Emotional comments such as “cause irreparable damage” to the brand of Solicitor and “drive significant numbers” out of the profession into the unregulated sector are not helpful in the new legal environment in which we are operating.
We just have to face reality. Much of the work traditionally delivered by solicitors will no longer be sustainable or profitable in the future. Therefore we can either bury our heads and hope this will all go away or take advantage of what this new opportunity offers.
The Solicitor brand should represent a value priced service, delivered by experienced professionals at a premium therefore retaining all the reserved activities and providing the premium service for high net worth individuals and mid-sized and large corporate entities.
How can we expect to compete with the new entrants with private equity backing who are geared to drive volumes through their organisations with processes and workflows that drive the costs out of their business? Any legal service that can be commoditised is under attack – how can independent firms realistically compete in this market? Surely we have to accept that in time most of these activities will no longer be in the control of the Solicitor brand?
So how can we turn the separate business rule to our advantage? Why shouldn’t a law firm retain its reserved activities and premium work in the “solicitor” brand yet own a number of separate businesses providing value added services to their clients? There could be a number of ABS opportunities for law firms to adapt under this idea. Why not have JVs with other parties such as IFAs; estate agents; accountants and other professional offerings? Being innovative will be paramount in how law firms survive, understanding their specific clients’ needs by asking them and devising new solutions to meet those needs will be a prerequisite.
The structure of law firms has changed significantly and will doubtlessly change even more in the coming years – we now have roughly a third of practices still partnerships with a third LLPs and a third incorporated limited companies. The Solicitor brand would always remain the premium service but a number of ABS structures jointly owned could revolutionise the practice. Capital could be invested from several sources to provide the working capital needed to grow this type of structure.
Let’s now turn to the other thorny issue facing the profession – an aging male dominated model with no succession or exit planning. A lack of innovation and being too reliant on the past is holding back the evolvement of legal services.
I personally love the tradition of law firms where the meeting room is full of volumes of leather bound books dating back hundreds of years but is this the world that the new clients want? There are firms that still do not use a computer and rely on their accountants to provide management information with their annual accounts each year – fortunately these are few and far between but we don’t have to travel too far back in time when this was the norm. My point is that we have to evolve; our clients, if we bother to listen to them, are demanding a change in traditional thinking. They expect services instantly; yes they want to purchase the knowledge and experience that you have and they will pay a premium for it but in a manner that they want.
Many individual lawyers that I meet have brains the size of planets but we cannot expect the vast majority of clients to pay a premium for a service that could be delivered by someone who operates within a workflow and doesn’t need that brain power to successfully complete a mundane task.
We know the above applies to the vast majority of legal work and therefore being innovative and accepting that these changes are inevitable will sort the men from the boys.
However, I do not believe this is the end of lawyers, in fact quite the contrary, but those firms that fail to adapt to market demands and are not prepared to change the way they think about the business of law will simply not survive.
There will always be demand for the independent law firm and the future will comprise of a leaner fitter profession doing highly skilled work at a premium price in a very different corporate structure.
CEO, 360 Legal Group