The Lawyer Vs. The Law Firm – a response

I read a post published recently by Canadian legal sector consultant Jordan Furlong.  To say that it resonated was something of an understatement.  But I didn’t agree with all of his conclusions.  You can read his post here and this was my response.

Jordan, your article is a clarion call that strategists in commercial law firms around the world should heed or face extinction.  And of course, for that reason I expect little change in 2013, meaning by 2014, the traditional law firm is no more than a plump turkey waiting to be pulled apart by more astute commercial players.

Why is this?  Because traditionally law firms reward big billers and rain makers with promotion to management status, whereas those actually skilled in longer term business development and strategy are overlooked.  Lawyers are inherently self-interested and are forced to work together out of need and those at the top of the trees all to often are arrogant and unwilling to consider that there may be any other path.

But here’s the thing.  Whilst it may be that big enterprise likes to align itself with one firm or another, ultimately law is a relationship business.  When you look across the UK legal scene (which is where I work), you see a vast array of firms and to the business owner or manager, almost every single one of them is seen as a substitute for another.  Which firms could be excepted from that analysis. Pannone perhaps, or maybe Slaughter & May.  I can’t think of any others that have their own distinct personality.

In my father’s day, the lawyer was at the heart of the client relationship.  Networks were personal.  Not because they were jealously guarded, but because professionals in market towns naturally grouped themselves into non-competitive alignments with fellows who thought like they did.  But this changed in the 80s when English firms were allowed to start marketing themselves.  As a result, the idea of a central law firm identity, a brand, started to take priority over the individual lawyers.  But of course lawyers didn’t know what a brand was – and many, most perhaps, still don’t.

The attitude of the individual lawyer towards cross-selling is guarded not merely because of his or her doubts over the quality of service that might be provided by a colleague of which s/he knows little.  The lawyer protects his or her contacts because of the very pressure s/he faces to cross-sell.  I can’t count the number of times at the larger provincial practices for whom I worked when, faced with a client need out of the ordinary, I would approach a dept head or team leader for permission to refer said client out to a specialist I had found at another firm only to be told “Jenkins does that sort of thing, or something similar or he’ll work it out”.  Why? Because equity partners are not motivated by long term gain through first class customer service.  They are motivated by the scale of their drawings, which themselves depend upon the revenue generated within the tax year.

When I decided to set my firm up in 2011, I decided to do everything, EVERYTHING, different.  Why fight our client’s desire to bond with their adviser?  Why not to sell ourselves through our support of that relationship?  For our consultants, why try to restrict what they do with their contacts and clients? Why impose covenants on them? Why force them to cross-sell.  Instead, new would-be consultants are told that should they wish to leave, not only will they not be restricted, they are positively encouraged and will leave us with our blessing.  If they wish to refer their clients to advisers outside the firm, that is absolutely their decision.

We do this because when we set the firm up, we decided first to build a brand (not an identity, an actual brand) and then see where we went from there.  So we created a values document that all of our advisers must not only sign up to, but must make sing out through their work.  And that values document is provided to all of our clients so that they can hold us to account.  So we can be confident in the absence of controls over our people, because they wouldn’t be with us in the first place if they weren’t the RIGHT KIND of people.  And so we don’t push our brand on the clients of our lawyers.  And it’s by operating this way that our clients love us so much.

Which brings us back to where you started, and the idea of the growth-by-merger fallacy.  When two large firms combine, what analysis is made as to the qualities of the lawyers at the coalface?  Practically none.  Or if there is, it’s merely about their ability to bill as opposed to their ability to build a long term relationship with their clients through which those clients might place total trust in the fidelity of their lawyer.  Because a merger between two firms is not about the building of economies of scale, it’s about the building of megaliths that massage the egos and satisfy the avarice of their equity partners.

Thus far, the focus in England post-Legal Services Act has been on the destruction that is to be reaped upon the High Street sector by the likes of the supermarkets and other large consumer brands.  But there is a tsunami that is going to overwhelm the commercial side also before long.  Insurers, business consultants, accountants, unions even, are all bigger than us and better resourced and much more astute in a commercial sense.

The future for quality legal resource is, as you mention, niche.

Born To Do It

Yesterday, the Queen attended a meeting of the Cabinet. “Her cabinet”, as fawning royal reporters described it repeatedly. “It’s her cabinet, so she can attend when she wants” said Eric Pickles, a frequently outspoken cabinet minister.  What he lacks in hair he certainly makes up for in quotability.

There was a lively discussion on yesterday’s Today Programme about how the Queen, in her diamond jubilee year, is considerably more popular than a Government (“her Government”, fawn fawn, grovel, grovel) that, for once, a majority of the population actually voted for.

Why is this? Because she doesn’t actually participate in any of the political action was the suggestion. Not something one could say of the last monarch to attend a cabinet meeting, George III. He attended in 1781 (although there is some debate around whether Victoria did likewise) during the American Revolution. An interesting comparison, since George was known for his meddling in the running of the country. Sorry, “his country”. And provoking the colonials into revolution was one of his less celebrated achievements. All part of his attempt to turn the clock back to a past era of despotism unbounded.

George III was not one of England’s more popular monarchs. He ended his days talking to trees in Windsor Great Park, supposedly. Perhaps they were better conversationalists than some of his cabinet.

So an 18th century figurehead who likes to interfere with the government of the country and is resented for it. A 21st century figurehead who is welcomed to attend cabinet as part of the celebration of her ability to retain a pulse since 1952 – invited precisely because she does not interfere. Am I the only one to see the irony here.

It won’t have escaped those that know me that I am not a supporter of the Royals, nor have I been for my entire adult life. I am that rare thing, a true English republican. Not a communist nor a socialist nor a nationalist. Just someone who believes that life in the 21st century doesn’t sit well with the imposition of a birthright hegemony. And yes, the recent decision to give the unborn child of William and Kate an equal right to accede to the throne, boy or girl, or even (shock horror) should she marry a Catholic (what would happen if she chose to be a Catholic, I wonder?) makes no difference whatsoever.  (It’s something you might like to bear in mind when you read the post I’ll write at some point in 2013 in support of Scottish independence.)

If the Queen doesn’t take an active role in the constitution, what exactly is she for? And at this point in our lives, do we really need someone to sit at the top of the Government just because she was born to do the job? It just makes me think, how can we sit here in our advanced western liberal democracy and deride African dictatorships, middle eastern juntas and the like whilst turning out in our thousands to wave our flags in celebration of a woman whose entitlement to her job is that she is the great great granddaughter of someone who was a cousin to someone who had been dispatched some time before. Or something. Surely it’s time that this job was also appointed on merits basis, subject to our equality legislation, just like every other job in the country?  Pretty much every other job in the country, at least.

But in case, dear readers, you’re concerned that *particular is a nest of vipers waiting to strike down your comfortable bourgeois life, calm your gentle British hearts.  Everything here is in balance.  Much as I would favour the idea of a Boris presidency over the status quo, @particular_deb (my business partner) is as fervently royalist as am I republican.  Indeed, not only does she lead the street party committee and keep the bunting suppliers of northern England in business, would her ultimate ambitions be realised we would all one day be subjects of Queen Deborah.

Now there’s a thought.

“We’re Putting Our Prices Up In 2013”

I had a letter from E.ON this morning.  I opened it thinking it might be a bill.  Instead, it was a letter with the heading “We’re putting our prices up in 2013”.  That’s quite an opening gambit.

I was, as it happens, quite impressed with this, so I thought I’d give it a read.  In the second paragraph (which carried the sub-title “A change to the way we charge you”), this wording caught my eye:

“We’re also charging the way we charge you and introducing a standing charge.  This means you’ll pay a fixed amount for your connection, plus an amount for the power you actually use.  So it will be easier to see what your energy bill covers.”

Easier.  Yes, it will be much easier.  After all, when the utility companies all got rid of standing charges a few years ago, it was to make our bills more difficult to understand.  No wait, that’s not right.

Leaving aside the pressure on the utility companies to come up with some kind of vague pretence at competition, it seems to me that taking the decision to clutter the minds of your consumers by introducing a fixed charge element is a step so totally contrary to the current tide towards simplicity that frankly it can only be applauded.

In the way you might applaud when you see the fate of the tennis streaker.

Still, at least they’re being transparent.  That’s got to count for something.