Christopher Young, who leads Pinnacle’s risk and BD practice, detects a switch of “P” priorities—moving on from “pandemic” to focus on “productivity”—and looks at the thinking and strategy firms are adopting for 2021.
As 2021 gets properly going, there seems to be a real focus on productivity and project management—and new persistent demands for more data and for it to be more granular and real time. Whereas 2020 was all about maintaining your firm’s ability to perform in the face of unprecedented disruption, now it’s practice performance itself under the microscope.
Firms are wanting to know: How long does it take to open a matter? Why does it take so long to complete billing? How is this matter best resourced? For the COVID response, things were rushed into place, and the platform for change was established. Now there is a more considered approach. What is the elapsed time for each step? Does it differ by user, practice, geography, or client? The tools are increasingly there to answer these questions. The challenges in answering the questions are the quality of the data and the skillsets. Having the tools and using the data allows firms to see where there are training needs, process improvements, or cultural change requirements.
Firms need to be better informed so they can set themselves up more robustly to cope with a year, that while brighter in outlook, is still uncertain in outcome. Generally, 2020 held up well for law firms, particularly those that were not too specialist and avoided being caught up in work types disproportionately affected by the lockdown; such resilience surprised many. Key to increasing productivity is being correctly resourced—not over-staffed, not too stretched. We are seeing firms looking to reduce their fixed cost base; the number of managed service or “outsourced capability” conversations taking place is indicative of that trend. Firms are looking to try and secure specialist resources that can do things faster and better while also reducing the management overhead.
To capitalize on the specialist resources that firms have, they need to understand their expected demand. That in turn means getting closer to clients, and it’s interesting to note that tracking of referrals more diligently has been coming up more and more in partner conversations and personal KPIs.
There’s a concerted push to get better visibility of and confidence in pipelines of work. With remote working, firms are doing what has been advocated for years—focusing on their existing clients’ needs and working the existing referral relationships, rather than pursuing new clients. Increased confidence in the pipelines and forecasts allows firms to better manage work, ensuring that individuals are not forgotten and everyone is fully utilized; to price work based on expected demand—thereby increasing profitability and over the long term, allowing firms to invest in growth areas.
Our sense is that in 2020 firms were forced to put things in place—whether it was technology; working practices; new metrics, or measures. They were put in place quickly and, to a greater or lesser degree, adopted. Firms have demonstrated that the world doesn’t fall apart if things are not perfect on day one. We sense that in 2021 there is going to be a focus on driving productivity and getting the value. The data will be the light that guides and directs firms, whether it’s increasing utilization through better revenue forecasting, accelerating billing processes, or reducing the cost of IT delivery.
The focusing of the business intelligence lens will, however, throw a harsh spotlight not so much on BI process but on the underlying data sets. Information and the insight arising from it can only ever be as good as the data sets that are interrogated. Firms might be hot on productivity for the months ahead and they may want to ratchet up performance through adroit analysis. But if the data integrity and quality are lacking, then that house must be put in order first before you build for a more profitable future.