Working with Entrepreneurial Lawyers

The new era of competition will define the future of many firms: We now have accountants offering probate. Financial Planners employing solicitors and purchasing law firms, and a significant investment from private equity into processed legal services. Will there always be a place for the well run, local Solicitors practices that genuinely provides world class service to their clients?  The services these firms offer will have to compete with the new entrants and without significant investment they will not win in any price war.

The really progressive independent firms are investing heavily into new skills. Creating business development teams and initial call handling teams are just some of the ways firms are adapting. The cost of acquiring a new instruction is high and once that potential client telephones or visits your office then a specialist should be dealing with their enquiry – it should not be left to a receptionist to give out a price! How many times will the telephone ring with an enquiry about the cost of a service and unless the customers are able to compare services with your competitors then your conversion rate will be unacceptable. Every firm should have its own USP (unique selling points) and a system of ensuring these are delivered for every new enquiry.

The need for sales training and sales professionals is an essential ingredient for any successful practice; if the people within the firm cannot learn these new skills then they will have to bring in new talent. If the practice needs these skills yet you feel you cannot afford it then simply outsource these skills until such time that you can. Vastly improving the conversion ratio and knowing why you are not instructed are an essential part of your future strategy.

With the new competitors providing legal services how do you raise the capital required to compete? That’s where the ABS (alternative business structure) model could work for some firms.  ABS is not just about consumers, in particular those trying to break into the business market where legal services are not seen as a distressed purchase but an essential part of running a business.

Once you have defined your services or specialisation then raising the necessary capital will be your key challenge. A well written and presented business plan outlining your objectives and cash requirements will be essential – just like all other businesses have be doing.  Just being a solicitors practice will not be good enough for the funders in the future.  ABS’s are a real threat with their significant financial resources, large advertising budgets and marketing muscle to challenge the core of the legal services market.

The entrepreneurial Solicitor should stop seeing fellow high street practices as competition and work more closely together against the new entrants. Building a strong regional law firm will mean mergers and consolidation but that is the only way you can compete with these new brands. Planning a new ABS model in conjunction with other local professional businesses is an option for some: gaining access to capital by working more closely with local IFA’s, estate agents and accountants will be the route for a number of firms.

Own goals

Many Solicitors practices are doing nothing about these changes, most are seeing reduced turnover and subsequently reducing profitability, yet continue to practice in their traditional way. Solicitors who do not adapt will be scoring a huge own goal by remaining in the “we are professionals and not business people” mode. Yes of course, a solicitor must be professional but failing to plan for these changes is a plan for failure; providing consumer services in the way many solicitors have done in the past is a recipe for disaster and the new purchasers of legal services will not accept such poor levels of customer service.

It was over 15 years ago that the first sign of solicitors sharing fees with non-lawyers with the concept of multi-disciplinary practices (MDP’s) yet many have failed to see the significance of the opportunity.  In fact, it is accountants who can see the opportunity between their tax work and probate that have applied for ABS status.

The Legal services act has put solicitors on the defensive, their only protection is in 6 reserved legal services, and the rest of the traditional solicitors’ market is up for grabs.

ABS may not be the term on everyone’s lips but it may have to become the flavour of the month for many solicitors’ practices. Whilst there will always be a place for a well-run traditional solicitors’ practice we must be aware of the significance of the new entrants and their effect on this changing market. It may well be that many solicitors are content to remain outside of this brave new world but those who are prepared to look for new opportunities will surely reap the benefits.

Top 10 tips when reviewing alternative business structures

• Do you have local relationships with other professionals who would like to be part of the business?
• Could they bring additional resources to your business?
• Do they have skills, such as CRM knowledge and sales?
• Will they invest cash?
• Can they cross sell services into their customer base?
• Do you have the compliance issues covered (COLP’s and COFA’s)
• What are the advantages of working with other professionals?
• Can other skills such as management and leadership enhance their practice?
• Do they have the vision to seek out these new opportunities?
• Do they have the time and energy to become an ABS?

It may well be that an IFA or accountant considers a joint venture with a law firm, or vice versa, to begin with, but this opportunity will only get bigger as the legal marketplace changes.

Penguin are delighted to be able to present the opportunity for you to watch Viv Williams of SIFA/Symphony Legal talk about this and more, please feel free to register for this webinar, with our compliments –

“Why Solicitors do not make decisions…and what can be done” – Viv Williams, SIFA

The next webcast will be on Tuesday 23^rd May, Viv Willams of SIFA, will provide a presentation on the following:

With the number of Solicitor practices hardly changing for the past decade, why is it so difficult for an IFA to engage with law firms successfully?

We now have around thirty law firms with in-house IFA’s from the 400 plus numbers a few years ago, yet those that are treating their wealth management department as equals are performing exceptionally well.

Viv will explore the current state of play with legal practices and why we are reaching a crisis in succession planning. Margins are squeezed across the whole profession and unless a law firm adapts a strategy of value pricing and using technology it is likely that many will fail, merge or close down. The numbers are well over 3000 practices at risk.

Viv will review the new options open to Law firms under the separate business rules and potential ABS structures that could significantly improve the bottom line of many practices.

Viv will explore how SIFA 360 can help Law firms to manage the change affecting their business.

To register, simply click here and complete the brief form.

The presentation will be approximately 35 -45 minutes in duration.