The Worst Strategic Planning Mistake I See Law Firms Make

Strategic planning sessions in law firms often follow a predictable pattern. Partners gather for an intensive retreat, consultants present frameworks, and everyone leaves energized with a polished document outlining the firm’s ambitious five-year vision. Then, six months later, that same document sits forgotten in a drawer while the firm operates exactly as it did before.

The core mistake isn’t poor planning, it’s treating strategy as a destination rather than a journey.

What This Looks Like in Practice

Most law firms approach strategic planning like a major transaction: assemble the team, dedicate intensive time, produce deliverables, and declare success. This event-driven mindset creates the illusion of progress while ensuring nothing actually changes.

The resulting strategic plans often share common weaknesses. They contain broad aspirations without specific owners, ambitious timelines with no accountability mechanisms, and initiatives that sound impressive but lack the operational detail needed for execution. Partners nod in agreement during the presentation, then return to their practices wondering who’s supposed to make it all happen.

Law firms are particularly susceptible to this mistake because their business model rewards individual performance over collective execution. Partners excel at managing complex client matters with clear deadlines and billable accountability, but strategic initiatives often lack these same forcing mechanisms.

Additionally, the partnership structure can create diffusion of responsibility. When everyone is responsible for strategy, no one feels truly accountable. The managing partner may champion the plan, but without active engagement from practice group leaders and key rainmakers, momentum quickly dissipates.

The Antidote: Strategic Discipline

Successful firms recognize that strategy requires the same rigor they apply to major client engagements. They embed strategic thinking into their regular operating rhythm through monthly leadership reviews, quarterly progress assessments, and annual recalibrations.

These firms assign specific partners to own strategic initiatives, complete with defined milestones and resource commitments. They track progress as systematically as they track billable hours, understanding that what gets measured gets accomplished.

Most importantly, they communicate progress consistently across the firm. Partners and associates understand not just what the strategy is, but how their daily work connects to larger objectives.

What You Can Do Right Now

Rather than grand retreats that promise transformation, effective strategic planning starts with honest assessment of execution capacity. Firms should identify two or three critical priorities that can realistically be advanced given current resources and competing demands.

Each priority needs a champion, typically a partner willing to dedicate meaningful time to driving progress. These champions need authority to make decisions, allocate resources, and hold others accountable for deliverables.

The planning process itself should be designed for implementation, focusing more on quarterly action steps than five-year projections. Market conditions change, client needs evolve, and competitive dynamics shift; strategy must be agile enough to adapt.

Final Thought

Strategic planning fails when firms mistake the plan for the process. The document itself has little value; the ongoing discipline of strategic thinking and execution creates competitive advantage.

The best law firms understand that strategy isn’t about predicting the future perfectly; it’s about building organizational capabilities to respond to change with intention rather than reaction. This requires treating strategic execution not as an addition to daily operations, but as the framework that guides every significant decision.

When strategic thinking becomes embedded in how a firm operates rather than confined to annual planning sessions, real transformation becomes possible. The question isn’t whether your firm has a strategic plan, but whether strategic discipline shapes how you actually run your business.

What is the impact of the 25% Trump tariff for Canadian law firms and their clients?

I asked Perplexity Pro for its thoughts on this issue. Here’s what it said:

The newly imposed 25% tariffs by the Trump administration on Canadian goods, coupled with Canada’s retaliatory measures, will significantly impact Canadian law firms and their clients across various industries.

Impact on Law Firms

  1. Increased Demand for Legal Services:
    • Law firms specializing in international trade, customs, and compliance will see a surge in demand as businesses seek advice on navigating the new tariff environment. This includes guidance on supply chain restructuring, tariff classifications, and exploring exemptions.
    • Firms may also handle disputes arising from cross-border contracts disrupted by increased costs or supply chain issues.
  2. Opportunities in Market Diversification:
    • Lawyers will assist clients in identifying alternative markets to reduce reliance on U.S. trade. This involves understanding new regulatory environments and negotiating agreements with new partners.
  3. Corporate Restructuring and Financial Advisory:
    • Small to mid-sized law firms may find opportunities in helping businesses restructure operations or secure financial support through government programs like the Trade Impact Program or loans from the Business Development Bank of Canada.
  4. Franchise and Industry-Specific Legal Needs:
    • Industries like franchising, agriculture, and manufacturing will require sector-specific legal expertise to address challenges such as cost increases, supply chain disruptions, and employment impacts.
  5. Litigation and Dispute Resolution:
    • Disputes over contract modifications or terminations due to tariff-related financial strain will likely increase, providing work for litigation-focused law firms.

Impact on Clients

  1. Higher Costs and Reduced Competitiveness:
    • Clients exporting to the U.S. face higher costs due to tariffs, reducing their competitiveness in American markets. Similarly, Canadian importers of U.S. goods will deal with increased prices due to retaliatory tariffs.
  2. Supply Chain Disruptions:
    • Businesses reliant on cross-border trade will need legal assistance to renegotiate supplier contracts or find alternative suppliers to mitigate disruptions caused by tariffs.
  3. Contractual Challenges:
    • Cross-border contractual obligations may need to be renegotiated or terminated as financial incentives shift, creating legal complexities that require expert guidance.
  4. Government Support Navigation:
    • Clients will need help accessing government support programs like the Trade Impact Program or Farm Credit Canada financing to manage liquidity challenges and diversify markets.
  5. Employment Law Issues:
    • Companies facing reduced revenues may turn to law firms for advice on workforce management strategies, including layoffs or restructuring under employment laws.

Strategic Considerations for Law Firms

  • Law firms must proactively position themselves as experts in trade law and market diversification strategies.
  • Offering comprehensive risk assessments and contingency planning services can provide a competitive edge.
  • Collaboration with financial advisors and government agencies can enhance client support during this period.

In summary, while the tariff environment creates challenges for Canadian businesses, it also presents significant opportunities for law firms to offer critical legal support across trade compliance, dispute resolution, market diversification, and financial advisory services.

Strategic planning and the high-performing law firm

By Colin Cameron and Susan Van Dyke

Originally published in BCLMA Topics, Winter 2022 Edition

A fractured partnership, compensation concerns, retention headaches, work delegation issues and a myriad of other significant struggles inside a firm are massively disruptive, stressful, distracting and ultimately, very expensive. In the past few years, we’ve seen managing partners and executive committees who are hard-working and well-meaning but frustrated and tired.

Strategic planning assignments are significant undertakings and sometimes with a lot at stake. Firms invest time and resources to ensure they get it right, and implementation requires long-term commitment to achieve goals.

Colin’s AI assistant Eric

To get most partners on side, a bespoke plan must:

  1. Reflect the culture of the firm and desires of the partners
  2. Be powered by your firm’s data with a professional financial analysis
  3. Be developed at a pace that achieves a tipping point of support by key partners
  4. Emphasize implementation of strategies 
  5. Be facilitated by credentialed experts with experience in law firm planning

Every major component of the firm is connected. For instance, if compensation doesn’t reward desired behaviour most lawyers will only focus on current work. When firm governance is unclear or poorly structured, decisions take too long and leadership is lacking or missing altogether. Leadership is fundamental to a highly functioning operation and essential to implementing your strategic plan. 

Talent retention is another significant issue lately. When associate retention is low, partners lose the benefits of leverage and spend too much time on billable work rather than mentorship, business development (BD), recruitment, or management. And average costs of losing an associate are now north of $300K, and some suggest more. 

Let’s look at some of these issues further.

Compensation model isn’t working for us

Many firms mistakenly decide on a compensation system before developing a plan. This often results in one of two compensation models: An “eat what you kill (EWYK)” formula-based model or an equality model with a lockstep compensation system. Both options have risks. 

The EWYK model encourages “lone wolf” behavior at the expense of a team effort or what’s in the firm’s best interest. It can be divisive and stunt growth as only individual effort is rewarded. The equality model can lead to mediocre firm performance and underperforming partners. We’ve seen firms lose high performers under this model. 

Instead, we recommend a “subjective merit” model where both qualitative and quantitative criteria are considered in partner compensation. A compensation committee typically evaluates partners’ contributions with the Managing Partner. As a performance-based model, it motivates high performers, rewards good management, encourages team effort and discourages lone wolf behavior. Partners are motivated to do non-billable tasks, help achieve firm goals, and encourage the right partner behaviors, such as firm building and levering work to associates.

Firm governance needs adjusting or an overhaul

Many firms have governance systems that are not advancing the firm’s interests. We have seen the following symptoms when the wrong structure is in place:

  • Leadership can’t make decisions 
  • The firm is stuck and not moving forward
  • There is a lack of focus
  • Decentralized decision-making without oversight
  • Firm-wide confusion of who does what
  • No written firm plan

Many firms run as a democracy where partners operate independently and are not accountable to anyone. Firms are hesitant to manage themselves like other businesses with a CEO with authority and responsibility. Instead, committees handle day-to-day operations, including a management committee with little power to execute a plan, if there is a plan. 

Indecision results in lower profitability, missed opportunities, high opportunity cost of partner hours spent on slow decision-making, and a loss of good partners who grow frustrated with the lack of firm progress.

The solution is to appoint a Managing Partner (MP) to act as the CEO and coordinate creating a firm plan approved by the partnership. The MP will execute the plan with authority to achieve the firm’s goals. The partnership will evaluate the MP’s performance to recognize the MP’s efforts like any regular business is key. Once this centralized governance system is in place, your firm will become far more profitable and competitive in the market.

Retention of associates is a significant challenge 

Retention challenges are causing significant disruption for partners and interfering with firm profits and growth. Of course, associates leave for a variety of reasons, however, firms can recalibrate to better accommodate their needs and desires to win loyalty and a long-term commitment.

Susan’s AI assistant

The associate experience is not what it was 25 years ago, which is stating the obvious. But we regularly engage in discussions with partners who are either puzzled or inflexible to the needs of today’s associates. Many are looking for alternative career paths, meaningful opportunities for growth, client contact, fair compensation, some flexibility to work from home, robust mentorship, coaching and skills training, and work/life balance. Partner investment in associate development should be baked into annual plans.

Engaging with associates on these issues, welcoming ongoing dialogue and taking corrective action are essential in creating an associate-friendly culture. 

Our lawyers don’t know how to develop work

A fulfilling career and an opportunity to earn a greater income usually requires developing skills to attract new work. Again, this investment must be supported by rewarding non-billable time for marketing and BD and skills training. Most associates are interested in learning how to retain clients and win new work and expect firms to support this growth. Without associate participation in BD the firm’s succession plan in rainmaking is hindered.

It takes years to generate work, benefit from referrals and develop a desirable practice. Some leave training too late and provide this support too infrequently. Aside from mentorship, BD is one of the largest investments you should make in associates.

Partners frustrated that associates aren’t participating in attracting new work should revisit their training programs, individual business plans, BD budgets and how they reward participating in marketing and BD and origination of work.

Strategic planning connects all your organizational components and links your vision to your goals and actions to create a high-performing firm with an enduring legacy. 

Colin Cameron is a chartered accountant and former COO of a large regional Vancouver-based law firm and founder of Profits for Partners, Management Consulting Inc. Susan Van Dyke has held several senior legal management positions and is Principal of Van Dyke Marketing. Together, Colin and Susan bring 60+ years of vast legal management experience in small to large law firms to their strategic planning projects.