In the wake of our annual Bellwether report launching Paul Caddy considers how independent law firms can change course to become more successful and what lessons can be learnt from looking to the larger firms for ideas.
Have you ever tried to turn a supertanker? It’s not easy.
In fact, it’s so tricky, many tanker owners have to train their captains by making them pilot a tiny replica of a super tanker around a small lake in the Netherlands, while lots of boffins with damp feet and clipboards look on with furrowed brows.
It made me wonder: is there an equivalent training scheme for smaller law firms, with lawyers sat on tiny chairs in front of tiny desks in tiny offices? Perhaps, on occasions, a legal guru is brought in to bombard them with a barrage of pretend management problems (from their tiny replica desk)?
So, in a world where speed is king, how do independent law firms change tack quickly without everything falling overboard?
One solution is to look to ‘Big Law’. The UK is HQ to many of the largest and most successful law firms in the world. Over the years many of these organisations have become adept at manoeuvring themselves effectively through choppy waters despite their super tanker size. There is much that smaller firms can learn from them. If inertia is no excuse for a larger firm, it certainly ought not to be for smaller firms.
The LexisNexis report The Art of Success: Why Independent Law firms are thriving shows why this shouldn’t come as a surprise: 75% of the lawyers in the independent firms that LexisNexis spoke to have worked at larger firms in the past. Those past experiences have clearly shaped their opinions on how to run a smaller firm.
When asked which driver has been the most fundamental in shaping the ethos and practices of their firm, good financial management topped the survey with 73% of those surveyed agreeing that this is vital. A partner I spoke to in a boutique Manchester law firm, who trained in the City, confirmed that the days of promoting people solely on the basis of billings are over and management should get on with just that, management. Ideally they should not be expected to maintain full active practices. As he put it, ‘lawyers should lawyer, managers should manage’.
Non-legal skills are also fundamental in other areas
The report notes that many firms ‘underestimate the importance of marketing’ and the value that can be added to their business by ‘bringing in dedicated professionals with non-legal business skills’. As one respondent notes, ‘marketing is an area that always suffers. It tends to be something people put on the back burner.’ Are small firms missing a trick here? The report thinks that they are.
The report also highlights that the use of technology languishes at the bottom of the list of priorities for smaller firms. According to the report, this suggests lawyers still don’t see how technology can, for example, ‘free up time spent on routine tasks that could be devoted to clients instead’. A surprisingly low 42% of respondents say that a good case management system has been fundamental in shaping the ethos/practices of their business. Pity, as workflow allocation tools, if used well, streamline processes and ultimately increase productivity. US economist Paul Krugman reckoned many years ago that ‘productivity isn’t everything, but in the long run it is almost everything.’ Could the same be said of independent law firms?
And then there’s the firm’s most important asset: its people.
In a world where business can sometimes come across as unnecessarily heartless—in a finger-pointing ‘you’re fired’ sort of way—it is good to see legal businesses defining success by, among other things, endeavouring to treat their staff and clients with respect.
However, nobody ever said that success is easy. There are plenty of challenges ahead for independent firms.
One respondent in the report lamented, “I’m afraid I’ve seen a decline in quality, certainly in the last five years, in small firms – particularly in intellect, ability to think and skill.” Whether he or she is right or wrong in this assertion, no firm can afford to be complacent: firms will need to continue to run hard just to stand still.
The good news is that there will continue to be many lessons that can be learnt from larger law firms. They may be legal super tankers but small firms can still learn much from those further up the chain, tweaking ‘Big Law’ solutions where necessary to better fit their needs.
And at no point will any legal guru be made to sit on a tiny chair…
Paul Caddy qualified as a solicitor in 2000 and has worked for key players in the legal sector: Osborne Clarke, Veale Wasbrough Vizards and Laytons. He has written extensively for LexisNexis and LexisPSL on commercial, IT and information law and also on legal practice generally.