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.

You Will Be Assimilated

KPMG has launched a funded programme that will support talented school leavers through a degree at Durham University and then into qualification as a baby chartered accountants.  These undergraduates are to divide their time between university and KPMG’s practice.  KPMG says it wants these school leaver schemes to provide the majority of its annual trainee recruitment.  Catrin Griffiths, editor of The Lawyer magazine, argues this week that law firms should be doing the same.  I think she’s bonkers.  Here’s why.

Who the hell knows what they want to do at 18?  All I was interested in was beer, Van Halen (it was 1987, I’m much cooler now, 20 years too late) and Norwich City Football Club.  In fact, when I left university, the only thing I knew for certain was that I didn’t want to be a lawyer.  Indeed, my university career constituted a record of galactic underachievement.  At the end of the first term of the second year, Prof Phil Williams, who was in many ways my mentor, left the university to take up the Chair of Politics at Chicago University.  Before he departed, he told me that he would be looking for my name on the list of those achieving first class honours.  “Right,” thought I, “I can spend the next 18 months living it up, in the process generally avoiding work wherever possible and still come out with a 2(1).”  Which I did, and ended up with a 2(ii).  Cue stock market crash, general global recession and no job.  Welcome to the real world, 1991

Of course, my indecision might also have had something to do with the fact that I came from a family of lawyers.  My father was a partner in a mid-sized law firm and went on to be a barrister.  My maternal grandfather was a High Court judge and was the Chief Justice of The Bahamas (where I was born).  My baby brother became a barrister.  I even married a barrister.  In fact, when I’m presenting, I sometimes introduce myself, being the only solicitor in the family, as – get this – the white sheep of the family.  Oh, I crack myself up.

Of course, everyone knows somebody that is the exception to the rule.  My wife watched an episode of Crown Court when she was 10 and from that moment she only ever wanted to be a barrister.  In fact, sometimes I think she’s only really happy when destroying witnesses in cross-examination or waxing lyrical to a jury.  She’s now one of the pre-eminent practitioners in her field in the region and was appointed two years ago as a Recorder.  To you non-lawyers, that’s a part-time Crown Court judge, not a beginner’s woodwind instrument, which would, of course, be ridiculous.

But as a rule of thumb, when an A-level studying work experience person (a “WEP”, as we like to call them) tells me that they want to be a solicitor more than anything else in the world, I give them the bent eye.  “Really?” I quip.  “When I was your age, I still wanted to be an astronaut”.  In fact, I never wanted to be an astronaut.  I’m terrified of heights.

I have found, in delivering seminars and such like at universities across the north of England, that by and large, trying to do anything useful with undergraduates is a waste of time and valuable one-liners.  The lecture hall is divided between dozing largely British undergraduates playing hangman on their iBerrys, and attentive largely Asian students sat across the front rows respectfully tapping every word I utter into their laptops.  Neither group interjects with anything useful.  The odd snore or snigger from the back is especially unhelpful.  I’m not sure whether either group comes out of the session particularly advantaged.

But would I want to change their attitudes?  No.  Because life is about a gradual dawning of opportunity and motivation.  And when you’re 18, you need to give that process time.  Being forced, whether by ambitious parents, short sighted careers advisers or pressure from an international financial megalith into a lifetime vocational commitment is a short cut to a mid-life crisis.

When making choices about recruitment, I will take the candidate with real world diverse experience over the tunnel vision squint of the person that went straight from school to university to work.   Subsidising school leavers through university, post-graduate qualification and training may work for KPMG, but accountancy is about numbers.  Law is about people.