A brighter future for smaller law firms
The flexibility of the legal consultancy model could offer smaller firms the edge over their rivals, writes Joanne Losty of Excello Law
You will have seen those headlines predicting the death of high street law firms. Following the publication of a Law Society survey conducted in 2020, it was a recurring theme during the pandemic.
The survey revealed that 71% of small and high street firms feared an imminent risk of closure. But a survey conducted during the worst days of the UK’s first lockdown was bound to accentuate people’s worst fears. In fact, the legal sector thrived during the pandemic and most of those firms are still in business.
Of course, they still face a constant set of challenges – not least increasing operational costs, ageing equity partners and the enduring legacy of legal aid cuts introduced by the LASPO Act in 2013, as well as the huge challenge of finding affordable PI insurance at renewal time. But in aggregate terms, the legal sector has continued to grow every year over the past decade.
A 2020 report by TheCityUK found the total legal workforce rose by 9.1% between 2010 and 2019, with two-thirds of the UK’s 350,000 legal professionals working outside London. As evidenced by data from the SRA, most of them continue to work in small or high street firms.
Many consultant legal practices use highly efficient business processes
But, for an increasing number, their working lives have changed irrevocably. One significant development over recent years has been much greater fluidity in where lawyers choose to practise. Alongside the much-heralded growth of in-house legal teams, growing numbers of legal professionals have decided to move away from the bricks and mortar high street model.
Instead, these experienced lawyers now seek greater flexibility in their working lives through an alternative career path. To maintain their viability and client appeal many traditional high street firms are also considering the burgeoning legal consultancy model whereby they retain the people, culture and branding of their practice but work within a larger law firm infrastructure providing back office support services, a regulatory environment and the all-important PI insurance, which many smaller firms have found increasingly expensive to renew.
New ways of working
The undoubted success of remote working during the pandemic demonstrated how receptive companies and clients are to new ways of doing business. You may not be familiar with the myriad technological advances now deployed in the legal sector. The best-known include automated document assembly, auto e-discovery and electronic case filing, which enable service providers of any size to operate effectively from any location.
Many consultant legal practices use highly efficient business processes, which could help your firm to deliver services seamlessly with obvious benefits for your clients. Their nimble approach could enable you to become more proactive in retaining current clients and attracting new ones.
Changes in culture
Our dynamic legal sector is in a state of constant flux. To survive and thrive, you must embrace and exploit new developments so that your firm remains competitive. Without doubt, the intelligent use of technology and automated processes can put you one step ahead. But if your firm still operates under a traditional partnership model, it is more likely to be conservative, reluctant to change and slow in adopting new ideas that could help you stay ahead of the competition.
More can also be achieved by thinking strategically. As a consultant solicitor, you can be more flexible in your approach to business allowing you to make your own decisions. This can include everything from how you handle cases to using innovative technology that matches your needs. Developing your firm through a consultancy model frees you from day-to-day law firm management, allowing for flexibility to become more client-centric, giving you the edge over your rivals.
Our dynamic legal sector is in a state of constant flux
Staff recruitment and retention is a perennial challenge for any successful law firm. Under a traditional partnership model, maintaining a high-quality workforce without sufficient incentives in place can be particularly challenging. In choosing the consultancy model, your lawyers will receive a reward proportionate to their efforts on behalf of clients. Beyond financial remuneration, they will have much greater freedom to determine their own work-life balance, giving them greater autonomy over when and where they work.
Time for a rethink
Manifestly, the traditional law firm model is under threat on all sides, with new business models being introduced and a simultaneous increase in the use of alternative legal service providers (ALSPs). Firms are therefore being forced to rethink their operational model. As competition intensifies, only those with sufficient agility and ingenuity will remain viable over time.
In the brave new world of legal services, your small firm will succeed by being receptive to change and new ways of thinking. Adopting the consultant solicitor approach can give you the freedom to work in a way that best suits you and your clients. Unfettered by the practices and procedures of traditional law firms, you can choose how, where and when you work, adding tangible value to your services and delivering genuine value to every client.
Joanne Losty is a qualified solicitor and the HR and recruitment director at Excello Law, a national commercial law firm based in London