mastering change 15


When most professional firms are assumed to be offering a similar service, you need to articulate what makes your firm different and how this benefits clients. Many firms sell themselves as a client’s trusted adviser, so why should you be more trusted than anyone else?


• Tip: You may spend more time working offline than online, but your next potential client may not. Engage online to engender trust.


5 Sourcing efficiencies


Professional practices must look for efficiencies even if this challenges the accepted, but traditional, norm. Is it more cost-effective and productive to outsource aspects such as HR, marketing, public relations, computer-aided design, accounting and IT? To compete, overheads need to be kept down without compromising quality. Some work previously done by trained lawyers and accountants is outsourced to teams in low-wage countries. For example, in litigation cases, boxes of evidence could be catalogued by non-qualified staff.


Other trends include home-sourcing, where professionals work from home; or crowdsourcing, where contributions are solicited from a group of relevant experts.


The downside to outsourcing is the risk of supply chain disruption. For example, the tsunami which hit Japan in March 2011 led to delays in several parts of the world, developing production, etc. There has since been a return to ’on-shoring’ of some production. In industries such as garment manufacturing, home-turf suppliers can respond quickly to market demands.


• Tip: Consider the cost benefit of outsourcing support services and/or legal processes.


6 Knowledge capital (KC) – a wasted resource


Look around you – there is a huge amount of KC in your firm, but it may be untapped. Perhaps one of your employees is fluent in a foreign language or has another particular skill. This knowledge can be crucial in winning work.


Those who recognise their firm’s KC are ahead of the game. They should have an accessible staff directory setting out specialisms within the firm, which they can cross-sell or upsell. Think laterally – potential new services for existing or new clients based on the skills of existing staff can mean easy wins.


• Tip: Blinkers are for skittish racehorses, not professional business people. Unlock your staff’s KC and get to know your people.


THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – OCTOBER 2014 7 Corporate remoteness can cost


A tick-box culture has damaged the personal touch. With all the rules, regulations, regulators, bureaucracy and online working, your client may feel removed from you. Empathise with your clients, their businesses and how you can help them. They may not be aware of your qualities, experience and knowledge. The importance of sharing knowledge, ’war’ stories and insight cannot be underestimated. Verbal interactions engender trust and respect and often lead to mutually profitable reciprocity.


• Tip: Client empathy is powerful – easy to overlook and difficult to always get right but worth the investment.


Profits are only distributable when the money is in the bank and it stays there. Work in progress yet to be billed, invoices raised but not paid, and many other contributors to book-keeping profit do not necessarily mean money is in the account to pay out as a bonus or dividend. Similarly, the unavoidable costs of professional indemnity, VAT and tax bills may be further compounded by a seasonal reduction in trading.


Think laterally – potential new services for existing or new clients based on the skills of existing staff can mean easy wins


Additionally, as your firm expands you will probably need to make some cash-hungry investments. However the anticipated additional cashflow may not arrive for months or even years. A new partner or team, for example, will require additional working capital. With bank funding difficult to get and usually expensive when it is obtained, tight monetary control and a complete understanding of cashflow is essential.


• Tip: Understanding cashflow forecasting can be crucial in maintaining a stable business and allowing you to sleep at night.


Richard Green 8 Pay-by-results (PBR)


To many professional practices, PBR is anathema. However, the commercial reality is that you may have to consider it. Agree key performance indicators on which to base fees and when they are met or surpassed, your client will be happy to pay extra. To encourage results, you could incentivise staff with a percentage of gains made.


• Tip: Your staff are more likely to achieve results if incentivised financially.


9 Cash is king


Are you doing well as the economy bounces back after six years of recession? Is the cash rolling in? If so, happy days. But perhaps the accounts which appear to show you have good profits don’t actually mean you have distributable funds.


www.businessmag.co.uk


Smith & Williamson’s South Coast team advises law firms and a wide range of professional practices based in the area. Its expertise includes advising on mergers, incorporation to LLP, succession planning and remuneration policies.


Details:


Richard Green 023-8082-7600 richard.green@smith.williamson.co.uk


Greg Palfrey 023-8082-7600 greg.palfrey@smith.williamson.co.uk


www.smith.williamson.co.uk


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