December 01, 2019 Best of ABA Sections

Smart Leaders Set Smart Visions

Law Practice Division

Timothy B. Corcoran

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A key differentiator between a leader and a manager is the ability to set, and then execute, a strategic vision. Given the irreversible changes taking place in the global legal marketplace, marked by relentless price pressure, increased threats from nontraditional competitors, and the emergence of disruptive technologies and business practices, it’s more critical than ever for law firm leaders to have clear forward vision.

Setting the vision. The fundamentals of establishing a strategic vision are the same in any market: (1) understand your market, (2) understand your organization’s capabilities, (3) identify an unmet or underserved and ongoing market need, and (4) devote your energy to uniquely and profitably meeting that market need.

An effective strategic vision must be grounded in data; it must balance current capabilities and competencies with incremental investment; it must provide clear and measurable differentiation, whether on product offerings, service delivery, or price; and it must be grounded in economics.

Gone are the days where strategy meant seeking unsophisticated clients who hire brand-name law firms and view high billing rates as a proxy for quality. Some law firm leaders may dismiss these trends because their particular practices or clients aren’t currently impacted. Still, for those leaders who privately express a tiny shred of doubt as to the innate rightness and inevitability of their market standing, there are relevant lessons to be heeded.

Selling the vision. Lawyers tend to have a high preference for autonomy and skepticism, not the ideal audience for a law firm leader to announce a new strategic vision, especially one that may be disruptive or costly in the short term. So, the first step in selling a strategic vision is to avoid selling it at all. Good leaders embrace an inclusive approach to driving change by incorporating internal stakeholder feedback. Law firm partners and the accomplished business professionals who support them are quite often aware of trends that, when aggregated with other observations and analysis, provide meaningful insight on notable challenges and opportunities. Including stakeholders on an ongoing basis in the capture and synthesis of market trends means fewer surprises when results and subsequent actions plans are shared.

Including other stakeholders isn’t the same as crowdsourcing a strategy. Not everyone has to have an equal voice, but the more voices heard, the higher the adoption rate. Including others doesn’t necessarily dilute the strategy. It may come as a surprise to some law firm leaders that stakeholders impacted by tough decisions are often the most vocal supporters, as their ringside seat has given them more time to come to terms with the changing market.

The most compelling rationale for a new strategic vision is, of course, economics. Ideally, leaders can clearly contrast the firm’s current financial trajectory with an improved trajectory resulting from adopting the new vision. It’s a serious misstep, however, to equate the strategic vision solely with economics. For example, “We will have 250 lawyers and $200 million in revenue by 2021” is not a strategy. It’s merely an aspiration. It provides no guidance to achieve this aspiration. Lawyers may be resistant to change, but it’s more likely that they are resistant to change that is not demonstrably better than their current path, even when that path is marked by uncertainty. The onus, therefore, is on leaders to articulate a vision rooted in improved financial fortunes. Few lawyers will reject a compelling opportunity to generate more income and create a more certain future even when it involves some discomfort.

Implementing the vision. Many good strategies falter when coupled with ineffective execution. Because a good strategy isn’t developed independent of a firm’s resources and capabilities, understanding how to implement the plan should be an integral part of the planning process. The execution plan must have (1) a timeline, (2) financial and operational metrics, (3) a budget, (4) incentives, (5) internal and external communications plans, and (6) regular checkpoints. A strategic vision that requires new behaviors must be accompanied by an assessment and possible reworking of the firm’s partner compensation plan.

An overlooked but critical ingredient for the successful execution of a new strategic vision is delegation. The traditional consensus-driven law firm culture is steadily shifting as partners cede authority to elected firm leaders and senior business professionals. For some firms, unfortunately, this manifests in a law firm leader who adopts a “directing” style, who feels the role of a leader is to make numerous, important, time-sensitive battlefield decisions on behalf of the firm. This is tragically misguided.

Effective senior leaders establish the strategic vision and then empower managers to drive the implementation on a daily basis. The leader will, of course, participate in key operational decisions, but successful implementation requires the vision to be understood and then translated by line managers so every stakeholder knows his or her part. The leader cannot and should not drive implementation of the plan across all levels of the organization. An organization with such a leadership model is unwisely sensitive to the whims of the next leader, and the firm will often lurch from one half-achieved strategic vision to another every time a new person occupies the corner office. Sustainable strategic visions survive leadership changes because they’re driven by a compensation plan that is aligned with the goals of the strategic vision rather than a dominant personality.

What is your strategic vision? An effective strategic vision must be based on a comprehensive understanding of the markets in which the firm operates. It must include an honest appraisal of the firm’s capabilities and potential differentiators, if any, informed by internal stakeholder input. It must take into consideration what the market wants to buy and at what price, both today and tomorrow, and how clients will measure the quality of its service providers. The strategic vision must also be accompanied by an implementation plan, driven from the top down but executed from the bottom up, that ensures a profitable outcome by rewarding the necessary behaviors. The strategic vision must balance the needs of both short- and long-term stakeholders, often divided along generational lines.

The true test for any business leader applies to law firm leadership as well: If your ability to lead is based on your relationship capital and your deep knowledge of the organization based on a long tenure, you have a good chance of being effective in your law firm. However, if your leadership ability is measured by a recurring ability to understand and integrate external market forces with internal capabilities to develop a profitable and sustainable competitive advantage, you will assuredly be effective in any law firm.

ABA LAW PRACTICE DIVISION

This article is an abridged and edited version of one that originally appeared on page 32 of Law Practice, November/December 2018 (44:6).

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Timothy B. Corcoran is principal of Corcoran Consulting Group and a trustee and fellow of the College of Law Practice Management.

Published in GPSolo magazine, Volume 36, Number 6, November/December 2019. © 2019 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association or the Solo, Small Firm and General Practice Division.