A Four-Step Formula For Strategic Planning

by Joel A. Rose

Significant changes have occurred within the legal profession that have required law firms to do long-range planning. The market for legal services has become, and will continue to be, more competitive. Mergers and acquisitions have reduced the number of "blue chip" clients available to be served by law firms. Overly aggressive and poorly managed corporate clients have experienced financial distress, others have joined with larger and better managed organizations and many have gone out of business.

The more progressive law firms have initiated aggressive marketing programs in an effort to retain and expand work performed for existing clients and to attract potential clients.

To compound the frustration and anxieties that prevail among partners in many law firms, cost conscious clients are less loyal to established law firms and have initiated "transactional relationships" with several firms, even in the same city. Today, it is commonplace for clients to negotiate fees, seek volume discounts and for certain types of matters, to propose contingency/risk forms of billings. Many firms are under growing financial pressures due to the resistance of clients to fee increases and greater financial expectations and needs of partners.

This article presents guidelines for lawyer managers who need to plan, but who are unfamiliar with planning concepts for a law firm.

Strategic planning is the process whereby a firm, assisted by the administrator, formulates its immediate and long-term goals and methods for achieving these objectives.

When properly developed and implemented, the strategic planning process will enable lawyer management and the partners to reach consensus on shared goals, identify qualitative and quantitative benchmarks and develop an action plan that includes timetables and lawyer accountability for performance.

The strategic plan will serve as a guide for allocation of the firm's resources. It will allow the firm to plan its lawyer activity more productively, i.e., the time spent on fee producing work, practice development and image enhancement, management of administrative and substantive activities, recruiting, etc. The strategic plan will also enable attorneys to appraise the results of their efforts. The strategic planning process is usually undertaken in the following four phases: (1) Self Assessment, (2) Analysis of Data Base, (3) Draft Objectives for Presentation to Partners, and (4) Implementation of the Plan.

Phase 1: Self Assessment

This phase involves the managing partner, management committee or strategic planning committee to survey all or a representative number of lawyers through personal interviews, questionnaires or a combination of both to obtain their perceptions about internal and external trends that will have an effect on the firm. Examples of issues that are usually addressed during the self assessment follow:

1. The philosophy, objectives and plans currently guiding the firm

2. The firm's culture

3. The form and effectiveness of firm governance, organization and administration

4. How effectively the firm's growth has been managed

5. Partner/associate relationships, i.e., the ratio of associates to partners, classes of partners and associates, criteria for admission to partnership, communications among and between partners and associates, retirement planning, etc.

6. Firm economics, i.e., partner satisfaction with gross revenue and net profit, individual net income, hourly and billing expectation from partners and associates, etc.

7. Areas of practice management, i.e., does the firm deliver legal services in a quality, timely and profitable manner?

8. Firm resources and capabilities, i.e., strengths and weaknesses, as related to resources, reputation, services and legal market position.

9. Client perceptions and partner willingness and ability to sell legal services, etc.

10. An assessment of the legal market environment, including size, synergism, trends, competition, client behavior, etc.

11. A forecast of the political, social and economic forces of change that will effect the firm and its clients.

Phase 2: Analysis of Data Base

This phase of the process involves analyzing the data base to highlight those key internal and external factors affecting the firm. Planners should be especially interested in obtaining partners' perceptions about the following:

1. Firm Strengths

2. Firm Weaknesses

3. Competitive Advantages

4. Competitive Disadvantages

5. Number of full time lawyers - both partners and associates and their ages

6. Administrative personnel

7. Main sources of clients and income from principal clients over the past three to five years and important changes that would effect client volume favorably or unfavorably

8. Inventory of unbilled time, accounts receivable, costs advanced

9. Billable and non-billable hours

10. Health problems or personal idiosyncrasies of partners

11. Anticipated tangs in the partner compliment, i.e., retirement, withdrawal, etc.

Many law firms have retained law office consultants to assist in the strategic planning process. Experienced law office consultants can expedite the strategic planning process. Being familiar with lawyer dynamics and the economics of law firms, law office consultants can analyze and interpret financial and management information and partners' responses. They can recommend alternative approaches for achieving firm objectives. Further, partners are usually willing to discuss their perceptions about the firm and respond to consultant's questions more readily than to similar questions asked by other partners.

Phase 3: Draft Objectives for Presentation to Partners

This phase includes drafting objectives for presentation to the partners in each of the areas studied. The following is an abbreviated presentation of marketing plan objectives and strategies prepared for one of the author's mid-size law firm clients.

Illustrative Marketing Plan Objectives:

1. To serve well, efficiently, economically, and fully the firm's existing clients (This objective, properly carried out, is probably the most important).

2. Growth - Does the firm wish to grow? An objective of most marketing plans is to increase the number of quality clients served by the firm in targeted industries and practice areas.

3. To identify and market whatever strengths or unique services the particular law firm may have to offer including, for example:

(a) The firm's ability to handle complex and multi-dimensional problems
(b) The firm's expertise in one or more substantive areas of the law
(c) For a firm with branch offices, the ability to better serve clients through one or more offices

4. To increase the firm's exposure in the marketplace.

Illustrative Marketing Strategies:

1. To implement a marketing plan

2. To analyze the market or markets where the firm practices

3. To identify substantive areas of practice where the firm is weak or understaffed an act to correct the situation

4. To determine which of the firm's strengths should be brought to the attention of existing and prospective clients in the markets where the firm practices

5. To identify a specific number of prospective new clients and assigning responsibility to specific lawyers to deal with the prospects, directly or indirectly

6. To meet with each major existing client and determine:

(a) Whether the client is satisfied with the firm's representation
(b) How the firm might improve from the client's perspective
(c) What other services might be performed (In this regard, some firms have developed client evaluation questionnaires).

7. To analyze the mailing list for firm announcements and determine whether it should be expanded or modified

8. To identify a specified number of potential referral sources and inform them about the firm

9. To identify seminars (including CLE, trade association, and client seminars) in which the firm's attorneys should participate and/or which the firm should sponsor

10. To develop and make effective use of a firm resume. In this regard, the firm may employ a general firm resume, together with resumes for its individual lawyers, its specialty groups, and its branch offices, the use of which is tailored to the perceived interest or needs of a particular client or prospective client

11. To identify and encourage participation in appropriate service, political, social, alumni/ae and similar organizations, where individual lawyer participation would be beneficial

12. To organize internal programs to keep the lawyers in the firm informed about marketing activities

13. To publish informational memoranda and pamphlets on new areas of law

14. Longer term strategies for accomplishments over three, four or five years

15. Periodic reviews of the effectiveness of the marketing plan should be scheduled and the plan should be revised in light of experience

Phase 4: Implementation of the Plan

The pay off for strategic planning is in the implementation of the plan. This is frequently the most difficult part of the strategic planning process. It is recommended that the plan be implemented through the firm's existing organizational structure, i.e., the managing partner, the strategic planning committee, heads of substantive practice areas and branch offices as required. Individual partners should be assigned responsibility and held accountable for the satisfactory implementation of each phase of the plan in accordance with an agreed upon timetable. Partners responsible for the implementation phase should report to the managing partner, strategic planning committee or other group designated to oversee the planning process. Problems and/or progress should be reviewed and assessments made to determine the most appropriate strategies to be followed. Status reports should be provided to the other partners on progress and/or problems in each phase of the plan in order to keep them apprised about the planning activities.

The implementation must be monitored to assess how effectively the plan is being implemented and corrective action must be taken as required.


Strategic planning is a dynamic process. If conceived properly and implemented effectively, the strategic planning process will provide information required for determining immediate and longer term goals and objectives.

©1999-2017 Joel A. Rose & Associates