ABS diary | Looking back

It is coming up to the first anniversary of the first Alternative Business Structure licence being granted by the Solicitors Regulation Authority (SRA). As John Welch and Stammers was the first ever ABS, I have been approached by various publications asking for an interview.

I have agreed to do a couple of interviews as I have been approached predominantly by Legal Recruitment Specialists and as a non lawyer manager this interests me. In the past I have looked (purely out of interest) at legal recruitment sites and at the recruitment pages in the Law Society Gazette to see if firms ever advertise for practice managers. I have seen very few positions advertised and the ones I have seen have always been for larger city firms.

With the introduction of Alternative Business Structures smaller firms are now in a position to enrol practice managers, accountants and financial controllers with a view to them joining the partnership. It is hard for a smaller practice to see how they could sustain a practice manager. We are not cheap and although from a management point of view I consider it short sighted not to consider it at all, a lot of firms feel they cannot justify the expense. I still find that solicitors in a small practice feel that if you do not fee earn then you are not earning any money for the firm and for some the idea of having a non-fee earning partner is unthinkable.

I had been the practice manager for John Welch and Stammers for years before I became a partner. I proved the importance of my role to the partners. Over the years the benefit of having someone to purely manage the firm was undeniable. Efficiency and “the bottom line” was greatly improved as was the working ethos and atmosphere within the office. With the pressure of management taken away from the partners they could concentrate wholly on fee earning which in turn improved their fee income generally.

Income generation and management are equally important in any business. There is little point in having income if it is not managed. Today’s law firms have to be efficient to survive. Bottom line is as important as top line, to maintain an efficient practice all parts of the business have to be carefully considered and managed.

A practice cannot run without clients, premises, staff, IT, banks, accountants, stationery, postal services, procedures and so on; the list is never ending. It does not matter how much income is generated if your practice is not managed, in this day and age it will not be sustained.

Although as a manager (and personally it is in my nature to do my job well), I did sometimes resent the fact that I would never fully reap the benefits of my hard work through profit share. Particularly over the last few years during the recession I strongly believe that my role at John Welch and Stammers was a key factor in our survival and success.

I know that I am repeating myself as I have said this in previous articles, but I cannot stress strongly enough that all firms should have a manager that can devote time purely to the day-to-day running of the office. I am stating this from experience as over the last year I have also been involved in a fee earning capacity in the probate department.

Although I have enjoyed fee earning and the experience I have gained, and from a management point of view my first hand interaction with clients has been invaluable, it has been to the detriment of myself and to the managing of the firm as doing both jobs has proved unsustainable because it is impossible to set aside enough time to do both.

I am optimistic that the interest that I have had from recruitment agencies means that legal firms are at last realising the potential of good managers and that at last times are changing. This should also mean that management positions offered by law firms will appeal to “higher calibre” practice managers as future prospects should be more rewarding.