Tag Archives: law firms

The Partnership Problem

I thought I would re-post this after reading “The Last Days of Big Law” in New Republic

It has long been apparent to anyone with an ounce of business sense that, by and large, partnerships are not the best way to run a company.  There are, naturally, exceptions and I am not going to take issue with the profitability of the ‘magic circle’ firms that would be eligible for inclusion in the FTSE100 were they to have publicly traded shares.  They have all said, however, they would not seek to float.  There are probably many reasons for this, most of which I couldn’t hope to understand.  But I bet one of them is because the partners of those firms rather like being partners in those firms.

The disappointing level of social mobility in the legal sector, particularly acute I would imagine in the largest firms, isn’t entirely down to the bias towards recruiting trainees who attended private schools and who could get work experience via their parents.  No, I am quite sure that the partnership model itself is the source for many of the legal sector’s woes.

When you think about it, it’s a pretty crazy idea really.  For a start, partnerships hardly encourage decisiveness.  Having worked in a law firm, I can attest that getting anything done was a bit like herding cats (and I make no apologies for linking to this YouTube video again because it makes me laugh).  Trying to get everyone to agree is a slow and painful process for which you don’t get much in the way of thanks.  Not really the environment for making cutting edge, dynamic business decisions.

Equally as problematic is the route to becoming a partner.  To reach these hallowed heights, young lawyers have to toil away, often for long hours, somehow meeting very high standards while doing mostly mundane tasks for however long it takes until they are given the nod.  It’s hardly surprising then that the average age of an equity partner (the ‘owners’ of a law firm) is now 60.  With one eye on securing their safe passage to retirement, these people are, naturally risk averse, and, if my experience is anything to go by, some of the most conservative and change-resistant people on the planet.

By promising jam tomorrow, law firms attempt to elicit unwavering devotion from their junior lawyers.  Aside from being, in many cases, an empty promise (as the Red Queens says: ‘The rule is, jam tomorrow and jam yesterday, but never jam today’) this is no way to promote the innovation and entrepreneurship that enables a company to leapfrog its competitors.  The short termism partnership encourages also gives rise to the ever-present danger, as Labour politician Tony Benn put it, that ‘some of the jam we thought was for tomorrow, we’ve already eaten’.

While I am yet to work in any organisation, legal or otherwise, that doesn’t struggle with a silo mentality at least some of the time, I am quite convinced that partnership exacerbates these tendencies.  Lawyers feel compelled to protect their territories and keep their contacts to themselves; knowledge is, after all, power.  And so you can end up with the absurd situation of grown, mostly men, bickering over issues like children.

The model is just as useless when it comes to ensuring an equal gender balance at the top of the profession.  While women make up 60% of the trainee intake at the big city law firms only about 18% of their partners are female.  Given the track record of the city more generally in getting women into the boardroom, it may be unfair to lay this charge entirely at the partnership door.  However, the collegiate nature of running a business is a rather effective way of excluding women.

Social events geared towards traditionally male pastimes, like golf, are a very subtle, even unconscious, way of demoralising any woman who might harbour ambitions of partnership.  The firm I worked for did not, of course, exclude women deliberately, but every corporate jolly, sorry networking opportunity, that came up, bar awards dinners, involved football, cricket or golf.  I know plenty of women who might enjoy these activities, but not necessarily if they have to go along with a lot of testosterone-charged males.

The problem is that firms can, and do, talk the talk when it comes to promoting diversity but many at the top still secretly believe, even if they won’t admit it, that to get the rewards you have to put the hours in and play the game.  Not to do so amounts to ‘career suicide’.  Which probably explains why efforts to grow the numbers of female equity partners at the UK’s largest firms are failing.

Just as damning, as I have written before, venerating partnership above all else also consigns many in the firm to a ‘citizenship’ that is distinctly second class.  Whatever the rights and wrongs of such a system in the past, it is patently a stupid way to run a modern company.  I can’t see any circumstance in which effectively disenfranchising whole swathes of your staff makes business sense.

And law firms need those other people.  While there are clearly some lawyers who have the skills to become business leaders, it is a fallacy of the partnership model that just because you’re a good lawyer you can lead a law firm.  Those that think they can prove me wrong, well you’ve been doing it in the good times, that was easy.  Surviving in a harsh economic climate is going to require real management and leadership talent.

So thank god the legal profession, and with it the partnership model, is being well and truly shaken up.  Already law firms at the high street end of the market are beginning the feel the effects.  What is extraordinary, given the overwhelming unsuitability of the partnership model for anything other than self-preservation, is that the top city firms still seem to think the shake up has nothing to do with them.  They should remember no firm is too big to fail.

Originally posted on the Quality Solicitors blog in February 2012

To infinity and beyond: Google law prepares for blast off

Several years ago, when I was campaigning to bring about the Legal Services Act, some bright spark at Which? suggested to me that it wasn’t Tesco law that would bring about a revolution in legal services, but Google Law.  I wouldn’t say I dismissed his prediction out of hand, but at the time it was quite a big leap to see how you could buy legal services in Tesco, never mind from Google.  Well, last week this colleague’s prediction turned out to be right as the Google-backed Rocket Lawyer announced its intention to launch in the UK in 2012.  It’s a measure of how far we’ve come that the news caused merely a ripple, rather than the tsunami we would have surely had in the past.

It is a strange coincidence that this was the same week in which the Law Society launched its annual ‘solicitors are great’ campaign.  As you can imagine, I’m a bit of a sceptic when it comes to this sort of thing, but to be fair, the Society’s efforts have improved immeasurably since the toe-curling ‘my hero, my solicitor’ of a few year’s back.  This year’s effort, a slightly more modest call to ‘choose quality advice’, will be seen, the Society says, more than 450 million times, which is about eight times for every man, woman and child in the country (although as lots are too young to read that’s even more times for the rest of us).  I have no idea how they work this out, but it sounds pretty impressive.

I also have no idea if these annual forays into mainstream advertising are beneficial to high-street law firms.  The Society claims that last year’s campaign generated 85,000 click-throughs to their website and a 40% increase in searches on its ‘Find a Solicitor’ database.  On the face of it, this is quite a result, but I’ve had a look at Find a Solicitor and it’s little better than the Yellow Pages (if you’re old enough to know what that is..).  Without customer feedback or complaints information, getting a long list of solicitors is next to useless (for more on my views about this, see my blog about the Solicitors from Hell website here).

Which is where Rocket Lawyer comes in. I’ve had a look at their website and even registered on it (I pretended to live in Arizona so I could imagine I was sitting by the pool in the sun rather than snuggled up in my loft room as the rain beats down on the skylights).  Generally I don’t like making such an overt plug, but I love it.

It’s exactly what an online legal service should be – it’s clear and easy to navigate, it has bucket-loads of information and, on the whole, seems to be written in comprehensible English (which is quite a feat given, at the moment, it’s just an American site).  There’s even a nifty little section with tips on working with a lawyer (I would make this available as a checklist to take to the solicitor’s office – that would put the wind up them).

I am particularly excited (yes, genuinely) by the ‘legal health check’ as this taps into what, à la Richard Susskind, I have been banging on about for ages:  the latent demand for legal services.  As reported on Legal Futures last week, founder Charley Moore argued that services such as Rocket Lawyer expand the market for legal services, rather than compete with lawyers, by making them more accessible, citing as an example that, as in the UK, less than half Americans have a will.

This latent demand is something traditional lawyers, on the whole, have failed to address.  This is partly because individuals might not think they have a legal problem:   research published last year by the Legal Services Research Centre found such issues included faulty goods and services, noisy neighbours, benefits, children’s education and homelessness.   But it is also because your average high-street solicitor doesn’t take a ‘holistic’ approach to the law.

This is where Rocket Lawyer really comes into its own.  When you register, it asks about your lifestyle – work, home and family – and makes recommendations for legal services based on your answers.  Alternative business structures, and the multi-disciplinary partnerships they will enable, are all about this ‘lifestyle’ approach, enabling consumers to purchase packages of legal services at certain points in their life – getting married, buying a house, having children, retiring etc.  This not only makes more sense for the consumer but taps into that lucrative ‘latent demand’. This is surely how legal services should be delivered in future, whether online or by more traditional means

So back to that advertising campaign.  The problem is that it fails to acknowledge any of these developments.  It may well encourage someone already looking for a solicitor to go to the Society’s website and use Find a Solicitor.  But it is still harping back to the ‘good old days’, when solicitors were learned men in stripy suits and bowler hats sitting behind mounds of dusty books.  What we are approaching now is beyond Tesco law and buying legal services like a tin of beans.  Whether the Law Society and the firms it represents like it or not, we are approaching the age of Google Law and nothing will ever be the same again.