Steve Carter Head of Professional Practice Group Northern Region New developments in an old profession We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten ID: 617015
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Slide1
LEGAL INNOVATION
Steve Carter
Head of Professional Practice Group
Northern RegionSlide2
New developments in an old professionSlide3
“
We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten,”
“Don’t let yourself be lulled into inaction.” Slide4
http://www.bakertilly.co.uk/sectors/professionalpractices/professional-practices.aspxSlide5
New developments in an old profession
Structures
FundingDelivery channels
An environment for innovationSlide6Slide7
Consumer brandsSlide8Slide9
EntrepreneursSlide10Slide11
MDP’sSlide12
Expect the unexpectedSlide13
Getting used to the new structures
Some initial problems
Shared premises – client confidentiality?Outsourcing – quality of serviceConflicts of interestGovernance – dominance by one personNominee ownership – who is really in controlSlide14
Structure – predictions 2020
The
increasing complexity of law firm structures will challenge the regulatory framework. A fundamental review of what legal activities are regulated will reshape the market.
Law
firms and ABSs will adopt marketing strategies much more reminiscent of retail operations.
Consolidation
in the market will be driven by demand from big brands to have white-labelled legal offerings.Slide15
People – predictions 2020
Who
a ‘lawyer’ is will change significantly as a range of roles develop within legal businesses that do not involve directly providing legal advice; non-lawyer owners in particular will look at what a person brings to the business, not their qualification. Skills such as project and process management will be critical to the future success of firms. Regulation will focus on the entity’s activity, rather than the various individual legal professionals.
The idea of partnership bestowing ownership rights in the same way as it does currently will die out
.Slide16
FundingSlide17Slide18
New focus on underlying performance
What does a law firm make
What are they worth and whyWhat are the real maintainable earnings?Not all firms are the same even though on the outside they might look itWhat makes the more profitable ones do better is thinking like a business.Internal management is an anathema to many partnershipsSlide19
Funding – predictions 2020
As both investors and law firms better understand each other’s requirements, investment will flow more readily.
A process of natural selection will thin out those without the backing to compete. A ‘trade’ in law firms will emerge as investors look to exit – with few law firms business planning more than three years ahead, fears over the regular three-to-five-year investment cycle will recede. Law firms will adopt proper performance metrics Slide20
DELIVERY
“Multi – channel”
“Multi – dimensional”- Affiliations by supporting other brandsMove away from hourly ratesSlide21
Delivery
Are the old ways the best?
Separation of process from valueNon contentious services – access the library?On-line help as needed?Unbundling the servicePay as you goScope of the retainer – nothing is insurmountableSlide22Slide23
Building Brands
The key to brand is consistency of service
If Co-op can deliver in legal services what they do in, say, funeral services, they will win.Slide24
Brilliant Law
Bert Black - £82m fortune
Why is he different?Run as a businessBrilliant law – based on peoples search habitsFixed feesSlide25
New models
Riverview law approach to commercial customers
Start from scratch – what do clients actually want – then designed a service around it.Top customer support peopleOperating and customer service modelEnd to end technologyLow overheads Slide26
Challenges to traditional ways
How much is an hour of your time really worth?
Anyone know how charge out rates are set?Why is your rate for an hour what it is?Slide27
Starting from scratch
What do customers want
Where are the customersHow do you get themWhat profit does the service deliver? What is the business risk?Is the return worth the risk?How much capital does it need?Who will provide the capital?Slide28
Survey of non ABS firmsSlide29Slide30Slide31Slide32Slide33Slide34Slide35Slide36Slide37Slide38Slide39Slide40
Final thoughtsSlide41
Conclusions
Most adaptable will survive
Others will notLaw firms will continue to fail in increasing numbers for a variety of reasonsScottish market is in a similar state to southAnglo- Scottish mergers is a trend
LSA
(Scotland) 2010 – identical logic to LSA 2007
49% rule – will it matter
?Slide42Slide43
What of the future for the legal profession?
In 2020 many current partners will be long past retirement age.
What is “opportunity” for the next generation?Pay for their retirement?Buy their practice – what are you buying?Slide44
What of the future for the legal profession?
“The legal sector has not had to change for hundreds of years as it has been a closed shop with high barriers to entry. Those have now changed. Innovators can come into the sector and do it in a different way.”
And do it they will.Slide45
Contact details
Steve Carter
Tel: +44 (0) 161 830 4000
E-mail:
steve.carter@bakertilly.co.uk
While every effort has been made to ensure the accuracy of these notes, the information contained in them cannot, by its nature, be comprehensive. No action should therefore be taken without first seeking specific professional advice.Slide46
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