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CASE

ANONYMOUS

Recovered profitability after redesigning internal value chain

RETAIL & SERVICES

With the help of Knowit’s management consultants the client, one of Sweden’s largest law service providers, could identify their key profitability levers. A roadmap of high-yield activities was collaboratively developed and implemented, resulting in a 9 percentage point growth in EBIT margin.

CHALLENGE

Increased competition from digitalized providers

The law firm had been facing headwinds due to competitors leveraging digitalization and pressurizing the Company’s market share and margins. This led them to heavily invest in digitalization and increase headcount without aligning with demand, which resulted in negative profitability.

Knowit’s management consultants were brought in to review the entire value chain, increasing transparency, and to make the law firm profitable again.


SOLUTION

A plan for profitable operations with digital support

The project started with profitability analysis diagnosing current revenue streams and cost structure. This was followed by interviews, work meetings, and workshops to identify key improvement areas and create commitment throughout the organization. Key profitability levers affecting revenue, pricing, and cost were identified to prioritize high yielding activities.  

Implemented activities included: 

  • New price model and routines to ensure compensation for realized customer value as well as developed routines for additional sales
  • Automation to increase efficiency and client-facing occupancy rates 
    Product mix optimization to enable higher occupancy rates and billable hours resulting in staff reduction  
  • Employee-client match optimization to improve customer value and streamline internal collaboration 

RESULT

Implementation support for value creation

With the help of Knowit, the law firm implemented the suggested roadmap in six months. Knowit led the Program Management Office (PMO) including governance and monitoring of work streams to ensure progress. The law firm’s results turned from loss to profit with an EBIT margin increase of 9 percentage points in a year. Despite significant changes, NPS (Net Promoter Score) increased both on the customer side and for employees.


How the solution contributes to Agenda 2030

Contribution to goal 8: The assignment has contributed to goal 8 by reversing the law firm’s earnings to generate a positive result. Positive results lay the foundation for sustainable economic growth and are necessary for long-term and sustainable business.

SDG 8

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Erik Påhlson

Manager of services in Profitability Management