The Maraia Minutes
Growing Stronger When Adversity Comes
Volume 12, Issue 2
1. Avoid freezing up. Inaction and indecision are devastating to relationship building both internally and externally. Inaction also, by definition, makes execution a pipe dream. What most firms need to do is experiment more, not less. By that, I mean try something new, evaluate how it worked, make adjustments, and try again. The best leaders know they won't get every decision right. When you feel you're about 75% along in developing a plan of action, execute it, and fix the other 25% along the way.
2. Provide honest, direct, and regular communication with your people. When things get bad, leaders take the exact wrong approach. They communicate less rather than more. As a firm leader, be sure to communicate all the news about your firm to your people. Don't be afraid to deliver bad news - it will come out sooner or later anyway. They may not like the news you must deliver, but if you don't communicate fully with them, it creates gaps. Those gaps will create a vacuum, and nature abhors a vacuum. If you don't keep your people fully informed they will "make up" the news. You will then need to spend lots of organizational energy fighting rumors and half-truths. And, share good news as soon as it happens.
3. Get out of your office. I've noticed an inordinate number of professionals who are hibernating in their office even though their workload has decreased. That is the WORST thing they can do! Instead, get out and meet more people because you have the time. As I pointed out in last month's issue, give away as much valuable business advice as you can. If you don't feel like you have anything to offer, spend the next 6 months acquiring business insight and acumen. Go visit clients and find out how they make money and what issues they are grappling with. Remember the goal is to help them in any way you can; not beg for work. Go on a learning binge. Activities you've never had time for you now have time for, so use it wisely.
4. Increase "relationship literacy." Invest in teaching your professionals relationship skills. Don't cut back on training and coaching your people on effective networking and business development skills. If you cut back, it will accelerate your decline. Make investments that you feel will deliver the best returns. Now is the perfect time to increase the relationship literacy among your lawyers. I would argue that the legal profession has been UNDER investing in the development of its people for at least a decade. The current market will only make many firms more skittish and that will accelerate their eventual demise.
5. Rip up your 2009 strategic plan. Don't worry about your strategic plan for 2009, it's probably outdated and based on flawed assumptions. Instead, be willing to shift your priorities on a dime. Spend an inordinate amount of your business development time getting feedback from clients and prospects and learn how they are coping with the new business realities. As a general rule, lawyers do a hideous job of asking questions they don't know the answer to. If your lawyers have been diligent about gathering feedback from clients, your firm's strategy will be obvious. In fact, it will probably shout at you. If you must have a plan, focus on IMPLEMENTING the plan during the next three months. As I stressed in my first book, Rainmaking Made Simple: "Go light on planning and heavy on execution." This assumes you can move at high speed. Many firms can't or won't move this fast. The model I am suggesting involves conducting lots of "experiments" and evaluating each one closely for the lessons it contains. Even if a particular experiment doesn't work, you can still learn enough from the "failure" to design the NEXT experiment. And, at least you'll know what not to do.
6. Rethink your marketing budget. Stop putting resources into your collateral and print materials. Many firms that were previously marketing-focused have suddenly become focused on business development. Most firms spent the last 5-10 years pouring money into marketing when they should have been putting more into business development. Business development involves making investments in your core resources. For example, if you currently have a marketing budget of $10 million make sure that a huge percentage of the money you spend in 2009 relates to training and developing your people. I'm seeing more firms rely more extensively on their Director of Professional Development than ever before. That's a good thing!
7. Uncouple your self worth from your billable output. I think one of my clients spoke in an eloquently understated way for many when he said, "I'm feeling slightly anxious and depressed." That is because way too much of his identity is wrapped up in his billable hour output and/or his business generation ability. That is a BIG problem. If your self worth and identity are wrapped up in how much work you generate or how many hours you bill, then plan on being anxious and depressed for the next 12-24 months. Why not identify another metric by which to measure your self? Imagine the partner who says he will measure himself by how well he helps three of his partners grow their book of business or execute on their business plan, and then does it.
8. Make investments in your core resources: Your people. Don't cut corners on the most valuable part of your firm: Its people. It is extremely tempting to cut your training and development budget or hold off on doing training and development to see how things unfold. That is the WORST thing you can do! The best companies NEVER cut investments in their people. One of my clients is an OSHA lawyer who is busier than ever. When I asked him why he said companies have cut their safety staff which in turn has led to MORE workplace accidents! That is good for my client, but it's costing these companies buckets full of money. Some brainless bean counter or manager probably thought he was SAVING money. Guess again.
An example of well-devised training is: Does everyone in your firm show sensitivity and understand how the services they provide to clients impact the client's P & L? If not, provide training that helps your service delivery team understand the clients' financial, strategic and relationship priorities.
The next two suggestions presuppose that you can read and understand a balance sheet.
9. Examine your firm's balance sheet closely. Let me be blunt: If you have loads of debt, you are in trouble. If you historically have used lines of credit to pay partner draws, scrap that practice immediately and pay your partners less in draws. If some of your partners have a lifestyle that doesn't easily allow them to reduce their draw, have THEM go borrow money. Don't let their fiscal lunacy imperil your firm. It's the fiscally responsible thing to do. It's financial suicide to do anything else.
10. Ask your existing clients about their balance sheet. If they have loads of debt and are heavily leveraged, they are going to get weak pretty fast. If they don't have much leverage or debt, see if they are planning on expanding. Yes, you heard me right. In this kind of economy the strong will get stronger and the weak won't survive.
As a corollary, scrutinize prospective clients' balance sheets. The clients who will prosper in this market and who, if managed smartly, will expand, are the companies who have little debt. Related to debt is assessing your target clients based on their positive cash flow. It's not wise to put lots of energy into pursuing companies that are so weak they have little chance of survival unless you feed off insolvent clients.
The next 12- 24 months will test your mettle like never before. You're about to find out if you can sail the ship as adroitly when heading into a stiff wind as you could while running with a tail wind. If so, you will do just fine. Tough times like these reveal your organization's character. No matter how difficult things get, you must believe you will not just survive, you will actually grow stronger.
Copyright 2009 Mark M. Maraia Associates