The Problem Scenario
With the changes being wrought across the legal profession, many firms thinking strategically have been asking themselves, “Should we seek a merger, an acquisition be acquired or remain independent?”
Whatever your answers to these questions, to be in the best position, your firm must be the best version of itself. Is it? One mid-size Law Firm considered its response to this question and began a strategic self-examination. Everything they believed about their firm had to be challenged as the cold hard eyes of due diligence would seek out and expose their flaws. The firm asked Thomas Telman to assist with its strategic review.
The partnership began by considering its fundamental values, what it held dear, what they believed and how these manifested in behaviour across the firm. It is often the case that partnerships side-step this critical step, mainly because it is difficult and controversial but also because they prefer to get on with the ‘tangible’ stuff. That is a mistake. If a set of values is not consciously agreed, inevitably something else fills the gap, such as ego, greed and arguments over position and power. These are often immensely destructive. Values and beliefs about things like people, acceptable behaviours, essential elements of the firm’s employer value proposition (EVP), community, and the nature of work are the immovable factors from which a vision must emerge. Values and beliefs are the “why,” at the core of what drives everything and inspires employees to do their best work.
Once these elements had been agreed, the firm began identifying its 5-year vision for the future, what it wanted to be and for what it wanted to be known.
With these established the more technical analyses could begin, the firm’s internal strengths, weaknesses, opportunities, and threats (SWOT). The firm also used the STEEPLED model, (Social, Technical, Economic, Environmental, Political, Legal, Ethical and Demographic) to analyse its external environment. The results of these analyses were discussed and specific, measurable, achievable, relevant and timebound (SMART) objectives were agreed along with both quantitative and qualitative metrics. The objectives were then grouped into 4 key areas of business strategic performance:
· Financial - cash collection and profitability
· People – employer value proposition (EVP), recruitment, induction, and development
· Operational - how we work, technology, efficiency, effectiveness
· Business Development – getting more and better clients
What emerged was a partnership wide realisation that it had established why it existed, its objectives and performance standards to enable the firm to be ‘the best version of itself.’ What was more, that its people, their recruitment, retention, development were an absolute priority.
Within the firm’s strategic performance area of ‘People,’ the development of a persuasive Employer Value Proposition (EVP) was seen as a key objective to both retain and attract the best people to the firm. The EVP is what the firm offers in terms of incentives to its current and prospective employees in exchange for their talent, it becomes the narrative of the employer brand answering the question “Why should I work at this firm”?
The leadership team began to examine what incentives it currently offered its current and required employees and what needed to change, add, or drop. This encompassed remuneration, benefits, career growth, learning and development opportunities, advancement, work-life balance and how it could positively leverage the values it had agreed during the strategy development process.
Once approved the results were communicated firmwide for feedback, while there was inevitably scepticism, the resulting amended EVP narrative became the firm’s agreed employer brand, its reputation. The task now was to authentically live, develop and measure with key performance indicators (KPIs) the brand both internally and externally with the aim of:
1) improving employee engagement (KPI: staff surveys, appraisal feedback
2) social media and website engagement to showcase the firm’s culture and values (KPI: clicks, shares, likes)
3) the firm’s overall online rating on Glassdoor (KPI: ratings, positives, negatives addressed)
4) developing a ‘talent pool’ of potential employees (KPI: targeted employee interviews, conversion rate, cost (£) per hire)
It is evident that this was to be an ongoing process of adjustment with leadership team responsibility for taking it forward with employee ‘champions’ in support.
The overall results were encouraging with measured improvements both internally and externally within a year. As with much in life, having commenced the strategic review the implementation was about commitment and consistency to drive the firm forward.
What then of the firm’s initial question, ‘to merge or not to merge’? In an era where the number of truly viable target firms may be diminishing, the firm had realised several significant opportunities.
· It had set a strategic agenda that would make themselves a viable opportunity for a merger / acquisition.
· It had put itself into a better negotiating position if realistic opportunities arose.
· In making the development of an EVP a people strategy priority, the firm had also developed an exciting vision for the future which was succeeding in retaining talent with the additional bonus of assisting with succession planning.
The firm was also fast becoming a target for those seeking to be a part of a business that was ‘going places,’ making remaining an independent firm a more than viable option.