With the future in mind, what should law firms (or sole practitioners) be doing now?

LawTalk posed this question to Simon McCrum, a commercial litigator by background who has given up client work to focus on law firm management, marketing and business development.

He is managing partner at United Kingdom firm Darbys, a position he took up in 2007, only to discover something that even the firm did not realise. It was not performing very well at all. It was “very close to the edge” and needed a major turn-around.

That is what Mr McCrum has achieved. Darbys moved from a trading loss in 2007 to record years and 35% growth year on year in 2012 and 2013 during a time when the rest of the SME legal market in Britain was struggling. (Some surveys showed segment growth was just 4%).

In the time Mr McCrum has been at the firm’s helm, turnover has almost doubled, from £7 million in 2007 to approaching £14 million this year.

Today, Darbys is a fast-growing business, with offices in Oxford, Manchester and Colchester.

So what are Mr McCrum’s five top priorities for firm and sole practitioners?

1. Time is limited, so management should only sweat the “big stuff”. There will always be enough “small stuff” to fill management’s day. Park it.
2. Also because time is limited, one person can’t do it all – you need good middle management to do bite-sized bits of the management job for you. What makes good middle management/team leaders is quite different to what makes someone a good lawyer or a big biller. Many firms have heads of department in place who probably don’t want to be there and who have different skill sets to those that management needs. Lawyers benefit – and the business benefits – from data analysis and active lawyer management.
3. There are two things that can kill a law firm stone dead. The first is running out of cash. This is where good middle management comes in. Good team leaders must watch chargeable hours across their team, and also disbursements and unpaid bills. Give people an inch and they take a mile, so active management and chasing of lawyers and clients is essential and continual.
4. The second thing that kills a law firm is a bad claims record – mistakes on files. Everyone can make one mistake, though even that can be managed with good supervision and checking processes. A lot of firms put up, though, with people who make lots of mistakes and they don’t grasp the nettle to deal with it. Even worse, firms may not really know what is going on in all their lawyers’ files. That is a recipe for disaster. There has to be constant supervision and systems in place, which lawyers cannot hide from. Our clients for example get asked by us by text every two weeks how we are doing – simply A or B or C. That way we catch issues as soon as they arise and we deal with them. It also means feedback comes to management, not to the lawyers.
5. Going open plan in the office is the only way to achieve all of these things – and much more.

Mr McCrum is one of the keynote speakers at the upcoming Future Forum, which will be held in Queenstown on 23 and 24 October (see www.futurefirmforum.com). The early bird rate for this event closes on 31 July.

Mr McCrum will speak on the topic What could possibly go wrong in a successful law firm?

He will illustrate that things can and do go wrong in running a law firm and will candidly share two new chapters in the ever-evolving Darbys story, one related to lock-up and cash, the other related to risk management.

Also, he will demonstrate how long it really takes to turn around a law firm, and outline the monsters that linger in cupboards only to jump out long after merger celebrations have died down.