Revolutionising the solicitor brand

The recent announcement by the Solicitors Regulation Authority (SRA) that it will relax the grip on the separate business rule has caused another major debate between the traditionalists and the new thinkers.

Emotional comments claiming this will ‘cause irreparable damage’ to the brand of solicitor and ‘drive significant numbers’ out of the profession and 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.

ABS opportunities

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 large and medium-sized 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 alternative business structure (ABS) opportunities for law firms to adapt under this idea. Why not have joint ventures with other parties such as independent financial advisers, estate agents, accountants, and other professional offerings?

Being innovative will be paramount in enabling law firms to survive; understanding their specific clients’ needs 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 – roughly
a third of practices are still partnerships, a third limited liability partnerships, and a
third incorporated limited companies. The solicitor brand would always remain the premium service but a number of jointly owned ABS structures could revolutionise the practice. Capital could be invested from several sources to provide the working capital needed to grow this type of structure.

New corporate structure

Let’s now turn to the other thorny issue facing the profession – an ageing, 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 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 to 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 the 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 brainpower to successfully complete a mundane task.

We know the above applies to most 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 consist of a leaner, fitter profession doing highly skilled work at a premium price in a very different corporate structure. SJ

Viv Williams is CEO of 360 Legal Group