Professional Services Accounting ARTICLE -
Road Map for Success: 7 Ways To Distinguish Your Group From the Competition
Target Audience: Legal Professionals, Professional Service Firms, Law Firm Partners, Nonequity Partners
Practice groups realize they should be boosting their firm’s profitability. But they may not know how to get there. A business plan designed specifically for the particular practice group can serve as a road map, outlining goals, strategies and performance measurements.
Starting Your Journey
The planning process should begin with an evaluation of the practice group. For example, what’s its position in the market? What clients, industries and niches does it serve? If it continues as it has been, where will it be in one year? Five years? Is that the desired destination?
Where many practice groups fall short is in failing to differentiate the group from its competitors. In your plan, compare your services to other firms’, focusing on what sets you apart. Then list your measurable selling points — your products, services and capabilities — as perceived by your existing and prospective clients. (See “7 distinguishing factors” at right.)
To get a true assessment, be candid about your strengths and weaknesses and have an outside party survey your practice group’s clients. Ask open-ended questions that probe for specific details. To discover the characteristics that distinguish your firm, target clients who use multiple law firms.
Mapping It Out
A practice group business plan should address what the firm expects from the group and include two to three measurable goals that will contribute to the firm’s strategic goals. Goals might include achieving certain financial targets, bringing in a specific number of new clients or hiring a set number of attorneys with practice experience.
The plan doesn’t have to be lengthy, but it should address core issues, such as quality of client service, marketing and image building, training and development, and revenue and profitability. Many firms tend to focus their practice group’s business plan on a slew of elaborate marketing strategies, such as clients to target and cross-selling opportunities. But a more useful approach is to concentrate on practice management activities that enhance your firm’s unique offerings. Here are some activities to consider:
- Creating new services,
- Increasing your group’s capabilities through strategic partnerships,
- Using special training methods ranging from substantive CLE courses to in-house curricula to career development programs to partnering with schools and institutions, and
- Giving clients value through tools not available from your competitors, such as proprietary software or customized bills
Along with clear goals, have measurable objectives that will demonstrate the group’s progression toward each goal. For example, if you have a health care practice and one of your goals is to bring in one new client per month, objectives might include attending health care industry events quarterly and adding referral sources to the mailing list for your health care law newsletter. Outlining the steps needed to reach each goal will help keep employees motivated once planning is over and implementation begins.
7 WAYS TO DISTINGUISH YOUR GROUP FROM THE COMPETITION
Practice groups can determine how to set themselves apart from the competition by evaluating these seven factors:
1. Service range.
Do you have more lawyers than your competitors? If you’re an industry practice, can you provide more types of services to that industry?
2. Technical expertise.
Do you have lawyers with special practice-related knowledge, such as an environmental lawyer who previously was a scientist? Does your firm have acknowledged experts in this practice area who have published numerous articles or books on the subject or who teach courses on the practice area?
3. Service delivery.
Do you provide service in a unique way, such as using technology to streamline a process?
4. Client relationships.
Do you have solid, institutional relationships with longtime clients who are movers and shakers in their industry?
5. Segment expertise.
Do you have significant expertise in a particular industry or niche, such as aviation or medicine?
6. Geographical capability.
Do you have multiple offices in multiple states or countries? Or do you have knowledge of a particular jurisdiction or area of the country?
7. Price.
Are your clients willing to pay premium rates because of the differentiating factors above? Or do you have to compete on price?
Helping With the Driving
All practice partners should contribute to the plan’s development. This will ensure that everyone’s input is given, thereby creating a sense of ownership among the entire group. Including associates as well can generate fresh insights and ideas.
To help create accountability, assign specific responsibilities to each partner.Your compensation plan also should allow credit for activities unrelated to billable time. Other motivational tools — such as time off, tickets to an event or paid membership to a health club — can further enhance accountability.
Soliciting Roadside Assistance
Practice management professionals can play an important role in developing your practice group’s business plan. They can provide you with valuable information ranging from client profitability data to market research on the competition, as well as help direct planning meetings.
Also, these professionals typically have planning experience, so they can streamline the planning process, reducing the time it takes to develop the plan.
Staying On Course
To ensure the plan is being followed, monitor progress at your practice group’s regular meetings. Developing “to do” lists and setting deadlines for meeting objectives is an effective way to keep the plan top of mind. Performance measures are important because they set expectations and provide an objective way to evaluate progress. Metrics used to gauge the success of a practice group include:
- The number of new clients,
- Total number of clients,
- Amount of new fees from existing clients,
- Total fees generated,
- Amount of positive client feedback, and
- Number of referrals
Other more difficult but important measures are improved business development skills and brand awareness, participation or leadership in the ABA or the local bar association groups devoted to that particular practice area, and writing articles for legal publications on matters of interest for those who practice in that particular area of law.
Getting To Your Destination
A well-designed practice group business plan will give your group a sharper focus to stay on track. It’s the road map you need to help get your firm to its destination more quickly. At the end, you can look forward to enhanced services, greater client satisfaction and increased profitability.
Find out how our expertise in professional services accounting can add value to your business. Email us or call us at 1 (888) 875-9770.
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