Firmwide Analytics and Succession Planning

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Succession planning: a term to send a shiver down the spine of even the toughest legal professional. After all, a failure to properly manage succession can lead to a loss of clients and in turn revenue. Thankfully, analytics can help. We break down five of the key categories you should be collecting and analysing data to reduce your succession planning burden.

Why succession planning is essential

As early as 2012, Altman Weil was reporting on the precarious position some firms were finding themselves in, regarding succession planning.

“Recently, a major rainmaker in a 100-plus lawyer firm, who had virtually sole responsibility for a client generating well over $2 million in revenue per year, announced his retirement, providing his colleagues with 30 days’ notice. When asked about this abrupt departure, he responded that he had acted in accordance with his firm’s ownership agreement” – Altman Weil

This scenario will not be new to those in the legal profession. Worse yet, it doesn’t even need to be someone retiring. Legal professionals can change firms, taking their clients with them at a moment’s notice. However, this doesn’t have to be the case. By collecting and analysing data on the five following categories, your firm can avoid the same fate:

  1. Client relationships
  2. Key players and their attributes
  3. Successors
  4. Client feedback
  5. Reward structures

Map your client relationships

First and foremost, if you do not know your clients and their relationship with your firm, then you cannot hope to plan succession accordingly. Pricing, budgeting and matter management tools to centralise your client matter data gives oversight and provides a simplified view of your clients. This includes information like:

  • Which lawyers have logged the most hours to your client?
  • Which departments work most closely with your client?
  • What matters does your client have running?

The data needed to create this oversight is largely held in timecards. Notably, timecards demonstrate who is working on which matter, and for how long. However, you can enhance this client map with other data streams. This can include litigation history or industry news. By knowing how satisfied your clients are, and where you are working with them, you have better oversight to manage succession.

Know who your key players are

Once you understand the relationship you have with your clients, you can begin to identify your key players. At Clocktimizer, we produce this data in the form of a social graph. This displays the strength of the relationship between specific timekeepers and a client, or matter, over time. The prominence and number of connections indicate the level of interaction with the client.

If you do not have a pricing, budgeting and matter management platform to help with this analysis, it is important to work out what data you will need to provide this insight. This will include information like:

  • Number of hours logged per timekeeper, by client
  • Activities logged per timekeeper, by client
  • Matters worked on per timekeeper, by client

This is not an exhaustive list. You may find that your firm has other data insights to determine who is a key player in each client relationship. What is important is ensuring you present this data in an easy to understand way. As such, it can be updated regularly and can inform of the success of ongoing succession planning efforts.

Who will be a successor?

Rather than identifying a good successor based purely on personal choice, it can be wise to add a further dimension of data analysis in succession planning. Your original key player will have become important to a client for a number of reasons. Collecting data on those, and then looking for others with similar attributes can aid this process.

Identify what type of work each key player normally performed for the client. Looking deeper into things like hours logged by activity, whether matters run to different fee structures, or how they manage a matter can identify a pattern which can be repeated. Filtering for these attributes in a tool can then identify similar timekeepers. This can be used to help inform succession choices.

Importantly, there will also be a certain amount of qualitative data to add to this analysis process. By communicating with the client and discovering what they value most about their counsel, you can build a fuller picture of the type of person who can continue the relationship.

Client communication should be built-in

Unsurprisingly, client communication is a key part of good succession planning. It can inform the attributes a client values in their counsel. Early communication with clients can also identify weaknesses in the relationship. In both cases, the centralisation of this data, and the building of a strategy to tackle it is essential.

The data collection strategy should look at automating and institutionalising the collection of data from clients. Create feedback portals, or forms, looking to evaluate the current relationship clients have with you. These can then be automatically shared, and the data collected centrally to be analysed. Once set up, this process should require very little active input, except where it is needed to improve the survey itself.

Secondly, the data should be analysed. Attempting, where possible, to make answers quantitative rather than qualitative will help analysis. Once you implement your succession planning strategies, you can then test their effectiveness through this data stream.

Incentivise succession planning

Finally, and unsurprisingly, a failure to incentivise succession planning is likely to leave all your data and analysis worthless. But again, the collection of data on incentive schemes can better inform their effectiveness.

Determine first which behaviors you wish to incentivise. This could be the introduction of clients to other practice groups or the training of junior partners with older clients. Once you have established an appropriate incentive, measure its impact. Do you see an uptake in inter-practice referrals? If not, why not? Completing this succession planning loop will ensure that not only do you know where and how to introduce changes, but that the firm will actually want to make those changes.

In our next post, we will be discussing firmwide analytics and legal project management in greater detail more specifically, what data to collect, and how to make the most of it.

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