Tag Archives: Legal services Act

Lawyers – Just. Do. Something.

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It seems like there was some sort of psychic alignment in the UK legal blogging community last week.

James took a break from his corporate finance practice and went down to the firm's somewhat impressive atrium to think about what was happening in his market

As the news came rolling in on changes facing the UK market (Neil Rose’s site Legal Futures is often a good place to start), the Entrepreneur Lawyer   Chrissie Lightfoot wrote a great post about the disruption and fear facing the profession. Julian Summerhayes then followed up with a thought provoking piece on the need to avoid apathy in client relationships.

All the time my mind was whirring with two related themes – massive change, and the need to do something.

The first message that I really (really) want to get across is that change in the profession is happening NOW. I mean right now.

Many of the lawyers who are waiting for the full implementation of the Legal Services Act with a “let’s just wait and see” attitude are either deliberately burying their heads in the sand, or are sleepwalking through a time of significant change, leading to both opportunities and threats.

Just look at the recent headlines:

Take a step back and take a fresh look.

This is change that’s happening right now.

It’s not round the corner.

It’s not things that might happen.

It’s happening.

Now.

The other point that’s really important to grasp, is that the change is affecting the whole profession. It’s not just a B2C issue, there is fundamental change going on all through the profession. From the sole practitioner whose livelihood is threatened by consumers being offered quicker, cheaper and easier solutions from competitors that didn’t exist three years ago, to the multi-million pound law firm facing disaggregation of the large scale projects that used to be the foundation of the partner’s seven figure salary. The change is real and far-reaching.

Finally, please trust me when I say that there is much, much more going on which is not public at the moment.

Since I left practice as a lawyer, I’ve been fortunate to be involved in the profession in a number of different roles, including consultant and LPO provider. Some of the conversations I’ve had with law firms, in-house teams and other consultants have shown me that there is some really forward thinking going on in the background, leading to business models being re-engineered and investment being secured.

So why are so many firms not doing anything?

Well, putting aside the difficulty many law firms have with change generally (which I’ve written about before), and some of the negative behaviours driven by the hourly rate billing model,  I think there are a number of other reasons why it’s not top of mind for every law firm partner.

The first is that there are more pressing short term challenges. Cash flow being one of them. The last two to three years (depending on the make up of your practice) has been incredibly tough, and amidst the restructurings and insolvencies, there are plenty of firms that quietly weathered the initial storm but  are finding things getting harder and harder as the road out of recession continues to be a slow one. Whether it’s cash flow, refinancing or opportunities for consolidation, short term survival is often the top priority.

Another reason is that it’s just plain difficult. The market is moving at a tremendous rate now, with new competitors, new technology and regulatory change coming in waves. Just keeping on track of the environment is tough enough, let alone analysing it and working out how to respond. Many firms don’t have strategy experience in-house (and there was a great article this week on how forcing strategy work on non-strategic thinkers doesn’t often work out) and I suspect many just don’t know where to start.

But whatever the reason, now is the time to act. The speed of business these days is too fast to wait and see.

Much has been written about the change in the product development world and the speed to market imperative (“fail fast”) – how it’s no longer realistic to test extensively to get a product perfect before launching.

The parallel I’d draw here is that now is not the time to assess the market to nth degree, and then craft a perfect strategy over the coming months, before pulling together a detailed project plan and implementing through the annual budget cycle. All of these steps may well have merit, but given how fast the market is moving, it’s more than likely that by the time you’re done, you’ll be too late. The opportunities (of which I believe there are many) will have passed, or the threats manifested.

So to wrap up, now’s the time to act. Block out an afternoon and at least do some thinking, or if you’re not at the thinking stage, some sensing to find out what’s happening in your market segments. Then take the lead and turn thinking and dialogue into action.

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Money, money, money; but what would you spend it on?

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Entirely brushing aside any discussion about the consumerism that is rampant in our society, and indeed the inability of material goods to bring lasting happiness, I was recently confronted by the question “what would you like for your birthday?”. Effectively asking me how I would like to invest a small amount of capital to produce a return giving me maximum satisfaction. With the next stage of the implementation of the Legal Services Act here in the UK, some of the more forward-looking firms are asking them a similar question. However, instead of kindly friends and family asking the question, it will be external investors who will be looking for opportunities to find law firms helping them to get a return on their capital.

What would the firm like for its birthday? Socks?

So here’s the interesting question for lawyers in private practice, if you had an investor offering to put some capital in your firm, what could the firm invest that capital in to produce a significant return? What could the firm do that it simply couldn’t fund at the moment? I think this offers a great opportunity to do some really visionary thinking and prompt some challenging internal dialogue. What does the firm require to take it to the next level? Are there new markets you’d like to enter? New services you’d like to launch? What about a significant talent upgrade? Is the IT infrastructure creaking and holding the firm back? Does the brand need an overhaul and that, coupled with an investment in business development, provide an opportunity to really grow the top line? Is there anything that the firm’s clients are beginning to require that the firm can’t deliver (either at all, or cost effectively) at the moment?

Moving on from the basic questions about where the firm would invest these imaginary funds, there are a host of related questions that can deliver insight. What would your competitors do with that sort of capital? What will happen if they secure that type of funding and actually execute some of these types of plans? what type of returns do we think investors will want on their capital? Would we be attractive to external sources of finance, and if not, why not? If we secured finance and wanted to put some of these ideas into practice, could we successfully implement them? Does the partnership have the right mechanisms for deciding how to allocate this type of funding?

It maybe that external funding is not on the radar at the moment, and as such these questions seem irrelevant, but much like scenario planning (a strategic planning technique I’ve mentioned before), exploring a range of possible futures brings fresh insight to the present . If all you’ve invested is the time for a lunchtime discussion, I think that’s a pretty good return, particularly as you might have had some fun in the process.

For anyone interested, the birthday present I requested (but didn’t receive!) was a Black Russian Terrier dog. A little known but totally cool breed!