Will every little help?

October 16, 2011

It’s finally here. But how might ‘Tesco Law’ change the way we work?

Photo: Tesco PLC

With the introduction of alternative business structures, the UK legal profession will soon be experimenting with new forms of service delivery. But what about the potentially huge impact ABSs could have on the concept of a legal career?

Among other things, the Legal Services Act means that for the first time in the legal profession’s history, non-lawyers will be able to own and invest in law firms. Many firms are focusing on the increased competition that will arise from the introduction of ABSs.

Some wonder whether companies like Tesco and The Cooperative will start up their own legal divisions. Smaller and mid-tier firms are gearing up to address the challenges of new legal businesses entering their space.

Even the largest UK law firms are beginning to accept they too will be affected, if only indirectly.

Current limitations

The legal profession attracts people for a whole host of reasons, including stimulating intellectual challenge, prestige, impressive financial compensation, and career stability relative to other industry sectors.

But it would be fair to say that most have not traditionally chosen law for its versatility. After all, career development in most firms is about supporting lawyers to achieve one goal: partnership.

Not that there’s anything wrong with the partnership path. There’s a lot to be said for the structured associate development programmes firms have implemented to support their prospective partners. And the rewards of making it are undeniably huge.

But problems may arise in the following instances:

  • Where there are insufficient partnership positions for talented associates coming up through the ranks (an increasing problem with tightening equity structures)
  • Where a talented lawyer needs more job flexibility than allowed for within the demands of a partnership (a particular problem for women juggling their careers and childcare)
  • Where a lawyer doesn’t want to make a long-term commitment to one firm.

In these instances, the change ushered in by ABSs may prove profound. Corporates, for instance, can offer lawyers a different proposition to partnership.

Take a look at the in-house legal department. In recent years, an increasing number of lawyers have shifted from private practice to corporate law departments.

According to The Law Society, nearly 11 per cent of all qualified solicitors now work in Commerce & Industry, an increase of 140 per cent since 2000.

This is for a variety of reasons, but common motives are the opportunity to be at the heart of a business and its strategic decision making, as well as better work/life balance. The salaries on offer are generally lower than in private practice, but there are many other perks on offer including attractive bonuses, car allowances, pension contributions and private medical insurance.

New ways of working

In the future, corporate employment paradigms will combine with existing offerings to give lawyers a much broader career choice. Indeed, so convinced are some firms of the changing market that they have sought to steal a march on the competition and have already launched new business models.

Axiom Law launched back in 2000 to offer an alternative to the traditional law firm model. It recruits and then contracts out lawyers direct to clients – charging far less than City law firms.

So successful has the model proved that it has recently moved into supplying not just individuals but whole legal teams to corporate clients.

The firm’s branding is telling. Visit the website and throughout there are slogans such as ‘law redefined’ and ‘live an original life’. The message is that allowing lawyers to live a ‘balanced life’ isn’t just OK, it’s a competitive advantage.

More recently, Berwin Leighton Paisner (BLP) made a similar move by launching Lawyers on Demand (LOD), which employs quality freelance lawyers to work alongside clients at highly cost-effective rates. Lawyers in both Axiom and LOD not only enjoy new levels of flexibility – largely unheard of in the traditional law firm – but they also receive ongoing training and support from their parent firms.

In January 2011, Radiant Law launched with yet another proposition. The firm has ditched the traditional law firm hierarchy and only employs senior lawyers, outsourcing all the lower-level, process-driven work to legal process outsourcing provider Pangea3 – with the aim of winning clients by significantly cutting the costs of legal service delivery.

Without the support of assistant lawyers, it is unlikely that such a model could work on any large scale. But as a small firm, it has distinct advantages – not just for clients but for the lawyers who will no doubt also benefit from the latitude such a structure allows.

Impact on firms both large and small

Partnership in a traditional law firm will of course still be on the table. But even here, there may have to be some accommodation of changing career expectations among lawyers – propelled by the launch and success of new kinds of law firm.

If City law firms find that the majority of their talented female lawyers are leaving to join firms that can offer greater flexibility, they may well find themselves reforming their partnership models to help retain that talent.

In some of the largest firms this is already happening – and we’ll be looking more closely at this phenomenon in a later article.

The long-anticipated age of the ABS is upon us. And for lawyers looking for greater career choice in the legal profession, it seems that there could be every reason to celebrate. CP

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