billed at the average £125 across 45 weeks.
  • Creates an extra £225,000 income, profit and cash.
  • Net profit from 25% to over 28%.

⇒ Reduces overdraft by £675,000 over 3 years.

Expenditure
  • You probably already have significant fixed costs, so in the short term – attack the variables.
  • Assume £1.75m of £3.75m costs are fixed in short to medium term
  • Reduce remainder by 3% each year over 3 years – not too radical

⇒ Extra cash and profit of £175,000.

Work in Progress
  • Examine procedures for moving work through quickly
  • Terms of business aimed at billing WIP at the earliest opportunity.
  • Aim to reduce WIP balances by only 5% over 3 year period.

⇒  This will release £200,000 against your overdraft.

Debtors
  • Agree billing period with clients – monthly if possible.
  • Communicate overruns before sending a bill.
  • Set standard collection procedures which partners cannot easily override.
  • Aim to reduce debtor period to 2 months in three years.

⇒  This will release £500,000 against your overdraft.

Disbursements
  • Paid disbursements are the issue.
  • Adopt “Zero tolerance” on unfunded disbursements where possible.
  • Ensure processes are followed in areas (such as Personal Injury and Litigation) where some funding is possible.

⇒  There are savings to be made: not added as they are variable

 If you want to find out how to make this happen in your practice, contact Allan Carton or Jon Miller or complete this contact request form.