Law firms and joint ventures - good, bad or sad?
Posted: 08 November 2010
I had a meeting yesterday with the two most senior partners of a prominent regional law firm and we discussed exploring a joint venture whereby we deal with drowning the new business in enquiries and leads - potential clients - and they do the legal bits. I left the meeting with that parable at the back of my mind about not mixing ‘new wine with old wine skins’.
Take professional negligence as an example. We can get lots of attention online by telling the UK about claims against lawyers, surveyors, IFAs (unaffordable mortgages), etc, and generate lots and lots of online enquiries. We would then capture the client and let the ‘legal people’ win the case. The client gets their justice (AKA cash) and the lawyer gets their sense of doing good (costs).
I love the idea of joint ventures because they represent the coming together of pieces of a puzzle which, when combined, create tremendous value and wealth. In the case we discussed yesterday, we would deal with sales, marketing and efficiency while the law firm would deal with processing and winning cases. The difficulty with partnerships is that they need to be win/win and balanced. Will it work if the law firm thinks they are the more important partner because they are clever, when in fact without clients their expertise is not worth very much?
In the big bad world of business, the customer is king and sales are everything – but how many lawyers have you met who believe it is ALL about the customer and spend their life networking and looking for word of mouth referrals? Not many.
I am looking at a couple of partnerships right now, one for professional negligence work and one for care home fee claims. In the latter we have a great opportunity to go after about 1,000 – 5,000 continuing care home fee funding cases whereby the law firm gets 90% and we would get 10% (and front all marketing costs, filtering, pre-legal stuff, etc.)... a sustainable and fair business model? Maybe in some people’s eyes, but in any other industry it would not get airborne.
In conclusion... can you put new wine into old wine skins? Yes, but it’s delicate. Come on, lawyers, give work sources a reason not to own firms outright and just employ well-paid lawyers.