The Five Questions: Creating a Vision for Your Firm

As law firms begin a strategic planning process they often seem to get fixated on creating mission and vision statements.  Now, having a clear vision of what the firm is attempting to become is essential to creating a strategy, but it is easy to devote so much attention to the vision that the planning committee loses energy and interest before they even get to the strategy.  In fact, if the planning committee is of a rational size and has a competent facilitator, creating a vision shouldn’t take more than a couple of hours – maybe less.

It is not uncommon for law firms to miss the point of strategic planning.  In part this is because many partners have served on strategic planning committees for their church or a charitable organization and they bring that experience to the law firm.  Churches and charities are notoriously “touchy feely” in creating a strategy – the soft stuff is part of their purpose.  But, because non-profits are not in the business of maximizing profit or dominating competitors, the experience that partners who have worked on those plans bring to the process is typically very internally focused.

Another difficulty, results from lawyers being naturally action oriented.  This can cause them to be so focused on the “planning” aspect of the process that the strategy becomes a giant to do list.  There is a significant difference between planning and strategic planning.  Planning involves describing a list of actions that will hopefully result in a desirable outcome.  Strategic planning involves creating a very clear and specific vision of the firm in some period of time, usually three to five years.  That vision is compared to where the firm is currently and the strategy becomes the actions that must occur to get from point A to point B.

Simply stated, the basis of any strategy is for the firm to create a clear picture of where they are going and develop an accurate understanding of where they are now.

Who Are We Now?

If a strategic plan is designed to move a law firm from point A to point B, the logical place to start is point A.  Frequently, firms leaders (especially if they are lifers who have spent their entire careers with the firm) have a myopic and highly dated sense of their firm’s capabilities and position in the marketplace.  So it is well worthwhile to test the presumptions that we may take for granted about our firms.

Leo Tolstoy wrote a short story in 1885 called The Three Questions.  It was about a King who felt he would always be successful and never fail if he only knew the answer to three questions.  Similarly, if you want to develop a strategy that will drive your firm’s success, you have to start by answering five questions about yourself.

1. What do we do?  What are the services your firm offers in what areas of practice?  The flippant answer is that we are a general practice firm so we do most anything.  Of course, there are undoubtedly some things your firm doesn’t do because you are not competent to do them or no client ever seems to need the service.  But, realistically, in most firms the bulk of revenues come from a handful of practice areas.  Focus more on what you are recognized for doing rather than trying to create a comprehensive list.
2. How do we do it?  Is there any unique aspect to the manner in which the firm provides these services?  Do you utilize a highly leveraged model or do partners tend to operate very independently?  Does the firm bill by the hour or utilize some other method of calculating fees?  Are our rates competitive or do we get business by underpricing competitors?
3. For whom do we do it?  How can the client base of the firm be characterized?  Are most of the clients businesses?  Do you deal mainly with major corporations or entrepreneurs?  Who does your work come from, business owners, managers, general counsel, consumers, etc.?  Do a few clients make up the bulk of the firm’s revenue or is the client base widespread?  Do you do a variety of work for most clients or are the clients unique to each practice area?
4. Where do we do the work?  There is local work and non-local work.  Does most of the firm’s practice come from clients that are located in regions where the firm has an office?  Is the bulk of your work situated in your immediate geographic area?  How much of your work is national or global?
5. Why are we in business?   The knee jerk reaction is “to make a profit,” but we know that most firms have partners who are more interested in having challenging and enjoyable work to do than doing what is most profitable.  By the same token, there are partners who are only concerned about making enough money to support their lifestyle – having time for their family or their hobbies.

Creating a Vision

With the understanding of where the firm is now, look forward three to five years (anything longer than that is silly – the world is changing too quickly).  How would you like to answer those questions at the future point?  Describe the answer in a couple of paragraphs and your firm has a vision statement.

Okay, I made the process out to be easier than it really is.  But the point is, the more clearly a firm can articulate what the desired outcome is (i.e., point B), the easier is will be to determine the strategies necessary to get there.