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Growing Your Business

Business Processes

A business process can be anything from introducing a new client, to opening a new account, to on-boarding a new employee to structuring your website. It is the set of steps taken in day-to-day work activities and performed to achieve desired outcomes.

Business Process Management (BPM) refers to a holistic approach of optimising and aligning your business processes to meet the needs of your clients and the practice staff.  

Good management of business processes is about making the best use of your time and resources with streamlined and continually improved processes for running your practice, tracking performance and providing the same quality of service to your clients every time.

Carrying out BPM before you introduce new technology can also assist in better integrating your business processes with that new technology. Good project management, change management and performance measurement complement BPM.

Other terminology for BPM includes:

  • Total Quality Management (TQM)
  • Business Process Improvement (BPI)
  • Continuous Improvement Processes (CIP).

Why is Business Process Improvement Important?

Improving business processes can make a large difference to profits by reducing costs. Good management of your business processes enables you to make efficient use of your time and resources while ensuring your clients are receiving a quality service. It can help you gain a better understanding of your business processes by mapping workflows, eliminating waste and reducing bottlenecks.

Improving Your Business Processes

Generally, BPM methodology has five phases:

  1. Define the processes you want to improve.
  2. Prioritise those processes. Tip – start with simple business processes first.
  3. For each process, map the current process and collect and analyse any relevant data.
  4. Determine the underlying cause of the problem. Improve or optimise the current process based on the data analysis to create a new, future state process.
  5. Pilot the new process to check that it works. Run the new process with checks to ensure it is followed consistently by all.

Practice Mergers

A common way to grow or expand a practice is to merge with another practice. A practice may consider a merger for a number of reasons, including:

  • to corner a particular geographical area
  • to benefit from strategic partnering
  • to acquire a specialist team (by merging with a niche practice)
  • to nullify the competition
  • to gain a new lease on life for the practice
  • to increase profitability
  • back office synergies
  • similar clients
  • similar strategies
  • culture.

Some considerations regarding practice mergers:

  • Is the merger being considered for strategic reasons or as a response to outside developments?
  • Be clear on the reasons why a merger is necessary.
  • Conduct a thorough analysis of your own practice.
  • Search for a suitable merger partner.
  • Conduct a series of interviews with key representatives of the other firm to decide whether a merger is feasible.
  • Keep key staff informed of merger negotiations.
  • If another firm agrees to a merger, formulate a merger plan to facilitate the union.
  • Keep track of objectives of the merger to make sure it is on track.
  • Early in negotiations, put in place a process for withdrawing from a merger.

Note: Either one or both of the merging practices will need to close in order to give way to the newly amalgamated practice. As such, trust and controlled monies will need to be transferred to new accounts with authorisation from existing clients. Significant tax implications may also apply, in which case accounting advice should be sought early in the planning of a merger.

To assist members in considering a merger the LIV has prepared a series of checklists and guides:

  • Practice Analysis ChecklistTo properly assess a merger, it is important for a practice to undertake a detailed and critical self-analysis and prepare a practice profile document. Any shortcomings in the financial performance or capacity of the firm, along with any deficiencies, should be identified early, and a plan made to rectify the shortcomings or provide appropriate explanations.
  • Issues for Merger Discussion GuideKey issues that must be identified.
  • Merger Plan A merger plan draws on the strengths, weaknesses, opportunities and threats affecting the merged practice (SWOT analysis). It identifies objectives for the merger, which will outline the expectations of the two practices if the merger takes place. In particular, the plan must address governance issues.

Other steps to take:

  • Exit strategy If a merger partner is not confident the merger will work, or if information emerges that dissuades him or her from proceeding, the partner needs a way to extricate him/herself from the merger without penalty or serious ramifications. This requires full and frank discussion from the outset. At the start of discussions, it is as important for the parties to discuss their possible exit from the process as it is to talk about how they may proceed.
  • Preparing to merge Establishing a new, amalgamated practice means that either one or both of the merging practices will be closed down. With this transition, practical and regulatory procedures apply. 
  • Advise the Victorian Legal Services Board + Commissioner (VLSB+C) of the partners, employees, new trust account details and external examiner of the new practice (also consider whether you need to advise a regulator in another state).
  • Advise the Legal Practitioners' Liability Committee (LPLC) and clarify your premium risk rating.
  • Advise clients of the commencement date of the new practice and your intention to transfer files, deeds and money to the new practice (client authorities are required to transfer money to new accounts).
  • Prepare a trust account reconciliation and statement of trust money as at the date of the old practice ceasing to be authorised to receive trust money.
  • Notify the external examiner and have a final examination conducted within 60 days of the old practice ceasing to be authorised to receive trust money.
  • Open a new trust bank account in the name of the new practice.

Frequently Asked Questions