I have long believed that being value-driven and profitable are not mutually exclusive. To achieve this vision, law firms must look beyond financial measures alone when defining their business strategy.
This isn’t to say that the financial metrics are not important. Indeed, they are critical to understanding the business and ensuring profitability. The client-centric approach merely recognizes three additional perspectives that need to be examined along with finances.
> Client Insight
> Business Process Improvement
> Market Intelligence
The client-centric approach begins and ends with the client. The baseline question is simple: What can we learn from our clients to help us build our business?
The analysis needs to incorporate formal and informal feedback from clients so the firm can objectively answer:
> How satisfied are our clients?
> Are we a trusted advisor or just providing work in one area?
> What are we doing well?
> Where are we falling short?
Based on this data, the business plan can address service gaps with specific action items.
The next area of analysis is the market perspective. Specifically, who is the firm’s target market and what steps are in place to reach that market in a consistent and ongoing way.
This includes an assessment of client demographics and the trends impacting those demographics. It also requires an assessment of competitor firms.
With a thorough knowledge of the market and the competitive landscape, the firm can identify strategies to support growth.
Business Process Improvement
The next step is to evaluate the firm from the perspective of business processes.
In other words, “To meet the needs of our clients how can we create or improve upon the existing workflow to improve our efficiency, effectiveness and ability to better manage client expectations?
Finally, we return to the financial analysis. The question here is, “What do are numbers need to look like to succeed financially?”
This includes a comprehensive understanding of where your revenues are coming from and what your costs are. Understanding who your clients are, what revenue they generate and for what type of work will further support your efforts to grow and expand.
By combining all four perspectives in the analysis of the business, law firms have the opportunity to build a vision that will allow them to address the client needs, business process improvements, market challenges and financial goals.