Drastic evolution is necessary to survive in the ever-competitive legal market

A few months ago, our firm applied for an alternative business structure (ABS) licence as part of our plan to lead by example in reshaping the way personal injury (PI) law firms operate. That license has now been granted by the Solicitors Regulation Authority.

The pace of change has been rapid in the PI sector. As the number of ABS licences issued has grown, a ban upon the payment of referral fees and the introduction of the Jackson reforms has been closely followed by a complete overhaul of the rules relating to recoverable legal costs.

When setting up SGI Legal in 2012, my view was that successful law firms of the future would be built upon excellent financial planning, robust capitalisation of the business and - above all - the most cutting-edge IT and business processes.

Legal expertise remains crucial to governance and client service. However, the role of the lawyer must change. Clients have not benefited as much as their lawyers have from the traditional way in which legal services have been provided. A system of expert technical lawyers designing and supervising new processes and systems - with results being driven through the better use of technology - allows for efficient value-driven legal services to be provided, without sacrificing quality.

Firms of the future

Like it or not, the economic and regulatory environment, along with the expectations of clients, mean that technology will have a continued and crucial role to play in a successful legal business. Law firms need to review this and consider introducing the following changes, if they have not done so already.?

• Provide experts in sales, rather than the law, as your first contact for clients. This allows for all client matters to be commenced and progressed with single data input and without involvement from the legal team until necessary.

• Implement an automated function for your case management system. This allows for the most standardised aspects of a PI case to be delivered without any form of human involvement.

• Introduce further automation through technology that can automatically read standardised reports, documents, instructions and advice. This leaves the legal team to supervise the process rather than having to undertake the work itself.?

Law firms must structure their cost base and drive efficiency in fee earning to meet the challenges ahead. Partners at law firms, in particular, must review their expectations in terms of profits and be prepared to make substantial investments in their infrastructure, with a view to reducing their cost base in the longer term.

Lawyers will have a continuing important role to play in the delivery of legal services. However, where their expertise is focused will be key to the delivery of cost-effective legal solutions.

The values and ethics of the legal profession should of course underpin a law firm, but that does not mean that law firms cannot embrace new ways of providing client services. Indeed, the ability to stay profitable in PI work will be influenced by the ability of firms to provide non-legal services with those same core principles and values.

An ABS license gives a firm the foundation to do this. However, law firms must also consider how their boards are composed and recognise the value that non-lawyers can add to their development.

It's important to ensure the skills of partners are as diverse as possible. The leaders of the business must be focused upon strategic matters, particularly the retention and improvement of routes to market, the way in which legal and non-legal services are provided and the way in which the team is structured and rewarded.

It will become increasingly difficult for leaders to do this while being 'on the tools'. Our partners manage the business full time, rather than earn fees. Of our close to 60 members of staff, only six are qualified lawyers.

This approach has helped us greatly this year, giving us a chance to plan properly for recent reforms, including an extension of the Ministry of Justice's claims portal just this week. Our IT and financial structures are ready and that is just as important as adapting to the legal changes.

Embracing evolution

Developing a law firm in this way is not so much of a strategic decision as a strategic necessity. The successful law firms of the future will be those that embrace the ongoing evolution of the legal and business world and relish the opportunities that they bring. An acceptance of this process can be the catalyst to superior client service, better profits and a more motivated, focused team.

Law firms that have not yet begun to consider these driving forces should do so without delay in order to ensure that they stand the best possible chance of grasping the opportunities that the years ahead will bring.

Simon Gibson is managing partner at SGI Legal (www.sgilaw.co.uk)