Our firm, a 12 attorney firm in Detroit, needs to find a way to improve fee revenues and financial performance in 2012. We do not have a business or strategic plan, have never had a retreat, and we don't even have a budget. We believe that we must do something for 2012 and yet we are out of time since 2012 begins next week. Any suggestions?
Generating adequate fee revenue is the primary challenge for most law firms and this is where I would start for 2012.
I am a strong believer in the power of focused goals and objectives when integrated with a system of accountability. I have clients that have improved fee revenue by 20% (over a two-three year period) with existing headcount simply by establishing production goals for each attorney and paralegal in the firm - reporting, measuring and reporting goal v.s. performance monthly using simple reports, and follow-up with individuals behind on their goal attainment. Solo practitioners can use the same system and use a staff member, spouse, or coach to serve as an accountability partner. You might want to consider the following:
- Ask each attorney and paralegal to provide SMART (specific, measurable, attainable, realistic, and on a timeline - i.e 2012) goals for fee generation, fee origination, billable hours, etc.
- Review and discuss these goals with each member and engineer an agreement (commitment). Insure that there is adequate stretch - but that the goals are attainable.
- Setup a monthly report, spreadsheet if necessary, listing each individual and including their monthly goal number(s), actual performance, variance, year to date goal number(s), actual performance and variance.
- Review and discuss monthly at firm meeting, management committee meeting, or whatever forum is appropriate for your firm.
- Follow-up and meet with individuals that are falling behind. Devise strategies for improving performance or revise goals if unrealistic.
- If the firm has insufficient client work use this as a tool to bring out into the open and create specific business development initiatives to deal with such issues.
- Find ways to tie attainment of goals to compensation.
Try to get this in place by January 1, 2012 and see how this works for you and consider this your first baby step. Down the road you might want to consider a firm budget and eventually a strategic plan. See Helen Gunnarsson's article on strategic planning in the November issue of the Illinois Bar Journal.
John W. Olmstead, MBA, Ph.D, CMC