Traveling around the country and interacting with court reporting firm owners, it seems one of the major topics of discussion is how much the court reporting industry has changed over the last 25-30 years. From all accounts, the heyday for court reporting was in the 80’s and the very early nineties. This change, for the most part, has caught many owners off guard and wondering what their options may be at times. I’m not sure there is a single answer or a singular solution to these industry changes. Change is inevitable in almost all industries over time. Some of the changes are beyond your control and some of the changes are manageable. To garner a better idea of these changes, let’s look at this from a macro and micro vantage point:
- The entire country went through the worst economic downturn since the great depression between approximately 2008 and 2011. It affected every industry nationwide. The legal community was no different. The size of the legal work pie was greatly reduced during this period of time for all of the service providers and the law firms. Many firms downsized because of a lack of work in the market place. No one could have controlled the depth and length of this recession once it began.
- In addition to the amount of overall work being constricted, there has been additional competition for that work, on a national basis, from national contracting services. In most cases, they have more resources than most local firms, which make it more difficult for local or regional firms to compete.
- The local firms in your own market place have become much more competitive and in some cases may even be cutting prices in an effort to garner more business from their local market place. Many firms are simply trying to survive. Firm owners are doing things now they would not have considered 25-30 years ago. Competition is present within every industry. Thirty years ago, I never saw a law firm advertising its services on TV, and now, it’s hard to turn on a channel and not see a law practice advertising its services.
- Technology is constantly changing and that trend will continue. It can be an ongoing expense that creates tremendous pressure for most firm owners. As we all know, from our continual purchase of new technology, the technology bus continues to advance in every aspect of our personal & professional lives.
When you look at the macro picture, as a firm owner, there is very little control you have over these changes or the overall market place. At the end of the day, you cannot control what your competition will do or not do. You cannot control the amount of work that may or may not be generated by the legal community or the large companies. You cannot control the ethics, or lack thereof, of other firms or other owners. What can you do about the macro picture? It seems safe to say, very little or nothing at this point.
Now, let’s look at the micro view. The micro view is defined as the things a firm owner does have complete control over within their own companies and their own resources. Many times, firm owners can be their own worst enemy when it comes to the micro picture because they are not coordinating all of their resources to produce the best results. They make adjustments to their business models from time to time, but many times, the adjustments made are short term reactions and not part of an overall strategy or direction. If you look at all the different aspects of ownership within a firm, there are always challenges that will present themselves on a daily, weekly & monthly basis without much warning. Owners are forced, on a constant basis, to react and make choices & decisions that may solve these short term problems. However, this will have detrimental effects on the company and its results in the longer term. I refer to this as reactive management. Within many small companies this style of management has evolved over a long period of time and will impact the overall results. If we were to lay out some of the responsibilities of ownership, it might look like this:
These issues represent a few of the concerns that owners may have to coordinate to produce the best results possible for the firm. Where does this cycle begin or end? There isn’t always a clear path for an owner to follow within their respective firms. The main goal should be to maximize every aspect of the things you, as an owner, can control. As stated earlier, there probably isn’t a singular solution to the many challenges you face as the industry changes, but rather a comprehensive approach that encompasses all the aspects of your business. They are all contributing factors to your success or failure and leaving anything out of your plan can have detrimental effects for you and your firm. When looking at the micro view, there are a number of questions that firm owners might be asking themselves:
- Is my firm prepared for the changes in the industry?
- Have I addressed all of the issues that I can?
- Is my firm structured to produce positive results?
- Have I given myself all the tools necessary or am I just doing things the way we have always done things?
- I have cash flow, but do I have cash retention from the cash flow?
- Are chocolates, candy & pizza my only option for new business?
- Am I doing all I can?
The underlying concept is to be as proactive as possible within the things you do have control over and oversight for. Most of the times, owners are reactive, in terms of how they are managing their underlying companies. This reactive approach will usually not produce the best results possible.
If you determine that you want to focus on the things within your firms that you can control, there are some things you can do that may provide some assistance as you move forward:
- Review your current business and assess where you feel comfortable and where you may have questions or concerns regarding the flow of the business or the results being produced. Look at all aspects with an objective eye. Many times you are doing things today because you did them that way twenty years ago. We have established that the industry has gone through great change over the last twenty years, so doing things the exact same way as you did twenty years ago, may not be effective anymore.
- Develop a comprehensive strategy to address the issues you are uncomfortable with within your company, understanding that every aspect of your business will contribute to the success or failure of your company. Too many owners react to situations or market conditions on a knee jerk basis and that will usually create additional issues downstream. Once you have a comprehensive strategy, it becomes much easier to determine what specific tactics you will use to achieve your goals.
- No more assumptions. Take that word out of your vocabulary as an owner. Too many owners assume far too much about their employees, contractors, vendors, clients, reporters, etc. We have all heard what they say about assume and it’s true! At a time in the industry, when it is more difficult than ever to compete, assuming anything can be very detrimental for a firm owner. Assumption will also lead to our next point, a lack of communication.
- Increase Communication within your firm across the board. Owners to staff, staff to staff, owners to reporters and reporters to owners & staff. Communication is often overlooked as a viable solution to many issues within small business environments. This dynamic exists because most of the time we assume that because we are small and see each other on a constant basis, we are already communicating very well. That is not the case 99% of the time. Again, at a time when you are trying everything you can to compete, it’s important that all of your resources are going the same direction. If they are not, you will not produce the best results with your efforts.
- Follow through with your strategy. This is probably the most important thing, as an owner, you can do. Most of the time, owners have incredible thoughts, ideas & plans they have developed. Without ongoing follow through from owners, a plan quickly becomes yesterday’s news and never makes a real difference in the business or for the owner. Don’t expect an immediate turnaround or result from a defined plan. If your company is 25 years old and you can make meaningful impact in 4-6 months, that’s a success. Court reporting firm owners tend to be driven by deadlines because their industry is driven by deadlines, but don’t set unrealistic timelines for your improved results. Very few things can happen overnight.
ABOUT THE AUTHOR:
Terry McGill is a small business consultant and managing partner of Strategic Business Directs. Connect with him on LinkedIn.