HedsUP! From Hedley Consulting

Welcome to the Summer 2012
issue of HedsUP!

Keep Running Faster – You Might Win the Race to the Bottom!

"We can't solve problems by using the same kind of thinking we used when we created them."
Albert Einstein

Operational efficiency is necessary but not sufficient. Simply being better at doing things the way that they have always been done may provide some respite, a way to carve profit from a market in which downwards pressure on price is unrelenting, but it is not a long-term solution to the structural changes which are affecting the industry. By running faster, you might win the price-cutting race to the bottom but the real issue is whether you will have a sustainable business when you get there.

Doing things fundamentally differently will ultimately trump doing the same things more efficiently. To succeed firms will need both an outside-in and an inside-out perspective. From the client’s perspective, what are the areas of meaningful differentiation which will ease price competition? And how can the firm deliver these in a consistent way across its entire footprint? Looking from the inside out, what are the changes to working practice, disruptive technologies and innovative approaches that will break the downwards cycle? And how do we reshape our business, our people, our culture and our rewards systems to “walk the new talk”?

Industry consolidation through merger or acquisition is gathering pace. Key questions for the strategist must centre on how the merger can provide a Trojan Horse and catalyst for change, ensuring that the firm is reshaped and fit for the future? Simply combining two underperforming businesses (without an agenda for fundamental change and the development of an approach fit for a new-reality) will, in the final reckoning, create only a larger, under-performing business. Yes, such a firm may climb the greasy pole, and buy itself some time, but subsequent downwards descent is inevitable.

I hope that you enjoy this issue of HedsUP! If you have any questions or would like further information please do not hesitate to contact me.

Best wishes,

Andrew Hedley

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On your desktop

It’s Time to Compromise on Merger Candidates: Start Looking for a Doable Deal

Over the past four years, the ‘perfect storm’ of deregulation and economic downturn has crystallised issues for managing partners. Having drawn comfort from the belief that they had a strong and profitable business, albeit protected by regulatory barriers and driven by an exceptional period of bull market activity, firms have come back down to earth with a deafening thud. There is now an emerging and stark realisation that current trading conditions are, at best, the new normal. Worse still, it is not inconceivable that, even in the short term, competitive pressures will intensify, making the current climate appear relatively benign. We are witnessing, in real time, the end of law as a cottage industry and the industrialisation of the legal sector. It is inevitable that significant consolidation will occur in all segments of the market.

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Consensus is Not a Synonym for Unanimity

There is much talk about the importance of achieving partner consensus on the big decisions which will define a firm’s future direction. Consensus is a worthy objective and one which, as research shows unequivocally, is likely to lead to a more cohesive firm. There is less clarity, however, over what consensus means in practice and how it should be reached. What is clear is that consensus should not be a synonym for unanimity - firms have, for too long, been forced to the point of making the "decision of least offence" or the taking the lowest common denominator option by this misconception.

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News Bytes

Law Management Section Merger Toolkit

The Law Management Section Mergers Toolkit will be launched on 2nd August and is now available to pre-order. Edited by past chair of the LMS Nigel Haddon, the toolkit is designed to help firms gain a better understanding of the merger process and provides practical guidance throughout. Andrew Hedley has contributed two chapters - considering the strategic drivers for merger and the unlocking of the merger dividend. For more information or to order a copy click here.

Strategic Options in a Changing Legal Market Webinar

On 27th September 2012, Andrew Hedley will deliver a webinar on the subject of Strategic Options in a Changing Legal Market. The webinar forms part of the Law Society Law Management Section’s annual webinar programme. For more information or to book a place at the webinar click here.

The Cambridge Chartered Programme

Andrew Hedley has been appointed as a specialist tutor on Cambridge Marketing College's new Chartered Programme. This is a unique initiative aimed at helping delegates gain and maintain their Chartered Marketer status through a structured range of activities from networking events, through courses to self-study materials. For more information about the college click here or to download a copy of the Chartered Programme prospectus click here.

Client Strategy in a Changing Legal Market Report

Andrew Hedley’s Client Strategy in a Changing Legal Market report has now been published and is available to purchase online. Client strategy sits at the heart of all strategy. Without the ability to attract and retain clients, at a price which delivers an acceptable level of profitability, no business can be viable in the longer term. To read more or to order the publication click here.

Developing Strategic Client Relationships Report

Andrew Hedley’s comprehensive report, Developing Strategic Client Relationships, published by ARK Group, continues to attract purchasers from around the world. Running to over 150 pages, with case studies of leading firms and ground breaking initiatives in this area, the report brings a much needed strategic perspective to client development and relationship management. For more information about the report email enquiries@hedleyconsulting.com.

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