April 4, 2006
Consensus produces better decisions for law firm planning
I recently read (and can’t remember where) survey results that indicated that a consensus opinion among the populists beats those of the experts. Adam Smith, Esq. picks up on that theme with his post What if Your Executive Committee’s Not So Smart? Bruce MacEwen, the host of Adam Smith, pointed to James Surowiecki’s 2004 publication of The Wisdom of Crowds—more evidence that the consensus forecast of a number of lay people is almost invariably superior to the individual forecast of experts and gurus in the field.
What does this mean for the managing partner? Neither Bruce nor I would suggest man-on-the-street polling as a tool for law firm planning. But MacEwen suggests:
“Try, for example, asking all your attorneys—even include, for the wildest and craziest among you, your clients—things like:
· Which practice areas should we invest more in, and which less?
· Do we have an office in a city with poor prospects, or lack an office in a city with outstanding prospects?
· Which competitor do we need to worry about the most vis-a-vis (say) our M&A practice?
· Who's going to win the contested election for managing partner? (Ooops—did I say that?)
The point is simply this: The assembled expertise of your executive committee or practice group heads may not be—indeed, if you buy the notion of ‘collective intelligence,’ almost surely will not be—your most valuable resource for insight about the future.”
Many of the legal pundits dismiss consensus planning as a poor substitute of leadership. I, for one, am a champion of the consensus building process. Aside from the fact that diverse members of a planning team can cause a new idea light bulb to go off, leaders need an organization of believers if goals are to be achieved. Consensus planning is “consensus building." It is part of the process of leadership—of aligning a team with shared core beliefs behind clearly defined and communicated objectives.
Many law firms approach planning with a careless disregard for the importance of assumptions—predictions about the future. A law firm’s plan can be no better than the planning assumptions upon which it is based. Consensus building is particularly valuable here. You want to include people closest to the law firm’s work, the newest to the firm, those with the most contact with peers outside of the firm, those competing for new clients, those most knowledgeable of the environment encompassing a practice class, those most interested in technology, those most concerned for client services, those who deal with the frustrations of administration. They need not all be part of the same planning team. There is no rule that says a firm must have only one planning team. It is in the leader’s interest to have organization-wide participation. We own what we build ourselves, and by involving a cross section of the firm (if not all of the firm) in the process, you develop team-wide ownership of the plan.
Developing assumptions is a serious business that involves assessing the current environment in which the law firm must operate and then identifying how that environment will be different in the next three to five years. The consensus process' best role involves the following segments of a law firm’s structured planning processfont>
Identifying the current environment in which the firm operates considering the following aspects:
· Economics
· Labor force
· Technology
· Competition
· Courts
· Governmental impacts
· Professional and ethical rules of conduct
· Nature of market and trends
· Pricing constraints
· Buying methods of prospects
Identifying the firm’s strengths, weaknesses, opportunities and threats:
· Our strengths
· Our weaknesses
· Our threats
· Our best opportunities
o New products to existing clients
o Same products to new markets
o New products to new markets
o Performance (improve performance compared to benchmarks)
o New delivery methods
o Etc.
Agreeing on the current planning assumptions regarding the future:
· Economics
· Labor force
· Technology
· Competition
· Courts
· Governmental impacts
· Professional and ethical rules of conduct
· Nature of market and trends
· Pricing constraints
· Buying methods of prospects
What is an effective structure process of consensus building? Suppose I have a planning group of 12 key team members and we are tackling the questions about the future issues involving professional talent—i.e., labor force issues. What assumptions can the firm make about the availability of talent, the competition for it, what candidates will be looking for, what skills candidates will lack when they walk in the door and any other aspect of the talent market that the firm must consider for the future? I would ask each planning member to list the most important aspects of talent that the firm should consider when planning for the next three years. Then I would ask them to rank the items on their list from one to five—one being the best and/or most important. I would then start around the room asking the first person for their No. 1 item. I would list it on a flipchart. I would then go to the next person and ask for his/her No. 1 item. If it had already been listed, I would ask for his/her No. 2 item, etc. Each participant can give me only one item at a time. I would continue around the room until every member’s top five items were listed. As a result of this process, we might have 12 to 15 items listed. Interestingly enough, almost every member will have at least two to three items in common with the rest of the group. At that point, I would ask the group to individually rank the items on the new combined list of items. I would ask them to draw a line below their top third or fourth item. I would go around the room again asking each to identify their top items. We would tally up those items mentioned most often to create a “main things” list of three to five items.
Anyone who disagreed with the items in our new “main things” list would be given an opportunity to present their case. Usually there is very little disagreement at this point. Once the best ideas are identified, we would move on to develop the strategies, tactics, resources, programs, responsibilities and schedule for achieving the main things.
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Filed under Planning by Tom Collins