Christmas is almost upon us, so what could be better than that most sociable of pastimes – a boardgame. Profitability Business Simulations’ (PBS) cashflow product for the legal market might not be Monopoly, but it managed to keep a room crammed with lawyers from Ashurst Morris Crisp, KLegal, Nicholson Graham & Jones (NGJ) and Taylor Wessing gripped for a whole day, as they saw in 3D all the glories of financial management brought to life on a board.
9.30am The game begins. Outside Convocation Hall in Westminster, the site of the day’s play, the Household Cavalry are arriving for the state opening of Parliament. Inside, Nigel Downing, managing director of PBS, is giving the competitors a much-needed tutorial on the mechanics of Legal Profitability, the game that does what it says on the box. Four teams sit at tables laden down with a board, casino-like chips and bundles of papers (which later turn out to include balance sheets, profit and loss accounts and the all-important checklist).
It is two hours before the first round proper kicks off. By that time Downing has taken the teams through an explanation of the board, the basics of the game and the strategies that might be employed to win (ie make the most profits per partner).
The premise is that each team is a law firm founded by two partners, each of whom contribute 25 units of currency (equity) to get the firm off the ground. They hire assistants and associates, making sure they cover the salaries, pay for premises, purchase furniture and office equipment, stump up for administration costs and allow for non-billable time (in the simulation this is estimated at 40 per cent for each member of staff). Money comes in, money goes out. In other words, it is just like any law firm.
Once up and running, the key part of the game kicks in: firms are invited to bid for contracts in a competitive market, the success or failure of which determines the level of profits each firm makes. At the end of the day (in this case literally), the team that makes the most profits per partner wins.
11.30am After coffee and a hand-holding run through a round, the teams are on their own. From the off it is clear that there are as many strategies in the room as teams. NGJ senior associate Martine Trouard-Riolle, team captain of the modestly named ExpertsRUs, proves that rapid expansion is in the blood at her firm by making an early play for growth. She recruits heavily at the first opportunity, with a new partner, five associates and eight assistants. It gives her team the muscle to pitch for three potentially remunerative contracts on aggregate expertise, with Trouard-Riolle pointing out that, in the game at least, “associates work out much better value than partners”. It also means the team needs to borrow 80 units to cover the additional costs.
The other teams are more cautious. Taylor Wessing’s team The Destitutes, for example (is team captain Richard Bursby dropping hints with that name?), picks up a new partner, who stumps up the required 25 units, but only takes on an additional associate and five assistants, keeping the leverage low. Bursby then plumps for a strategy that places more importance on business development than numbers of bodies.
Before lunch the first round of bidding for contracts begins. Teams can choose to bid on expertise, business development time invested or price. The level of each category required to win varies between contracts, so, as Downing points out, “the challenge is to decide which commercial contract you want and to create a law firm that reflects that market”.
ExpertsRUs’s mass hiring strategy pays off immediately. The team wins all three of the contracts for which it bid on expertise. The Destitutes win contracts on price (there is some impressive lowballing going on) and business development, while teams A (KLegal’s Ambulance Chasers, featuring managing partner Nick Holt) and B (Boom or Bust from Ashursts, headed by partner Simon Beddow) win nothing.
“In the beginning,” says Downing, “go out and get what you can. Put lots of bids in. But be careful not to overdo it so you’re stretched. If you can’t fulfil a contract you’ll be penalised 50 per cent of the price for late completion.” No worries for teams A and B on that score, then.
12.45pm By this stage of the day it is clear to the players, as well as physically on the board, what happens to each firm’s cashflow and profits as they put into practice the choices they make. Winning contracts pushes up the work in progress (WIP). Rapid expansion ramps up the overheads as well as the expertise and there is no guarantee that you will win a contract to beef the pot of cash back up. If a team gets in a hole with its cashflow, it can always go to the bank – but loans have to be paid for as well.
1.55pm After lunch the game and the players get into their stride. Two more rounds of contract bidding allow the teams to build up their firms and teams A and B finally win some work. In between each round, Downing makes the competitors earn the eight CPD points they receive for playing the game in a question and answer session. Unanimously, the players agree that seeing a physical representation of cashflow and profits is more useful than any whiteboard-based training on the same subject. The movement of the chips around the board also highlighted the key pressures that force firms to borrow, including outstanding debtor days.
Other factors introduced at each new round, such as client management, highlight the steps firms can take to improve cashflow. “What would you say is the most important influence on a client in terms of cashflow?” asked Downing.
The answer, borne out by the game, was to ensure frank discussions with a client before the firm bids for a contract, as well as putting in business development time and putting into the client’s mind that being paid at a certain rate was “how we do business”. Having that approach confirmed by a letter of engagement or backed by money on account comes next. “It’s too late when you write out your bill,” added Downing. “It’s sometimes a difficult thing for a lawyer’s mind that they’re doing a job for their client, and they expect to get paid.”
3.30pm The final round. Although it is only a game, the competitive nature of the bidding process has actually generated a sense of tension. Nerves were even getting frayed. No one quite flung the board in the air and stormed out like a 10-year-old, but a few allegations of dodgy dealing were being bandied about.
Despite the overall good reception to Legal Profitability, several lawyers were also picking holes in the game. “Too generic,” claimed one. “In the real world, boutiques don’t compete against the magic circle. It’s not a level playing field, there’s no room for specialism.” Another team member pointed out that at the outset Downing had claimed the game was about strategy and that the biggest firm would not necessarily win. “In practice, in the game the team with the most bums on seats wins the most contracts,” she said.
On this day at least, that turned out to be true. The go-for-growth NGJ team made merger partner Pinsents proud by winning with the highest profit per partner figure. But its intended shouldn’t get too carried away, it is only a game.