At the start of the month (it’s been busy) I attended this conference at which I presented a paper on “Commoditising and innovating legal products” (on which there is a separate post) and some key points emerged that I thought I would share:
After some rather dramatic music, Viv Williams got things off to a start at the beautifully refurbished Cumberland Hotel in Marble Arch. He talked of the challenges of reform, regulation and recession and advised firms to “get work, cut costs and restructure”. He mentioned that 250 firms had now been assigned to the risk pool. There were some interesting statistics – the US has 1.1m lawyers in 460K firms and there are 412K sole practitioners whereas the UK has 140,000 solicitors and 10.4K law firms.
Steve BIllot from BDO shared some scary insights on the impact of the first “white collar recession” – indicating that the average age of the partners in the firms he dealt with was 58 and there was rarely a succession plan. He said that it was easier to deal with financial problems where firms had adopted LLP status and that a rolling 13 week cash flow forecast was critical for survival. He warned that insolvency practitioners advised that insolvencies peak some 12-18 months after the recovery from the recession and ran through some turnaround options.
Viv took to the stage again – this time with some predictions on what might happen as further changes in the legal market took place. He suggested that the top 100 firms (based mostly in London) would stay the same – as would the strong regional brands. But he was less confident of publically funded practices and looked to the emergence of community law firms and further specialist niche practices. He suggested out sourcing, off shoring and e-commerce to drive down costs and hinted at new models where firms might keep the top 20% of work and generate referral fees from the rest. He challenged the audience to think about their business and strategic plans. A move to fixed fees seems a certainty and he berated the extent of MDS (Marketing Deficiency Syndrome).
Mark Lewis, outsourcing partner at Berwin Leighton Paisner, started with his explanation of why the earlier moves by the accountants into the legal profession had failed and looked at the early appetite for legal process outsourcing generated by the NASSCOM report which estimated that the US market was worth $US3-4 billion. He demonstrated why, in his view, “LPO is a baby industry and we are all feeling our way” and suggested that most likely adopters would be inhouse counsel. It was interesting to hear about Rio Tinto’s recent move to appoint CPA Global outsourcers to the panel and insist that the other major firms on the panel work with them with the result of $1m savings achieved to date.
Being a huge fan of Chris Hughes, a motivational sales speaker, I was disappointed that the delegates did not participate as much as I had seen others do so in the past. He explored why lawyers failed to grasp opportunities to win new fees and offered a well known model with outgoing- reserved on one axis and task-people orientation on the other. He also managed to get across the message that effective selling needs a shift of focus from the lawyer and his/her needs to that of the client. I also really liked his ideas on prioritising by considering whether something was a £10, £100 or £1,000 task.
Jane Galvin, Head of Professional Services at Barclays Commercial used its Legal Services Industry Research Paper to provide a broad economic forecast. After lunch Clare Merrick presented some practical tips on managing professionals before my slot and a general panel discussion.