Management And Strategic Planning - A Legal Framework
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1 PRACTICEMANAGEMENT INCLUDINGFICA Mr Johan van Staden 1 March 2013
2 Management A mechanical action or a Commitment?
3 Do you apply a reactive management process? or Pro-active anticipate any changes and needs? Danger: Crises Management Process Day to day solutions React to demands Not Defined Apply short term strategy Haphazard style No measures to monitor and control
4 A journey to the unknown? To consider fundamental attitudes in relation to: Strategy Human Resources Risk Environment Marketing of Services
5 STRATEGIC PLANNING Three fundamental questions Who are we? Where should we be going? How do we get there? Business plan basis -not static - to develop strategic plan - to reflect on fundamental questions
6 IS MANAGEMENT A PRIORITY? Manage day to day personal affairs; First to recognise importance; No longer vague process; Will take up a specific slot in day to day activity; Huge demand on attorneys practice Not billable hours BE HONEST: CONTROL OR COMPLIANCE?
7 Definition Of Management? Process or range of activities Which provides direction To a firm s resources In order to achieve goalsof the firm Within the firm s environment In the most productive way
8 Components or Range of activities -Firm governance: how the firm will be managed, the size, composition and terms of management committee -Administration: senior and support staff composition, decision making process i.e. duty register, day-to-day operations of the firm, personnel, technology and finances - Economics : analysis of profitability factors, billing rates, drawing policies - Practice management: obtaining instructions, quality control, mentoring -Growth : direction of firms and size, new partners/directors, mergers (what is the trend in commerce?), geographical expansion - Marketing: Branding, new clients, client service, etc.
9 STRATEGIC MANAGEMENT The principal resource of any law firm is it s complement of human talent. Managing that resource to provide quality and timely legal services, at a cost that is economical for the client and economically rewarding for the owner, is the primary function of practice management. Motivation By JD Cotterman goal to a reasonable living for everyone. rules to other undertakings equally applies to identify the product / service to sell to understand and identify markets to render service of excellence increased turnover (fees) positive cash flow proper use of technology training Marketing
10 What is the fundamental attitudes it will determine how a group organize attorney independent and themselves value personal achievement training reinforces individual competitiveness ability to master solutions by themselves Result : many organisations of lawyers function as a loose confederation of lawyers not functioning as organised disciplined teams considering the effect of association to strive for a team firm
11 PRINCIPLES OF MANAGEMENT Specialisation depends on size of firm; future for generalist? Growsdevelop specialized disciplines Delegation most competently and at lowest cost Supervision delegation requires supervision; difficult concept in attorneys office Training constant process; retention of staff Evaluations every worker needs feedback on performance Budgeting financial management Client issues client care / marketing
12 A GOOD LIVING Increased income is the result of: Increased fees, resulting from increased productivity and lowering running cost Largest expense in attorneys office - salaries iethe only production units are the people working there. Goal increase production per person use IT
13 Successful small business Survey University of Jhb scentre for Small Bus Development Good customer service 32% - Competitive prices 20% - Quality of offerings 16% - Good community relations & support 14% - Satisfied clients 10% - Commitment / dedication to the business 10%
14 Reasons for failure: -lack of budgeting skills 28% - unprofessional business plans 24% -lack of practical skills to run bus 22% - necessity-driven businesses go belly up quickly
15 WHY DO BUSINESS FAIL? 2 years to break even Healthy cashflow life boat Lack of management competence Poor bookkeeping & records Poor financial management Marketing Inflationary Personal/Health Other
16 WHY DO YOU NEED A STRATEGIC PLAN? A unique formula for success Forms the foundation of a business plan Primary focus is to identify factors that will distinguish the business from its competitor The strategy will ensure that bus. Builds, maintains and strengthens its position in the market place If not defined real test when temporary difficulties experienced THUS TO DETERMINE THE FUTURE OF BUS
17 Understand the type of industry to set the process needs to be sensitised to the environment within which you practice 1 Economic trends 2 Social trends 3 Political trends
18 Economic trends Macro & micro economic indicators Economic active population Growth prospects Nationally & community
19 Political/Legal New Legislation Micro LPB CPA Competition Act
20 Other NCA BEEA Mineral & Petroleum Resources Develop Act Companies Act
21 WHAT IS A STRATEGIC PLAN? A detailed plan for achieving success The process of specifying the objectives Will guide management on any decisions Create platform for performance monitoring The direction a bus. will take in relation to clients and competitors To provide foundation for business plan
22 OBJECTIVES An objective is a specific step, a milestone, which enables you to accomplish a goal. Setting objectives involves a continuous process of research and decision-making. Knowledge of yourself and your unit is a vital starting point in setting objectives.
23 STRATEGIG PLANNING Short term strategies: To do list Medium term strategies: 6 12 months Long term strategies: 12 months Requires a combination
24 STRATEGY FORMULATION SWOT ANALYSIS STRENGHTS WEAKNESSES OPPORTUNITIES - THREATS INTERNAL EXTERNAL BUILD ON STRENGHTS EXPLOIT OPPORTUNITIES RESOLVE WEAKNESSES AVOID THREATS
25 STRENGHTS TWO FACTORS CONTRIBUTE TO YOUR STRENGHTS: a. ABILITY Versatility ability to adapt --Growth -- Penetrate new markets b. RESOURCES To obtain -- Quality -- Allocation
26 WEAKNESSES Lack of managerial skills Insufficient qualifications Inadequate systems and procedures Technology limitations
27 CHOOSE YOUR GOAL Example: Increase revenue from 1 million to 1.5 million in one year Increase profits by 10 % by September 30 Identify two new opportunities to diversify your legal services Build a 6 month cash reserve for the business by December 2010 Lower outstanding fees with 15 %
28 SET UP A MEASURMENT SYSTEM What gets measured, gets done Measurement creates a feeling of achievement Achievement creates energy Energy creates spirit Take decisions on measured performance See failure and mistakes just as information
29 SMART GOALS S - Specific M- Measurable A - Attainable R - Realistic T - Time Limited
30 Human Resources Essential componementin a firm Most important resource in a firm Largest expenditure item in a firm
31 Consider How productive are your staff Can you account for each workstation Do you regard all work stations as cost centres Is there a defined work process for each workstation What incentives are offered to increase productivity Employment contracts, KPA s, grievance & disciplinary procedures
32 Choosing The Correct Solution Reflect on practice activities Conduct a need analysis What type of staff required What will be required from employee How will it be done When will it be done Who will the employee be
33 Recruiting Policy (Agency, Media, Circle of Friends & Family) Key Staff Member, egbookkeeper (wife) To Compliment the Image & Values of Firm Independent Suitably Qualified Fair Labour Practice Family/Friends Related Market Related Remuneration Training
34 THANK YOU
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