Is your business fit for the challenges ahead?

Improving profits for a law firm based in Cornwall which was suffering from financial difficulty

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Issue:

The firm had got into financial difficulty a few years previously. These difficulties continued into the following years trading as the market continued to become more competitive with the firm suffering a £150,000 loss and facing a large property debt from the offices. This led to the owner of the firm looking to sell or merge the company as a bail out. Through all the difficulties the Principle’s philosophy was to get his head down and work ever harder and longer hours in the hope of covering all the mounting costs. As a result he became increasing removed from managing the business and the staff became unsettled, as they often felt left behind and kept in the dark.

Solutions:

  • We put together a business plan to help him rationalise and prioritise his business objectives and enable to balance his personal fee earning with managing the staff to be most effective, instead of feeling he had to do it alone
  • First objective was not to sell or merge as this actually made the property debt issue worse not better
  • Second was an urgently required re-structure of the team in terms of personnel and skills to remove some negative influences, boost morale and the quality of staff, and have a more efficient gearing for fee earning versus admin costs moving forward across the whole team
  • Third was to maximise the revenue potential of the property to increase revenue and accelerate the payback period
  • Fourth was to implement a marketing strategy to re-position the firm in the local market and increase new business opportunities for the whole team – and to move the foundation of work away from personal referrals of the Principle (which he felt obliged to do) to work coming into the team as a whole

Outcomes:

  • By the end of the following year the business looked and felt very different
  • £150,000 trading profit
  • Overdraft cleared and the business financially stable removing need to sell or merge
  • Top floor of premises let producing substantial contribution to property debt costs
  • Business with a clear road ahead in terms of vision and strategy
  • New team in place with a high number of young, ambitious graduates being attracted to the firm
  • Principle who understands the balance between doing and managing and is actively delegating to build skills of the team and optimise gearing for profitability
  • New business name, brand identity, website and market offering
  • The business now has a clear sense of direction, a great reputation and has been used as a case study for Barclays Bank success stories