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Assessment 2 To UPLOAD SEPTEMBER
Assessment 2 To UPLOAD SEPTEMBER
ASSESSMENT 2
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ABSTRACT
This research examines internal audit methods in a legal firm. It highlights the impact of
financial stability, quality physical and human resources, as well as organisational management
in shaping the success of legal firms in a dynamic business environment. The assessment of the
management tools of SWOT, VCA and RBA to discern whether the law firm’s internal controls
and operations are in compliance with its internal policies as well as international best practice.
The findings indicate that overall, the organization’s operations are in compliance with the
organization’s long-term objectives, mission and operational policies which maximizes its
competitive advantage.
Key words: Value Chain Analysis, SWOT, Resource-based view, Competitive advantage,
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Table of Contents
Introduction.................................................................................................................................................4
CHAPTER 1..............................................................................................................................................5
CHAPTER 2..............................................................................................................................................7
CHAPTER 3............................................................................................................................................14
SWOT Analysis.........................................................................................................................................14
Resource-based view.................................................................................................................................19
Conclusion.................................................................................................................................................24
References.................................................................................................................................................26
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Introduction
This research entails conducting a thorough internal audit of XYZ Law Firm, a prestigious legal
institution with a nearly four-decade history. An internal audit is a systematic and impartial
assessment of an organization's activities, processes, controls, and financial information (Tien &
Thanh, 2023). By adopting a benchmarking approach, this audit will compare the organization’s
function to industry standards to assess effectiveness, efficiency, and quality, identifying areas
This assessment is divided into three major chapters. In the first chapter, there is a contextual
introduction to XYZ Law Firm as well as some discussion on the scope and the objectives of the
internal audit. The second chapter introduces us to the strategic management tools that will be
used to conduct the internal audit, that is SWOT, VCA and RBA. This chapter also provides an
analysis of the law firm using the tools identified. We then move to Chapter 3 where we will
assess and discuss the findings based on the analysis conducted in Chapter two. This analysis
Finally, once the findings have been assessed, in the last part of Chapter three, we will provide
significant insights and recommendations to XYZ Law Firm, so that they may harness its
strengths, rectify its flaws, and capitalize on possibilities in the legal business environment.
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CHAPTER 1
managerial processes by auditors. Auditors use scientific principles to assess internal controls,
risk management, regulatory compliance, and overall efficiency, with the ultimate goal of
improving governance and control (Levytska et al., 2022). In this research we will conduct an
internal audit on XYZ Law firm. In this first Chapter of the research, will examine the
background of the company as well as introduce us to the scope and the objectives of the internal
audit.
XYZ Law Firm, founded in 1985 by Bob Lowe, is a prominent legal firm with a history of nearly
four decades. The firm focuses on providing top-tier legal services and upholding justice and the
rule of law. With over five hundred employees in a modern and luxurious high rise multi
complex, XYZ Law Firm's mission is to deliver exceptional legal representation, advocacy, and
The firm's core values include a client-centric approach, integrity and ethics, legal excellence,
and community engagement. The firm operates in a dynamic legal landscape, leveraging its
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The firm's diverse portfolio includes corporate law, litigation, real estate, family law, probate
law, and other legal services. With a strong foundation and a clear mission, XYZ Law Firm
This internal audit will analyze the law firm’s financial controls, operational efficiency, legal
compliance, and adherence to internal regulations, with the goal of identifying possibilities for
The goal of this internal audit is to offer an impartial and objective examination of XYZ Law
Firm's internal processes, controls, and operations. The audit strives to identify areas for
improvement, assess compliance with internal policies and processes, and improve the overall
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CHAPTER 2
In our last chapter, we were introduced to the concept of internal auditing and we were then told
that the aim of this research is to conduct an internal audit of the XYZ Law firm to ensure that its
In this Chapter, we will build on that discussion by first discussing the three strategic
management tools, that is the Strengths, weaknesses, opportunities and Threats Analysis, the
Value Chain Analysis and the Revenue Based Analysis, then we will employ these tools to
conduct the analysis of the law firm. By using the three tools to conduct independent analyses,
we will acquire a comprehensive view of our legal company (Tien & Thanh, 2023).
SWOT Analysis
The SWOT analysis is a strategic management tool that assists us in identifying crucial internal
and external elements influencing our firm's success (Gürel, 2017). When conducting an internal
audit of a company using the SWOT analysis framework, it is the general practice to focus on the
2021). External variables (Opportunities and Threats) are typically addressed as part of a
separate analysis known as the PESTEL analysis (Political, Economic, Social, Technological,
Environmental, and Legal aspects) or as part of a larger strategic analysis (Alzeban, 2018).
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Strengths (Internal origin)
Financial stability is provided by the company's large financial resources, which include a
The organization maintains a competent and experienced team across all areas, which
There is a low turnover rate with excellent staff retention as a result of modern HR
development.
The company has cutting-edge offices and facilities, allowing for efficient operations.
The firm conducts consistent audits by reputable firms and the reports are then published
The management team lacks diversity, which may impede a broader perspective.
There are high overhead costs. Keeping a prominent office site and investing in cutting-
edge legal technology can result in high operating costs, which can have an impact on
profitability.
Because the firm predominantly operates in one region, it may be unable to assist clients
stymie collaboration.
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The measures for a risk-based approach are not stringent.
Opportunities:
Investigating opportunities to expand services into new practice areas or geographic areas
The integration of emerging legal technology solutions has the potential to increase
Threats:
The competitive nature of the business presents a challenge, with competition from larger
Economic downturns can have an impact on the company's financial stability and sales
growth.
Frequent regulatory changes may need significant compliance resources, affecting both
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Value chain Analysis
A value chain analysis (VCA) is a strategic management tool that helps organizations understand
the activities involved in delivering products or services to customers and how these activities
add value (Ensign, 2001). It enables us to analyze our operations and identify areas where we can
improve business competitiveness and customer value (Alzeban, 2018). This analysis will
incorporate both the cost advantage and differentiation approach so that the firm can enhance its
Primary Functions.
toward digitization.
Outbound logistics: 95% of client communications are via email. The firm mainly relies
Operations: The average case processing time is 90 days. Although the case processing
Sales and marketing: The lead-to-client conversion rate is 20%. The conversion rate
Service: Client satisfaction has been recorded as 4.5/5. A high level of client satisfaction
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Support Functions.
Infrastructure: Online databases were used in 95% of legal research. For legal research,
Human Resources: The employee turnover rate is 10%. A low turnover rate indicates that
Technology: Half of all legal research tasks and legal services are automated. The firm
has made great strides in automating legal research and its services.
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Resource based view
The Resource-Based View (RBV) is a strategic management paradigm and theory that
TANGIBLE
Office Space The physical location of the law company is in the
heart of the city.
Technology & Equipment The law firm utilizes several software and AI
technology to automate its case management, client
services, research and its communication. The law
firm also uses modern technology and cloud
computing.
Library and legal resources The law firm uses current online legal literature, case
precedents, and legal databases.
Financial Capital The law firm has a healthy financial account which is
audited and monitored by stringent internal financial
controls.
INTANGIBLE
Goodwill, brand & reputation The law firm has been in existence for around forty
years and is known for its ethical practices and its
client centered approach.
Legal expertise The Attorneys in the law firm are all experienced
lawyers who are assisted by hardworking juniors and
experienced legal support staff. Attorneys are given
incentives by Human resources to study niche areas
on a scholarship to enhance the skills of the firm.
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ORGANISATIONAL CAPABILITIES
Legal Research and analysis The law firm uses the mentorship approach to
improve these skills of its attorneys.
Litigation and negotiation skills Attorneys are trained in-house to negotiate and
mediate.
Client engagement and communication The law firm uses, feedback tools and follow-up
strategies to ensure client retention and satisfaction
through strong client communication skills.
Adaptability and innovation The legal landscape is always changing. The law
firms remain adaptable to new legislation,
technologies, and customer expectations while also
encouraging legal service innovation.
Team collaboration The firm prioritizes team work and as such several
legal cases are conducted by teams. Moreover, there
are often social and networking activities to promote
collaboration.
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CHAPTER 3
In this Chapter we will interpret and discuss the findings and observations derived from our
combined analysis in Chapter 2. This Chapter builds on the previous Chapter where we
conducted an internal audit of the XYZ Law firm using the SWOT, VCA and the RBV tools.
Our discussion will begin by identifying the findings and then discussing the observations with
regard to best practices. This chapter will also conclude by identifying key recommendations for
SWOT Analysis
The SWOT analysis is a useful starting point for strategic planning (Majekodunmi, 2021). It
provides a snapshot of the current situation and can assist businesses in identifying areas that
The findings of the SWOT analysis indicate that the firm's financial position appears stable and
its internal controls facilitate regular audits and financial transparency. Its physical infrastructure
has an efficient layout plan and ergonomic structure that fosters productivity and provides a
positive work environment. However, the firm should consider implementing strategies to
review office space optimization. In addition, the findings indicate that the firm has complied
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with the best practice human resource policies for recruitment, training and retention. This is
evidenced from the skilled workforce and the low turnover rate of employees.
However, despite these positive attributes of the firm’s physical, human and financial resources
there are various flaws in the management structure. For instance, there is lack of diversity and
inclusivity, there is a flat organizational structure, and a lack of leadership development. These
flaws will impact the productivity and effectiveness of the law firm if measures are not
implemented to resolve these weaknesses. The firm may wish to consider amending the
organisational structure to one that is hierarchal as well as implement new recruitment policies
Finally, in relation to the employees, the findings discovered that there are talented and stable
staff. In this regard, the organisation is advised to implement strategies to incentivize the staff as
well as consistently evaluate their skills and train the them to ensure they meet the organization’s
long-term objectives.
Now that we have discussed some positive attributes of the SWOT analysis findings, we will
shift focus to consider some areas that the firm can review for improvement. For instance, while
the physical, financial and human resources are sufficient for the firm to achieve its tasks as well
as efficiently serve its customers, there has not been a substantial emphasis on a risk-based
approach. The firm is advised to implement more stringent risk management internal controls
and monitoring, particularly in relation to anti-money laundering since lawyers are at a high risk
In the final analysis the company has several strengths and it would be wise for them to mitigate
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In the next section of this chapter, we will discuss the findings from the value chain analysis and
the resource-based view. These tools are excellent additions to the SWOT analysis as this
analysis has several flaws which does not facilitate a comprehensive analysis of the company.
For instance, some of the limitations of the SWOT analysis include its propensity of being a
subjective tool that relies on individual perspectives, leading to bias and inconsistency (Gürel,
2017). It lacks prioritization, depth, actionable insights and it is static as it does not generate
solutions. Its greatest demerit however, is that it doesn't provide competitive benchmarking
(Gürel, 2017). For a company to survive in the dynamic legal landscape, a company must have
sufficient knowledge regarding its competitive advantage for strategic planning (Nwachukwu, &
Chladkova, 2019). Therefore, it is in this context of the limitations of the SWOT analysis, that
The value-chain analysis sees the organization as a series of value-creating activities (Ensign,
2001). In the analysis conducted on the XYZ Law firm, it is critical to determine whether the
findings indicate that the firm may be able to attain a competitive advantage as well as
profitability (Kumar, 2016). This discussion will consider the findings categorically, that is based
The findings of the analysis of the firm’s primary activities are generally positive. In terms of the
findings of the inbound operations, the findings suggest that the company should continue to
foster electronic document submission to reduce paper document expenses, and the possibility of
errors associated with manual data entry. The firm may wish to consider implementing
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standardized digitization procedures to augment this. Additionally in relation to marketing, the
findings recommend that to enhance client satisfaction, the firm should gather feedback, address
concerns, and personalize services. In relation to service, it is observed that targeted marketing
campaigns, lead nurturing strategies, and a CRM system can improve retention and referrals.
Furthermore, in terms of operations, the firm should examine the various stages of case
processing in order to identify bottlenecks and streamline procedures. Using technology such as
case management software and workflow automation could drastically shorten processing times
while preserving accuracy and quality. Finally, in relation to outbound logistics, while email is a
convenient communication medium, the findings imply that the firm should focus on optimizing
response times and ensuring that emails are clear, succinct, and professionally written.
In light of our discussion of the findings above, it is now necessary to consider whether these
findings add value to the customer and whether they will lead to a competitive advantage. In
relation to the outbound and inbound logistics, the findings have noted the attempts by the firm
to automate and make their systems more efficient using technology. In this context, it translates
to less processing time for customers and less effort. This adds value to their experience which
they may interpret as the business prioritizing them. Customers are more likely to select one
business over the other if they feel prioritized and the services are more convenient (Kumar,
2016). This cumulative experience by the business’s primary activities may differentiate it from
We will now shift focus from the primary activities discussed above to consider the findings of
the VCA on the business’s secondary activities. The findings for the business’s secondary
activities are positive. In terms of infrastructure and information technology, the findings
recommend that the firm considers regularly evaluating the online databases' quality and
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effectiveness as well as train staff, and automate repetitive tasks to free up time for the lawyers.
Similarly, in terms of procurement, the findings of the analysis would recommend that the firm
maintains its cost-cutting activities and assess vendor relationships on a regular basis to ensure
service to be discussed is human resources. The findings indicate that there is a low turnover rate
in the firm. To maintain this positive trend, the firm should continue to invest in employee
Overall, the findings of the support services indicate that the organisation has a substantial
propensity to add value to the customer. The organisation has invested in several value creating
activities such as automation, as well as quality physical infrastructure which enables the
efficiency of tasks which then translates to the minimization of the time spent by the customer
engaging in the service. In addition, prudent financial management by procurement means less
overhead and operational costs. In this context, customers are less likely to bear the additional
cost in their service charges. This adds value to the customer experience (Kumar, 2016).
In sum, the positive aspects of the primary and secondary activities of the law firm cumulatively
add value to the customer. The internal systems are automated to be more efficient which
minimizes the time spent by the customer. In addition, the financial management has been
prudent and this translates to a cost advantage in relation to the customer. These factors are
highly valued by customers and it will give the business its competitive advantage (Ensign,
2001). In the final analysis, the cumulative experience at XYZ Law firm will differentiate it
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Notwithstanding the positive attributes of the firm, the internal audit would advise that the
processing time for cases be revised to reduce the time. In addition, the firm’s technological
infrastructure should be examined on a regular basis to discover any cybersecurity issues which
would impact the customer’s security as well as any potential for optimization and the
incorporation of developing technologies. Finally in relation to human resources, the firm should
Resource-based view.
The success of a legal firm is driven by a combination of material and intangible resources, as
well as its organizational competencies (Sameera, 2018). Tangible resources include physical
assets like office space and technology, whereas intangible resources include reputation, legal
experience, and client relationships (Uyanik, 2023). Organizational competencies, such as legal
research skills and agility, are critical for providing high-quality legal services.
A corporation can obtain a durable competitive advantage by having rare, valuable resources and
capabilities that competitors find difficult to reproduce or imitate (Uyanik, 2023). A resource or
capability that meets all of these requirements is likely to provide a sustainable competitive
In this regard, it is important to determine whether the findings from the RBV analysis indicate
whether the law firm’s resources and capabilities meet the requirements for long term sustainable
competitive advantage (Uyanik, 2023). For instance, the findings of the analysis indicate that in
terms of value, the client-centered approach of offering services in line with the client's goals
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technological programmes to offer distinctive and unique legal solutions and services to its
clients. These actions ensure that clients are satisfied and will feel compelled to offer referrals
In addition to the examples above, the final attribute of value established by the analysis is the
consistent cost-effective operations that facilitate competitive pricing while maintaining profit
margins. In this context, the services of the firm are affordable which is always appealing to
clients. Furthermore, the findings of the analysis determined that the firm demonstrates attributes
of rarity, in that it specializes in niche areas of law as a result of its policy on continuous training.
Moreover, it allows the firm to capitalize on the opportunities where their competitors lack the
niche knowledge. Consequently, they are able to offer distinct legal services or packages that set
Now that we have identified at least two characteristics of sustainable competitive advantage, it
is key to determine whether there are attributes of a third. The findings have demonstrated that
the law firm’s services are difficult to imitate because the services include a combination of
factors of social engineering. The firm consistently invests in their employees as well as fosters a
strong organizational culture which is reflected in the efficient customer service and client
In addition to social engineering, the use of novel legal technology is used to leverage and create
a technological edge, which inherently creates path dependency (Uyanik, 2023) and fosters a
reputation for excellence and integrity of the firm. In sum, this interrelated approach not only
creates a profitable outcome but it also results in casual ambiguity for the firm’s competitors
(Sameera, 2018).
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In addition to the three characteristics identified, we will continue to build on our discussion by
considering the fourth characteristic that is, non-substitutable (Sameera, 2018). The findings
indicate that XYZ Law firm prioritizes building strong client relationships, forming strategic
alliances with complementary service providers, and diversifying practice areas. These strategies
Overall, the findings of the RBV analysis confirm that a XYZ law firm can maintain a
continuous innovation.
In the previous sections of this Chapter, we discussed the findings of the VCA, RCB and the
SWOT analyses. The findings have cumulatively highlighted several positive attributes about the
law firm and several key areas for consideration. In this section as we conclude, we will
synthesize the outcomes of the independent analyses and then conclude by offering
recommendations.
The results of the independent analyses emphasized the significance of a qualified legal team,
ongoing talent development, and financial stability, emphasizing careful management and
resource allocation for long-term growth. Furthermore, the VCA and RBV tools identified the
firm’s, efficiency, lower costs and communication strategies as its competitive advantage. These
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factors are enabled by technological automation, a client centric approach, satisfied employees
However, in addition to the positive attributes the comparative analyses have identified some
diversification of the geographic reach of the firm and the management of the firm’s overhead
costs.
Recommendations
In the previous section we identified some of the key issues that the internal audit discovered in
XYZ law firm. In this section we will build on that discussion and provide some solutions to
To address limited geographical marketing efforts, the firm should consider both
To address issues related to risk management, the firm should consider investing in
training exercises with the employees and invite trained professionals to conduct the
attract competent leaders. In addition, the firm should engage a consultant and the
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The final recommendation to address the issue of high overheads is to consider office
work arrangements.
Each of these solutions has advantages and disadvantages, and before deciding on a course of
action, the organization should carefully assess its specific circumstances and priorities. A mix of
these options could potentially work (Nwachukwu, & Chladkova, 2019).. Long-term success will
require continuous monitoring and evaluation of the chosen solution's influence on overhead
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Conclusion
We conducted an in-depth internal audit of XYZ Law Firm, a legal organization with a long
history and a commitment to providing great legal services. We investigated the firm's strengths,
weaknesses, as well as its key competences and resource distribution across practice areas, using
a combination of strategic management methodologies such as the SWOT analysis, Value Chain
Analysis (VCA), and the Resource-Based Analysis (RBA). Here, we summarize the main
Using the Swot analysis, we discovered that the XYZ Law Firm has strengths such as financial
skilled management team. However, it faces weaknesses like lack of diversity in leadership, a
flat organizational structure, high overhead costs, limited geographic reach, and potential
leadership and communication issues. We then shifted focus and conducted the VCA.
Shifting focus from the SWOT Analysis, we noted that the findings of the Value Chain Analysis
highlighted a competitive advantage as a result of the firm’s ability to minimize the time clients
spend on its services, its unique legal areas which differentiated it from its competitors and a cost
advantage gained from its affordable service. In addition to the VCA, the RBV further
highlighted the firm’s competitive advantage as a result of its maximization of its resources and
capabilities which made the service rare, non-substitutional, valuable and not capable of
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Finally, this internal audit was conducted in a private law firm, future research should examine
the outcomes of an audit on legal services in the public sector (Kamara, (2023): Kalamanova,
2023) to gain a wholistic view of the outcomes of internal auditing in legal offices. Internal
audits are also susceptible to bias and several limitations (Kamara, (2023) : Kalamanova, 2023).
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