No sooner than closing out 2018 than do law firm leaders confront the next challenge-2019.  Even firms not facing upheaval caused by attorney departures or declining client relationships will encounter other transitional events.  The contest never ends.

Whether 2019 preparations are just getting started or already developed, some areas deserve a firm’s attention.  Focusing on these select areas can deliver short-term and long-term benefits and aid in making a law firm stronger.  As the New Year dawns, the five areas that should receive a firm’s focus are:

Client-Relationships. Without an adequate client base, it is hard to continue a firm’s status quo.  For that reason, it is important to annually (if not more often) take stock of the firm’s client portfolio.  Are important clients starting to drift away?  If so, what can be done to arrest the unwanted trend? Conversely, are some clients, even legacy ones, too much of a drain on firm resources in light of the financial reward?  If so, does it make sense to transition away?   A review of client relationships may indicate that a different client profile for the future should be pursued to better align with the firm’s strategy. The inquiry can take many directions, but without performing a top to bottom client review, the future can be at risk.

Financial Performance. Understanding your firm’s financial success and prospects for the future is more than asking whether everyone made enough money last year.  A good year in 2018 may mask red flags destined to wave furiously soon. The 2018 legal services market was the best in years–your firm’s success may not be as “earned” as it was “gifted.”  Even with recent success, focused firms perform an objective assessment of the firm’s financial strengths, weaknesses, trends, and strategies for improvement.  The scope of the review should include a look at productivity trends, market reliance, margins, expenses, investment levels and financial risk.

Talent.  Just as a law firm is nothing without clients, it is nothing without talent.  Successful law firms usually are blessed with talent, but positive talent levels in the future are not guaranteed.  Whether 2018 was a banner year or not, leadership should perform a serious talent review of each person, each practice segment, and the back of the house.  Upon performing those assessments, leadership should consider possible improvements and whether a boost in talent can be realized in-house (through training, focus, or otherwise) or by acquisition of outside talent. If the review identifies gaps in the firm’s talent profile, the firm should act to fill the holes.

Culture.  The quality of and commitment to a law firm’s culture is often cited as critical to success.  Yet the pursuit of high financial performance or growth can undermine a firm’s culture.  An annual review of the firm’s culture can identify whether short-term initiatives or successes have come at the expense of the firm’s valued culture.  Being faithful to the firm’s culture generally is a good idea, but not always.   Indeed, a review may spur the realization that culture has changed for the better (or at least not for the worse).  A yearly review of the firm’s culture allows the firm to correct unwitting detours, embrace good changes, and plan for a future in which the firm’s culture is aligned with its strategy.

Succession. Every year that passes brings a firm closer to the need for an effective client relationship and leadership succession plan.  Whether succession is more client-relationship driven or leadership based, annual attention to the topic is vital.  Even firms that have planned previously must pause each year to see if they remain on the right track.  A firm cannot be comforted simply because it has addressed succession in the past.  Existing plans should be reviewed to determine whether a refresh is required and whether implementation elements need updating.

Successful years at law firms seldom occur due to happenstance.  Rather, great years require leadership focus.  Has your law firm brought the needed focus as it prepares for 2019?