Startup law firm makes waves
Posted: 03 November 2010
I feel fortunate to have what I would describe as ‘front row seats’ at what is set to be the biggest shake-up of legal services in history. This is because I meet with senior partners of big law firms regularly and also the mavericks and innovators who some of the big guys ignore at their peril. Had you heard of Facebook 5 years ago? I thought not...
In this blog I will try to give an honest running commentary on all these meetings, the exciting opportunities I encounter, and also my frustrations.
This morning I am meeting my friends at a ‘startup’ law firm in Bristol. They are innovators and are winning lots of big clients from sleeping law firms. Their strategy is truly unique: dress down, meet in Starbucks instead of the board room, conduct business without PAs, and offer loads of free unconditional help to businesses wherever possible. It is working for them. I think they have tapped into a special marketing force called emotions – many people don’t like lawyers as they are seen as a bit stuffy, high and mighty, and expensive.
They have a new business model which in a nutshell is a law firm that is set up like a barristers' chambers:
- All lawyers are partners and specialists
- Everyone gets to keep 70% of what they bill
- Everyone cares about their clients as they all feel self-employed
- No secretaries or PAs as this just makes things slow and expensive
- 50% cheaper than the firms they came from (for the same people and same advice!)
I love this model so much I even told my friend who worked at a top 10 firm to join them and he did.
Is this model going to upset big national or regional firms like Eversheds or Burges Salmon? Not right now, but the real risk facing those firms is that the only asset they have is their people, who have two things: expertise and clients to sell to. Many top associates and even partners are working horrible hours with the promise of more reward and freedom in the future but it can be a long time coming.
What if this Bristol Start up scaled up to 2000 partners?
It would make complete sense in my view. Top lawyers all get to work where they want and when they want. In big, mixed-discipline deals they can collaborate in a Facebook-style group. Everyone keeps the lion's share of what they bill and pass the savings on to their clients, which is attractive in an age of austerity. Finally, none have to subsidize loss making departments.
Could this really happen? If it doesn’t, I will do it myself (you read it here first). In financial services we even have a template called St James’s Place Wealth Management. 1,300 self-employed consultants offering financial services to their own clients, under one umbrella. As of June 2010, it has £22 billion under management and £36 million profit before tax, and this excludes all the earnings of those 1,300 elite advisers. Interesting...