Re-imagining the legal consultancy model: How to do it better

Guest post by John Hayes, managing partner of Constantine Law

Hayes: Consultancy firms need to show a nurturing mindset and support structure

The emergence of the legal consultancy model, in earnest, over the past five years has challenged the business models of traditional law firms.

Challenger firms offer greater pay transparency: typically, 70%-75% of fees recovered on work introduced. This is more than double the recovery of traditional firms operating under the 3rd/3rd/3rd model.

Further, consultancy-based firms promise a life free of politics/management responsibilities and chargeable hours targets. It is a refreshing ‘bottom-up’ view of the world. As a result, many consultant partners have been leaving ‘Big Law’ in droves and embracing a new life of professional freedom.

This is backed up by research in 2021 by Arden Partners, which concluded that the new terms of engagement had allowed consultancy firms to prove the efficacy of their operating model and were growing accordingly.

The report also suggested that consultancy firms would be one of the main beneficiaries of the predicted demise of around a third of existing traditional firms, “squeezed between fast growing acquirors and the consultancy model”.

But is it all one way and do the consultancy firms still have a market professional advantage?

The bigger law firms are hitting back. Many have, post pandemic, pivoted to a more flexible (family-friendly) model. The genie is out of the bottle and it will be impossible to put back: most law firms offer working from home as standard for at least half the week and some forms of flexible working.

The pandemic put the spotlight firmly on professional wellbeing and mental health and many of the bigger firms have progressively embraced the ‘new future’ and thus may feel they have destroyed one of main advantages of consultancy firms.

This fact coupled with greater benefits may demonstrate an ongoing market advantage for traditional law.

How should the consultancy-based firms respond?

Post pandemic, the legal consultancy firms themselves, my own included, need to up their game by pivoting to a ‘consultancy-plus’ offering (and mindset).

This means total transparency in pay plus more pastoral and professional support in order to nurture lawyers, both senior and junior.

The consultancy model is orientated towards go-getting entrepreneurially focused lawyers who, understandably, want to keep more of what they generate and who are often frustrated by oppressive chargeable hours targets, unnecessary admin and politics getting in the way of effective service delivery.

Note, however, that the consultancy model can be exposing: the flat structure means that there are no reporting lines and little managerial oversight, so consultants have to take full responsibility for the service they deliver.

Client services are far less mediated than in Big Law: one of our team with more than 25 years’ PQE said he was now a better lawyer than he had ever been because the model had forced him to up his game. He said he felt more professionally alive.

However, we must also be able to demonstrate a key missing component to date: a nurturing mindset and support structure.

I asked a partner at the UK’s largest consultancy firm how many assistants the 50 employment lawyers in their department had. The answer was none.

Many of the bigger legal consultancy models are owned (ultimately) by private equity firms and private equity does not really ‘do’ nurturing. They want to hire free-standing partners supplying their services through limited companies.

The answer is this: the consultancy-led firms must engage associate/assistant solicitors to support the practice development of consultant partners. They must also offer professional support services, (e.g. access to PLC) and PAs as standard. They must provide a proper pyramid of support, not just to consultants but also to clients.

Put another way, the consultant firms must pivot from being partner focused to client focused.

It is possible to do this (we do) if we continue to reimagine a modern way of working.

    Readers Comments

  • Paul P says:

    An interesting insight. Many PE backed consultancy-model firms are hyper-focussed on profit generation and offer limited support to their lawyers, despite their promises. In my time at a fee-share firm there was little transparency on the fee-share arrangement for each consultant and it became clear that the firm actually had internal lawyers taking the lion’s share of the leads. ‘Nurturing’ really doesn’t exist despite assertions of ‘wellbeing’.

  • John Patrick Hayes says:

    Paul, if you want to LinkIn with me then let’s continue the conversation off-line, if you want. There must be transparency for this model to work. We achieve it, so it is “doable.”

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