STRATEGIES FOR PLANNING A RETREAT
by Joel A. Rose
Law firm retreats are a management tool that can be used in a variety of ways. Some firms use this forum as an opportunity to review trends and developments in the firm's practice areas, and to present objectives and economic projections for the future. Other firms may schedule a retreat in order to address specific issues in an effort to build consensus among their members. Oftentimes the retreat is prompted by a problem. More than likely this takes the form of a less than desirable turn of events involving firm economics which, ultimately, may be tied to the management of substantive practice areas and/or methods of firm governance and systems for profit distribution. The results to be achieved are thus determined by the set of circumstances that prompt the retreat in the first place. If the firm is experiencing a downturn in net profits, then the goal for the retreat is to determine why this is happening and what to do about it. In the following case study, the author describes the experiences of one such firm.
A firm of 65 lawyers was in serious straits. During the past five years it had expanded its practice by acquiring six smaller firms that were located within the outlying suburbs of its main office. A few years back it had also set up two satellite offices located on the coast. These were not especially successful nor troublesome enough to do anything about, and at best garnered an ambivalent response. The firm's gross revenue had in fact increased over the past three years, but net profits were sinking while expenses were rising, and the partners' draws were falling. The troops were rumbling. Morale was poor and the factions were drawing into camps divided more or less along the lines of us vs. them, or either branches vs. the office, or senior partners vs. younger ones, or litigators vs. tax department, etc. The executive committee knew it had to act quickly in order to rally the firm and prevent an escalation of the crisis.
In order to mobilize its resources, the firm appointed a retreat planning committee that consisted of six partners and the administrator. It also elected to engage the services of an outside consultant. The partners who had been selected to serve on the committee represented the firm's major practice areas and branch offices, and were drawn from the various age groups of partners who had a key role in administrative and substantive management. This decision was politically expedient and critical to the success of the retreat. By involving a broader range of partners in the planning process, management hoped to build a basis for consensus by drawing in the various factions that were threatening to splinter the firm. The use of a consultant was deemed necessary in order to allay charges that the executive committee had lost its objectivity in managing the firm, and was serving its own interests not the firm's.
The consultant met with the members of the retreat planning committee in order to discuss the proposed objectives for the retreat. In addition to formulating a strategic plan for the firm, the committee also wanted to use the retreat as a method of encouraging the partners to relate to one another on a personal level, and not only as lawyers. During the course of individual interviews with members of the retreat planning committee, the consultant identified the issues that had to be dealt with at the retreat. The final selection of topics was achieved with the consensus of the committee and included the following areas of concern:
The next phase involved the development and preparation of a retreat planning questionnaire for distribution to the attorneys. Because of the numbers involved, the firm elected to limit the survey to its partners. The objective of the questionnaire was to obtain the attorneys' opinions and assessment of firm culture, economics, governance and growth; practice management, marketing and development; and their personal and economic goals and relationships with each other.
The survey was quite extensive and detailed. Yes, it did take time. Yes, there was resistance and grumbling. However, for this particular firm it was a means of drawing all of the partners into the planning process. The following is a sample of the kind of questions that were included in the survey.
A. Goals and Culture
1. Identify general goals for the firm and rank them in order of importance to you.
2. Suggest steps the firm should take to influence its future.
3. Identify and rank personal and professional objectives.
4. Assess the firm's environment.
5. Describe your current satisfaction with, and major complaints about, the firm.
B. Firm Governance
1. Evaluate the current methods used for determination and implementation of policy.
2. Describe the present form of governance - and your level of satisfaction and suggested changes.
3. Assess the effectiveness of the Executive Committee, Managing Partner, Practice Development Committee, Planning Committee, Associate Recruiting and Development Committee, Compensation Committee, Director of Administration, etc.
C. Firm Growth
1. Assess your satisfaction with the firm's rate of growth over the past three years. Suggested growth rate for the next five years?
2. Evaluate the current ratio of associates to partners. What do you suggest?
3. Evaluate the utilization of paralegals by specific practice area.
4. Should the firm establish new offices? Where? Why? Should they be self-sustaining from the start, or should the firm risk additional seed money?
5. Describe the capability of the firm to meet its future needs within existing practice areas? Which areas need improvement?
D. Partner/Associate Relationships
1. Should the firm continue a class of non equity partners?
2. Should the firm establish a classification of "permanent non equity" partner?
3. Analyze the criteria for elevating associates to non-equity partners, and promoting non-equity partners to equity partner status. Discuss whether these criteria are satisfactory for the firm's future.
4. Suggest ways the relationship between partners and associates could be improved.
E. Firm Economics
1. Discuss your satisfaction with the firm's gross revenue and net profit.
2. Are you satisfied with your annual cash compensation?
3. Should the firm set requirements for annual billable hours? Suggest the number of hours that should be recorded, both billable and nonbillable, on an annual basis by senior, mid-level, junior, equity and non-equity partners, associates and paralegals (by category).
4. Recommend methods for improving the firm's economics.
F. Practice Management
1. Evaluate the current organization of practice groups and interaction between offices. Provide recommendations for improvement
2. Assess the effectiveness and performance of the practice area heads in terms of work assignments, meetings and other communications, training, review of status of files, quality control, plan for practice development and methods to encourage cross-selling services of other practice areas.
3. Assess the relationships between office heads and the heads of practice areas.
4. Evaluate the practice areas (including branch offices) and the production of legal work in a timely, quality and profitable manner, i.e., staffing, quality and balance of expertise, etc.
G. Marketing & Practice Development
1. Evaluate the practice development activities of the firm by specific practice areas, branch offices and individual attorneys.
2. Analyze the volume and categories of work you have performed for the firm's clients over the past three years. Do you foresee any changes?
3. Identify the trends affecting clients and their industries that may alter the firm's relationship with, and volume of work for, its clients.
4. Identify the opportunities for future growth by branch office and substantive practice area.
5. Identify the kind of legal work that should be emphasized or de-emphasized over the next three to five years.
6. Provide recommendations for developing new business from former, current and potential clients.
By the time all of the questionnaires were completed and returned to the consultants for tabulation and editing the next stage of the process had been set in motion. This involved follow-up interviews by the consultant with selected partners. The criteria used for selecting a representative number of partners to be interviewed included age, practice area, membership on firm committees, department head, etc. Also, some of the responses on the questionnaire signaled that an interview was in order. Again, this element of the process was crucial in establishing firm management's commitment to include the partners in the planning process for the retreat. With the assurance of complete confidentiality, the partners interviewed supplemented and elaborated on their responses to the survey questionnaire.
Interestingly enough, the questionnaires had revealed that there was more common ground between the dissenting factions than had been apparent previously. One of the questions requested the partners to state a purpose for the retreat. Their answers were in line with the initial proposals submitted by the retreat planning committee and included the following points:
Once the salient points raised by the partners in the interviews were reviewed against the proposals submitted by the retreat planning committee, the consultant was able to develop an agenda for the meeting. The topics to be covered were narrowed to the following: (1) a comparative financial report on the firm's economics; (2) long-range financial projections; (3) firm administration and practice management in light of the role, accountability and authority of the partners; (4) setting firm objectives for the next three years; and (5) determining and administering the partner compensation plan. The format for the retreat was based upon one of the primary goals stressed by the planning committee, namely the importance of having all of the partners participate in the discussions. This involved an initial presentation by the consultant that included a summary of the survey results and review of case studies of practices followed by other firms on each of the major subject areas. Once the attorneys were armed with information on the firm's current status and examples of possible solutions, they broke up into five workshops consisting of between nine to twelve partners.
The partners were assigned to designated workshops prior to the retreat. The planning committee and the consultant also selected a workshop coordinator for each group. The role of the coordinator was to stimulate the discussion, adhere to the topic and time schedule, and maintain general order. In addition, a second partner in each group was charged with taking notes and recording the consensus reached by the attorneys on specific issues. Following each workshop, the partners regrouped as one body to discuss the results and their conclusions. This was followed by a general discussion of recommendations for action.
Because of the number of partners involved and the volume of work to be accomplished, the retreat was planned for two-and-a-half days at a facility away from the office. The site selected was a resort with facilities for golf, tennis, boating, etc., to provide the partners with an opportunity to get to know one another on a different level. The planning committee felt that by socializing the partners could personalize their relationships and begin to understand and appreciate each other in a more positive light.
In the late afternoon after arriving at the resort and prior to dinner, the partners gathered for the first meeting where the consultant presented a review and comparative analysis of the firm's finances. Since economics had ostensibly initiated and tumbled the firm to the door of the retreat, it was strategically important to begin with the current state of affairs. The point of this was twofold. Firstly, the financial data underscored and reinforced the general feeling that things were not as sound as they might be. Secondly, it established a concrete starting point from which the partners could begin to see their way clear to plan for the future.
Following dinner and cocktails, the partners met again for a presentation concerning long-range financial projections. Thus, the stage was set. The remaining three topics were spread out over the next two-and-a-half days. Although the meeting could have been shortened by about half a day, the planners wanted to permit some time for social activities in between the sessions. Pointedly, the retreat concluded on the same topic that had prompted it at the start. The subject was economics, or formulating a compensation plan.
Did the retreat work? Most assuredly! Much of the work involved was in the preliminary preparatory stage. The retreat planning committee and the firm's administrator together with the consultant proposed the topics and prepared the agenda. The workbook and syllabus was published and distributed to the partners prior to the retreat. It included the overall agenda and workshop discussion outlines on each of the topics; the firm's financial data and analysis; and the survey results and composite of partners' comments (edited to preserve confidentiality). In addition to providing information, the handout material functioned as a tool in preparing all the participants, both leaders and attorneys, for their role at the retreat. The administrator had investigated the retreat facility to review the meeting space, accommodations, food, service, available activities and ease for travel. Since this was to be a working meeting, the committee decided to limit attendance to partners and exclude spouses or guests.
In conducting the retreat, the consultant stressed the main rule which was that nobody was to impede another's effort to express their view. No personal attacks of any kind. Any negative comment or criticism was to be balanced by a suggested remedy. If a topic under discussion could not be reasonably resolved within the allotted time, it was to be referred to a specific committee or individual for further study. In the course of proposing alternative actions and solutions, the partners were charged with formulating timetables and assigning partner accountability for the work to be performed. There were a few tense moments when several partners had to be reminded of the rules of conduct. They were quickly rerouted, and the proceedings moved along with due regard for the scheduled agenda.
During the concluding remarks, the emphasis was on follow-up. While the reviews following the retreat were good, it was the post-retreat activities that would tell the real story. The retreat planning committee had one final task and it was a big one. This involved assuming the role of overseer and making certain that a transcript of the retreat proceedings was prepared for review by the committee; arranging for publication and distribution of the notes to the partners; establishing a procedure to follow-up on the committees/individuals designated with specific assignments, as reported in the notes; determining the timetable for reporting on the status of action plans; recommending action plans; implementing programs; appraising the results; and beginning to consider plans for next year's retreat before a crisis forced the issue.
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