It is the neglect of timely repair that makes rebuilding necessary.
Planning the Successful Turnaround of a Troubled Law Firm
NOTE: This is the fifth and final part in this series on Turning Around the Troubled Law Firm, See Part 1, 2, 3 and 4 . This post is really the second half of part 4 and for it to make sense please read the first couple paragraphs of the Part 4 here for the introduction.
3. Seize control of cash flow. The further you move to the left on the Spectrum of Underperformance, the more urgent the need to get a handle on cash flow. To do this, have a frank discussion with your bankers about the pressing issues. Deliver one clear message: that you intend to manage your turnaround in a way that protects your bankers’ interests. Propose a schedule for constant communication designed to keep them apprised of each step in the turnaround process. A good relationship with bankers is a prerequisite to a successful outcome.
4. Develop a detailed turnaround strategy. It is impossible to generalize about the specifics of a turnaround strategy. Each situation is unique. This is where experienced professional assistance may prove invaluable. There are, however, cornerstones for a successful turnaround strategy.
a.Develop a means for eliminating the principal drivers of underperformance. This often means eliminating underperforming parts of the firm including space, people and perks.
b. Design a communication program. Communication will never be more important than when you are trying to work out a problem. Communicate early, often, honestly and with confidence and hope.
c. Identify the basis for renewal. Every firm has core strengths. Identify yours. Investing here is the path to institutional renewal, and the key to building new and meaningful momentum. This often combines identifying what you are going to invest in and what you are going to eliminate.
d. Map out an execution plan. Whatever your plan for a turnaround, it has action steps that must be assigned to responsible parties. The leader’s role is to determine what the plan is, assign responsibility and hold those individuals accountable.
e. Select a leader who can lead the turnaround. Perhaps the most unpopular question in a turnaround is that of leadership. The difficult truth is that law firms, generally, become troubled as a result of how they are led (or more often not led). Translation: if the current leadership has led the firm into the current predicament, the question begs, can they be effective in leading the turnaround?
It is rarely too late to turn around an underperforming organization, but remember, there is a direct correlation between how quickly you act and the probability of success. Great leaders identify weakness early and act quickly to eliminate it.
Do you know of law firms that have been successful in a turnaround effort?