HedsUP! From Hedley Consulting

Welcome to the Spring
issue of HedsUP!

Changed Expectations

“It may be hard for an egg to turn into a bird: it would be a jolly sight harder for it to learn to fly while remaining an egg. We are like eggs at present. And you cannot go on indefinitely being just an ordinary, decent egg. We must be hatched or go bad.”
C. S. Lewis

Spring 2013

The legal sector is full of decent eggs; firms which are technically competent, deliver good service, price their work the way they always have and are structured along historic lines. They are operating a cottage industry model and are woefully ill-equipped to deal with the fundamental and far reaching change which is sweeping the market.

There are two dimensions to the challenges which firms must address. The first is external, dealing with a new set of client expectations and fast-emerging competitive forces. The second faces internally and is concerned with operational efficiency, new ways of working, structure and governance.

This is analogous to the customer-competitor-company dynamic described by Kenichi Ohmae in his ground-breaking book, The Mind of the Strategist. It forms a useful frame for law firm leaders to better understand the forces at play. Looking at the client-competitor aspect, for example, a phrase that I coined many years ago is that “you don’t need to be

perfect, just distinctly better than the competition at the things which are most important to the client”. Hidden in this simple collection of words are some real challenges – how many firms truly understand which aspects of their service really drive client loyalty and, crucially, how they measure up to their competitors in these areas?

The change from decent egg to soaring bird is incremental. The hatching of the egg is but the first, crucial step. In itself it will not guarantee success but without it, failure is certain.

I hope that you enjoy this issue of HedsUP! If you have any questions or would like further information please do not hesitate to contact me.

Best wishes,

Andrew Hedley

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On your desktop

Organic Growth Strategies: Back to Basics

The challenging market conditions of the last four years mean that organic growth is a significant issue for many organisations. The professional service sector has suffered from the pincer squeeze of economic recession together with the deregulation of the legal services industry (as a consequence of the Legal Services Act 2007). Increased competitive pressures created by new (non-law firm) entrants and the rise of substitute products have combined with sluggish market conditions to create the perfect storm. One consequence has been an increase in law firm failures and a sharp upturn in merger activity as forces for market consolidation come fully to bear. This consolidation activity means that some firms are achieving scale very quickly through inorganic means. However, the need for strategies to deliver genuine organic growth remains high across the market.

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Unlocking the Client Dividend in a Merger

Any merger should seek to build a sustainable competitive advantage. What this means in practice is that vision is needed to create a client proposition which is more compelling than either firm could offer before and, crucially, better than other firms competing for the same work.

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Plan Ahead To Get Ahead

The means by which a strategy may be developed – the range of models or approaches adopted and the process by which strategy-making can be effected within the culture of a professional partnership – is a huge subject area and one which has been covered extensively. Less focus, however, has been given to the role of planning in the delivery of the strategic vision. Yet, it is self-evident that, without a clear and robust approach to implementation, even well-crafted strategic plans will founder. A continuous longer-term planning cycle is required and this article considers how such an approach may be developed.

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Getting Profit-Sharing Arrangements Right in a Merger

A merger makes sense if the new firm is better able to compete than either of its antecedents. For some firms, ‘compete’ means that the merged entity simply has a better prognosis for long-term survival, while for others it will be characterised by more opportunities, an improved market position and a reshaped business model.

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News Bytes

Legal Practice Management 2013 Conference

On 21st May, Andrew Hedley will be speaking about positioning, brand & growing market share at the Legal Practice Management 2013 Conference in central London. To read more about the conference click here or to download the brochure click here.

Hed2Head, Hedley Consulting’s blog, is live!

Hed2Head, the blog of Hedley Consulting, is now live and be accessed either via www.hedleyconsulting.com or directly at www.hed2head.com. Complementing our longer articles, master classes and knowledge pieces, Hed2Head provides regular snapshots and opinion on the latest market developments and emerging trends.

Law Management Section Merger Toolkit

The Law Management Section Mergers Toolkit, with two chapters contributed by Andrew Hedley, is designed to help firms gain a better understanding of the merger process and provides practical guidance throughout. Andrew Hedley's chapters consider the strategic drivers for merger and how to unlock the merger dividend. For more information or to order a copy click here.

The Cambridge Chartered Programme

Andrew Hedley has been appointed as a specialist tutor on Cambridge Marketing College's new Chartered Programme. This is a unique initiative aimed at helping delegates gain and maintain their Chartered Marketer status via a structured range of activities from networking events, through courses to self-study materials. For more information about the college click here or to download a copy of the Chartered Programme prospectus click here.

Client Strategy in a Changing Legal Market Report

Andrew Hedley’s Client Strategy in a Changing Legal Market report has now been published and is available to purchase online. Client strategy sits at the heart of all strategy. Without the ability to attract and retain clients, at a price which delivers an acceptable level of profitability, no business can be viable in the longer term. To read more or to order the publication click here.

Developing Strategic Client Relationships Report

Andrew Hedley’s comprehensive report, Developing Strategic Client Relationships, published by ARK Group, continues to attract purchasers from around the world. Running to over 150 pages, with case studies of leading firms and ground breaking initiatives in this area, the report brings a much needed strategic perspective to client development and relationship management. For more information about the report email enquiries@hedleyconsulting.com.

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