Sunday 31 August 2008

Further thoughts

I was encouraged to see some interest in the topic of my post ‘Food for thought’ in the form of two anonymous comments and a few emails from people, the majority of whom were not looking to join my proposed network – indeed could not qualify given that they were neither UK solicitors nor UK based. But people did raise interesting points which I would like to answer in this post.

One theme that emerged from comments was how much some solos value the solo life with its absence of hassles of managing staff, having to recruit, run offices etc etc. Life is so much simpler just working solo, and the regulatory burdens are not too onerous for many in other jurisdictions. This may possibly be because they don’t operate the equivalent of our client accounts. Without doubt in most jurisdictions operating a client account is what brings into play the full weight of the regulatory burdens. Many also feel that their clients receive a better service from them than from large law firms.

I have to say immediately, that facilitating for solos the sort of lifestyle they currently enjoy and want to maintain is precisely what I’m trying to offer them the chance to continue in the future when it may be less possible to practice as solos – at least in the UK as solicitors. They could do so by joining the Azrights network and working from home.
As to the threats on the horizon that is potentially going to endanger the lifestyle of true solos See for example comments in the Law Society’s Gazette in the July 2008 supplement on Professional Indemnity Insurance (which unfortunately is not available online for me to link to), by Simon Young, a practice management consultant and Law Society Council member who

“predicts that increasing compliance demands are likely to give further impetus to the wave of mergers among smaller firms. He draws a parallel with sole practitioner independent financial advisers (IFAs), who struggled to cope with compliance issues on their own when the amount of regulation affecting their practices grew exponentially. IFAs were either forced to merge, outsource compliance at great cost or be roped in as tied agents…. There are now very few one-man-band IFAs. Compliance for the legal profession is undoubtedly a resources issue and I am afraid it militates against small businesses and sole practitioners in particular"..

By trying to find a way for solo lawyers to exist in peace in future as practising solicitor solos, I am hoping to find a solution that produces a WIN WIN outcome for everyone. Anyone who can see the writing on the wall – namely, that the growing regulatory burdens in the UK are going to increase the costs of operating a law firm, and so make it unviable for solo firms to operate as sole practices in future, will want to look around for possible solutions. The one I mentioned of joining Azrights network is one such possibility. Doubtless there are others. However, burying ones head in the sand is not a sensible option.

In view of the incredulity from some people showed as to whether the Inland Revenue would accept that solicitors operating in this way could be self employed, rather then deemed employees, I can confidently say 'yes' because the model is not a new one. There are many law firms operating this way, and indeed IFAs too. So at the time of writing the Inland Revenue does not have a problem accepting this way of working in the legal profession as anything but self employment. For further information about this and how the lifestyle works, here are some articles relating to a law firm in the UK – Keystone Ltd - here and here

They are by no means the first or only such business, as there have been others before them, such as Woolley & Co who were one of the first virtual law firms.
My hope is to do something interesting using this model for growing an IP and Technology law practice. It remains to be seen whether there will be sufficient interest from small IP practices in the next few years to make it happen. Watch this space as they say!

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