Having just posted a blog on the Legal Services Act 2007 - specifically, the changes that a deregulated legal industry might bring about for our law practices, I remembered that Richard Susskind, at a recent interview which was broadcast at the Computers & Law conference last year, predicted a rosy future for small specialist law firms. In his view clients perceive value in expertise, and are happy to pay for it, but see less benefit in the work done for them at more junior levels which tend to be at expensive hourly charge rates.
If anyone knows the interview I am referring to, or knows more about Richard Susskind’s thoughts on this or, indeed, has their own views on this, I would love to hear your comments.
Azrights is focused on innovation, in that if there is one sector of the legal market I would like to better satisfy it is what Richard Susskind describes as the “latent market”. Finding cost effective solutions appeals because the latent market is by far the largest market, and not one that is overcrowded, in terms of law firms chasing after it.
Reducing reliance on one to one consultancy model.
One very simple way we are reducing reliance on the one to one consultancy model is by developing products. We produced one on SEO recently, and are following with two more next month: one on commissioning a website, and the other on website compliance.
Unlike the businesses selling contract templates we aim to also educate about the surrounding commercial context. So our products give extensive video tutorial explanations about the pitfalls and issues to be aware of before engaging given services. We also provide a general interest explanation about contracts in general, as well as talking about the particular contract template that is the subject of the product. We cover key issues such as how it is not necessary to sign a document to be bound in contract, what happens if you think you are agreeing terms when in law your contract is already formed, the purpose of contracts, when long legalistic contract templates may be appropriate and when they are not, how one sided contracts are based on the assumption that the parties will negotiate the terms, which may be inappropriate for small businesses who expect to just sign the document that is placed before them, etc etc.
Use of multi media
Another way in which we are innovating, is through use of multimedia to service our existing clients. For example, during trade mark registration, we often find that despite explaining legal principles in simple plain English letters, some of our trade mark clients either do not read the letters closely enough, or for some other reason do not grasp key issues about the law and procedure.
When time is money, the need to re-explain points to lots of different people, becomes expensive. But on the other hand, clients who purchase a fixed price trade mark registration service might take a dim view if we were to try charging them for extra time just to have something explained to them so they can provide further instructions, such as about how many classes they will proceed with, for example.
So, for us, it was a logical step to deliver some of our explanations by video and podcast. This works because it takes far less time to produce one podcast or video than to explain something ten, twenty or more times – or worse still, have confused clients who do not really feel they received an adequate explanation.
As people differ, it stands to reason that some will be more receptive to receiving information through the spoken word than through the written form. So, a fairly easy change in fact revolutionises legal services, because it reduces the need for one to one consultancy time, while delivering more value to the client.
I would love to hear what others think about the issues I have raised here, and on my own blog, and how they are responding to the future.
Showing posts with label Legal Practice - IT and Legal Services Act. Show all posts
Showing posts with label Legal Practice - IT and Legal Services Act. Show all posts
Monday, 15 February 2010
Tuesday, 27 October 2009
The future for small practitioners
This morning I held a breakfast meeting for small firms of solicitors to discuss the future under the Legal Services Act 2007, when the rules allowing Alternative Business Structures come into effect in 2011. We had an interesting discussion, and I may post another blog about some of what we discussed, but here I just want to mention the business model of running as a consultant rather than a law firm. This is what is happening in society generally, and is something too few solicitors consider when embarking on life outside large law firms.
It seems to be a clever way of operating as a solo nowadays to set up as a consultant rather than as a sole practice. There is a glut of lawyers, and the danger in setting up a solo practice is that you may find yourself trapped in a situation where you can't close down the firm (unless you're willing to pay 6 times your annual Professional Indemnity insurance by way of run off cover), and yet have to continue unless someone either buys the practice from you, or is willing to take over your liabilities.
Many solo firms lack the business and marketing skills required to create a truly successful business that someone will buy off them. The problem is that they set up their firms for the wrong reasons - redundancy, or for lifestyle reasons, and then find it doesn't provide the income they had hoped for.
If you don't set up your own law firm but instead offer your services on a case by case basis to other law firms (usually the larger ones) at far lower hourly rates than you would need to charge if you had your own law firm, you can still work from home, and get to use your expertise, but you stand to make a lot more money. You make more than you were making as a salaried employee, and much more than many solos make who set up their own firms.
You probably need to 'attach yourself' nominally to one of your client firms, who will put you down on their practising certificate renewal application form, but otherwise you are free to work for a number of different firms, and each assignment you undertake will be covered under the insurance of the client firm.
If you find a prospective client who wants your skills, but perfers to have you contract through a big brand law firm then you can refer the work to one of your bigger law firm clients, (collect a referral fee for this) and do the work at your normal rate. Similarly, if the client wants to pay lower fees you can refer the matter to a smaller client firm, again collect a referral fee, and do the work charging your normal rate. The client gets the same expert either way but gets to choose whether to use a large branded law firm or a smaller, cheaper one. You have none of the headaches about professional indemnity insurance. Your hourly rate is low enough to be affordable by either large law firms or smaller ones.
The wrong choice of business model underlies many of the problems solos face. Increasingly as it becomes more and more expensive to operate as a solicitor because of the regulatory overheads being piled up on law firms, why would anyone starting out want to burden themselves with a law firm? If you are a patent attorney, then it's easy enough for you to continue to practice. But for solicitors who don't want to or have nothing to offer if they drop their solicitor title, the solution is to set up as a consultant.
The time for running a lifeystyle law practice is coming to an end. Unless you've got a unique business proposition to offer clients don't set up your own law firm. The promise of lower fees and a more personal service, which you may or may not be able to deliver on, is increasingly not enough of a differentiating factor to win business for a solo practice.
It seems to be a clever way of operating as a solo nowadays to set up as a consultant rather than as a sole practice. There is a glut of lawyers, and the danger in setting up a solo practice is that you may find yourself trapped in a situation where you can't close down the firm (unless you're willing to pay 6 times your annual Professional Indemnity insurance by way of run off cover), and yet have to continue unless someone either buys the practice from you, or is willing to take over your liabilities.
Many solo firms lack the business and marketing skills required to create a truly successful business that someone will buy off them. The problem is that they set up their firms for the wrong reasons - redundancy, or for lifestyle reasons, and then find it doesn't provide the income they had hoped for.
If you don't set up your own law firm but instead offer your services on a case by case basis to other law firms (usually the larger ones) at far lower hourly rates than you would need to charge if you had your own law firm, you can still work from home, and get to use your expertise, but you stand to make a lot more money. You make more than you were making as a salaried employee, and much more than many solos make who set up their own firms.
You probably need to 'attach yourself' nominally to one of your client firms, who will put you down on their practising certificate renewal application form, but otherwise you are free to work for a number of different firms, and each assignment you undertake will be covered under the insurance of the client firm.
If you find a prospective client who wants your skills, but perfers to have you contract through a big brand law firm then you can refer the work to one of your bigger law firm clients, (collect a referral fee for this) and do the work at your normal rate. Similarly, if the client wants to pay lower fees you can refer the matter to a smaller client firm, again collect a referral fee, and do the work charging your normal rate. The client gets the same expert either way but gets to choose whether to use a large branded law firm or a smaller, cheaper one. You have none of the headaches about professional indemnity insurance. Your hourly rate is low enough to be affordable by either large law firms or smaller ones.
The wrong choice of business model underlies many of the problems solos face. Increasingly as it becomes more and more expensive to operate as a solicitor because of the regulatory overheads being piled up on law firms, why would anyone starting out want to burden themselves with a law firm? If you are a patent attorney, then it's easy enough for you to continue to practice. But for solicitors who don't want to or have nothing to offer if they drop their solicitor title, the solution is to set up as a consultant.
The time for running a lifeystyle law practice is coming to an end. Unless you've got a unique business proposition to offer clients don't set up your own law firm. The promise of lower fees and a more personal service, which you may or may not be able to deliver on, is increasingly not enough of a differentiating factor to win business for a solo practice.
Thursday, 20 March 2008
Legal profession on brink of fundamental transformation
There is no doubt we are on the brink of huge change in the legal profession. It is not just the Legal Services Act that makes me think we face massive change. The original seed was planted in my mind by Richard Susskind’s book ‘The Future of the Law’ – a book I found unputdownable when I first read it in 1996. He predicted things like the tremendous future importance of e-mail which was then an emerging technology introduced to us during the IT module of the LLM studies I was doing at QMW. The JANET system had been mentioned, and I was all fired up about e-mail’s likely future role in society. So, when I started work at Eversheds I suggested we include a provision in the standard boilerplate clauses about notice sent by e-email, which the partner in question rejected out of hand, no doubt writing me off as having little grasp of security or confidentiality issues.
Naturally I am always interested to read other books by Richard Susskind, and will be buying 'The End of Lawyers?' when it is published later this year. I have read the series of 6 articles he has written about the book for Times Online here In these he develops his theme of standardisation and commoditisation, and expresses the view that what lawyers currently do can be undertaken more quickly, more conveniently and less expensively, and in a less forbidding way, by systems than by conventional work. He mentions document assembly, personalised alerting, online dispute resolution, and open-sourcing as examples of “disruptive legal technologies” in that they do not support or complement current legal practices, but challenge and replace them.
Another theme he picks up is that of the Legal Services Act provisions which will allow non-lawyers to invest in law firms. Such investors are not going to be committed to the ways of the past. They are likely to be introducing call centres, outsourcing to India, online legal services, the automatic generation of documents, and more. The delivery of legal services will be a very different business when financed and managed by these non-lawyers. It is improbable that investors would choose to put cash into the traditional business model of most law firms – hourly billing, expensive premises, pyramidic organisational structures, and the rest.
His conclusion is that the market is increasingly unlikely to tolerate expensive lawyers for tasks (guiding, advising, drafting, researching, problem-solving and more) that can equally or better be discharged, directly or indirectly, by smart systems and processes. It follows that the jobs of many traditional lawyers will be substantially eroded and often eliminated. At the same time, he foresees new law jobs emerging which may be highly rewarding, even if very different from those of today. Any views on these thoughts anyone?
Naturally I am always interested to read other books by Richard Susskind, and will be buying 'The End of Lawyers?' when it is published later this year. I have read the series of 6 articles he has written about the book for Times Online here In these he develops his theme of standardisation and commoditisation, and expresses the view that what lawyers currently do can be undertaken more quickly, more conveniently and less expensively, and in a less forbidding way, by systems than by conventional work. He mentions document assembly, personalised alerting, online dispute resolution, and open-sourcing as examples of “disruptive legal technologies” in that they do not support or complement current legal practices, but challenge and replace them.
Another theme he picks up is that of the Legal Services Act provisions which will allow non-lawyers to invest in law firms. Such investors are not going to be committed to the ways of the past. They are likely to be introducing call centres, outsourcing to India, online legal services, the automatic generation of documents, and more. The delivery of legal services will be a very different business when financed and managed by these non-lawyers. It is improbable that investors would choose to put cash into the traditional business model of most law firms – hourly billing, expensive premises, pyramidic organisational structures, and the rest.
His conclusion is that the market is increasingly unlikely to tolerate expensive lawyers for tasks (guiding, advising, drafting, researching, problem-solving and more) that can equally or better be discharged, directly or indirectly, by smart systems and processes. It follows that the jobs of many traditional lawyers will be substantially eroded and often eliminated. At the same time, he foresees new law jobs emerging which may be highly rewarding, even if very different from those of today. Any views on these thoughts anyone?
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