Posted by Doug Sawers, managing director of Legal Futures Associate Access Legal
Commercial success is the driving force for ambitious law firms and it should come as no surprise that many have a renewed determination to re-evaluate current business practices and strategies in the wake of Covid-19.
As well as improving efficiency for the long-term, firms will naturally be looking to bolster their revenue and profits.
While commercial and corporate services were hit hard by the pandemic, demand for conveyancing, employment law and private client services provided a much-needed boost.
Many are now looking to build on these successes, expanding and diversifying their offer and growing their market share.
Access Legal recently launched a free report How can firms achieve commercial success in the post-pandemic world?, featuring advice from a number of industry experts. Here, we hear from three of these individuals as everyone in the industry focuses on how they can unlock their potential to drive efficiencies and ultimately increase profitability.
The tremendous cost and time-savings seen over the past year demonstrated just how lean law firms can be. While remote working, virtual client meetings and court hearings certainly have their drawbacks, there is no denying that fee-earners have reduced their expenses and saved on travelling and commuting.
Last year, it was reported that 36 of the UK’s top 50 law firms didn’t have enough cash to cover three months’ worth of lawyer and staff wages, while Bar Council research found that 60% of barristers took on personal debt or used their own savings to weather Covid-19.
Another report, by PwC, found that 81% of the top 100 UK law firms are concerned Covid-19 will stop them meeting their ambitions.
However, speaking to Access Legal, Liz Hulme, practice manager at Taylor Brown Solicitors in Ellesmere Port, believes the pandemic has helped to create a newfound nimbleness for many firms.
“Working through lockdown led us to embrace technology more quickly than planned, resulting in additional costs for hardware, software and cybersecurity,” she said.
“During 2020, we were thrown in at the deep end, having to come up with new ways of working, quickly, and it was trial and error. As a result, going into 2021, we have learnt a lot, and this has put us in an excellent position to be nimble and able to switch from office to home literally at a moment’s notice without interrupting the flow of business.
“We are a high street law firm, and we are looking forward to getting back into the office and welcoming our clients back at the appropriate time. However, behind the scenes, technology will enable us to work more efficiently when we are not seeing clients and allow staff the time to work from home when necessary.”
Considering the way you practice
For Legal Futures editor Neil Rose, market consolidation is highlighting new ways to practise:
“’Virtual’ or ‘dispersed’ firms are becoming more ambitious, recruiting teams or even whole (small) firms onto their platforms as well as individuals,” he told us.
“And then there are the new rules that allows solicitors to practice from unregulated businesses that do not carry out reserved legal work – given how many fall into this category, the greater freedom this offers is also proving attractive for a small but growing number.
“This is all before you consider the now relatively longstanding opportunities presented by alternative business structures, such as external ownership and multi-disciplinary practices.
“Law firms are no longer competing with other businesses that look and feel the same as they do. I’ve reported on hundreds of new business models and strategies in the last 11 years of Legal Futures – it is true that many have made little impression, but undoubtedly some have, at all levels of the market.
“It strikes me that, while not changing could be a perfectly sensible decision, this should be a positive choice, rather than one made by default. But I fear it is a challenge that many firms would prefer not to take up.”
Work-life balance opportunities
Anton Balkitis, motor transport lawyer and partner at Nottingham firm Rotheras, believes that work-life balance needs to be factored in when considering cost reductions.
“Firms that haven’t got their IT sorted this year are likely to have lost business as a result. If you haven’t invested already, now is the time to move to new telephony, electronic files etc. This is not just about reducing costs, it’s about recognising that our time is valuable, not only from a fee-earning perspective but also in terms of improving work-life balance.
“We’re now envisioning what the future will look like for us. Since we work with national and international clients, remote working isn’t a problem, but some may still want us to have a physical presence.
“Another thing to think about is training. Attracting talented people has never been an issue for us but working remotely means it’s even more important to ensure solicitors build the right competencies and that we monitor them, not just to meet the minimum requirements but to help them excel in their careers.
“It’s also important that trainees in particular don’t miss out on the informal learning and camaraderie they’d get in the office. We use technology, such as merged calls, Teams and Zoom etc., to maintain good communication and collaborate remotely.”
Access Legal’s full report, How can firms achieve commercial success in the post-pandemic world?, is available to download for free.