June 28, 2006
Obstacles to Law Firm Planning
Howard Mudrick lists the following obstacles that can stop the planning process in its tracks.
Partners may be spending too much time and energy focusing on internal matters. This tends to happen when partners have not reached consensus on basic philosophic issues. If the partners can't get beyond this problem, the firm usually falls behind its competitors.
Some partners may not fully understand the economics of their practices. They may have a tendency to set economic goals without regard to whether the firm's client base/capacity for growth can support those goals. They may focus on cutting overhead rather than on increasing gross revenues.
They may not understand how their practice management habits impact the firm's financial success. Even if they do, they may not be willing to change those habits, including:
- Work selection.
- Pricing, billing and collections, including write-downs of time and write-offs of accounts receivable.
- Delegating to other partners and associates and properly supervising work that has been delegated.
- Specialization.
- Keeping time and turning it in.
- Using systems.
- Doing work on time.
- Communicating with clients regularly.
Some partners may not understand the necessity of having a strong, well-managed organization to implement strategic goals. They assume that, regardless of internal issues that are not resolved, there should be no reason that the firm would not be successful in implementing a plan.
Some partners may not understand the importance of decisions that must be made regarding the practice itself. Even if they do, they may be unwilling to make decisions that cut or curtail a given practice, especially if they are involved in it.
If any of the above situations are present in your law firm, the first step toward taking control away from fate as the future determinate for a law firm is to eliminate the obstacle.
The above insightful points were extracted from a paper by Howard L. Mudrick, president HM Solutions. Mudrick is president of HM Solutions, Inc., a Dallas based management consultancy to the legal profession. Howard Mudrick, a CPA and a former partner at Hildebrandt, has more than 20 years experience consulting with law firms plus on-ground experience in financial management positions with midsized law firms. For a copy of Howard Mudrick’s paper, Will Fate Plan Your Future or Will You?, email HLMudrick@aol.com.
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