Innovative Methods of Delivery

‘Competition’, ‘innovation’, ‘new business models’, ‘new entrants’, ‘creativity’; all words and phrases that are being bandied round the legal market with increasing frequency at the moment.  To what extent has the market responded?  Are those who provide legal services really as slow to react as many argue?  A quick canter through some of the developments just in terms of the delivery of personnel might stop some of those naysayers in their tracks.

Let’s take a look at Acculaw (now known as Accutrainee) first.  Deemed an “innovative approach to solving the challenges law firms face in recruiting appropriate numbers of trainees and managing their cost” by none other than Tony Angel (ex-Managing Partner of Linklaters), Accutrainee recruits trainees and seconds them to law firms and in house legal departments in accordance with their requirements.  Accutrainee employs trainee solicitors under a SRA approved training contract and is responsible for the trainees and for ensuring that all SRA requirements are met or exceeded.  The ‘sell’ is that Acculaw minimises the risk, uncertainty and headache of sourcing trainees.

What about qualified lawyers?  There have been many developments in this area, so I can only pick out a handful.  One innovative delivery business that is on a massive expansion drive is Obelisk Legal Support (OLS). Billed as a legal outsourcing business “with a heart”, OLS uses former City lawyers to provide law firms and in-house departments with temporary support.  The “with a heart” bit comes from the fact that the model helps highly skilled people to remain engaged with the workplace until they are ready to commit again to full time or part time employment.  OLS allocates and manages the work based on the principle of ‘pooled capacity’ – each lawyer gives the time they have available around their family, typically a few hours per day.  According to OLS’s Chief Executive, demand from mid-tier firms is growing fast as they seek alternative ways to manage the peaks and troughs in their work.

Another innovative model is Virtual Law, working in association with the Practical Law Company.  Virtual Law provides businesses with access to cost-effective legal services without compromising quality of service and advice.  The lack of partnership structure and high administrative costs and overheads helps to ensure an efficient service at very cost-effective prices. 

What about existing law firms? Are they being left behind? Well, a couple of examples show that this is clearly not the case.  What about BLP’s Lawyers on Demand (LOD) service? This is a legal resourcing solution for in-house counsel designed to deal with cost pressures, a mounting workload or other resourcing challenges. The LOD service comprises a team of more than 80 “high-quality, flexible lawyers who will provide your business with a premium legal resource at a low cost base. They work directly with clients on a contract basis, either at client offices or remotely”.  The idea is that by establishing a team of freelance lawyers all supported by BLP, LOD is able to provide a service which combines the commercial approach and flexibility of an in-house resource with the support and quality assurance of a major law firm.

BLP are by no means the only firm taking this approach.  Eversheds have a similar service, Eversheds Agile, launched as a pilot in September of last year, but converted into a permanent fixture only five months later.  Enabling clients to bolster their in-house legal teams with lawyers supervised and indemnified by Eversheds, Agile’s roster had now grown to almost 80 lawyers by March of this year, with around 20 of the firm’s clients having used the scheme to that date.

This is of course without even looking at the innovative models rising up around delivery of services themselves, from firms’ own paralegal centres (see Addleshaw Goddard in particular), to ‘behind the scenes’ innovations from companies such as Eqoq and their Direct Law model. 

Slow to respond.  Traditional.  Conservative.  Is it really fair that the legal market is pigeon-holed in this way?

A confusing world for aspiring lawyers?

Much is talked these days about the wonderful opportunities and new potential routes that are on offer for aspiring lawyers.  There is no doubt that the landscape looks so different now for someone with an intention to become legally qualified.  However, is all this choice a good thing?

A school leaver, with an inkling that they might want to be a ‘lawyer’ when they grow up, can now take so many different paths.  Of course there is the first decision, not a new one, which is whether or not to do a law degree (figures change slightly year on year but generally about half of those who qualify as solicitors are non-law graduates).  Even for those who choose to do a law degree, the path is not straightforward.  Do they stick to a ‘traditional’ three year law degree?  Do they go for a three year law degree ‘with a twist’, such as the excellent problem-based learning degree at York University (as previously, I must declare an interest here as I do some tutoring on this course)?  Do they go for the new two-year degree being offered by the College of Law? Or do they go for the five-year course at Northumbria, which combines the academic, vocational and training stages all in one?

Degree in the bag, what’s the next stage?  Focusing on those looking to become solicitors, the decision of where to do your LPC is no longer straightforward (assuming you are in a position to have a choice).  Options for LPC are now more varied than ever, albeit that some of these are tied to particular firms.   The most recent additions to the LPC stable are the MA (LPC with Business) being offered to Reed Smith prospective trainees, and the new internationally focused LPC being offered by the College of Law in association with CMS Cameron McKenna. 

Of course all of this must be examined in the context of the ongoing Legal Education and Training Review (LETR).  As has been widely publicised, more common training of would-be lawyers, abolishing the concept of a qualifying law degree, sector-wide CPD, and scrapping the training contract and pupillage are among the more radical options being considered by the LETR.  With a core mission being to simplify routes in and around the profession, ensuring a “structure that increases choice over the processes of qualification, whilst delivering greater certainty to the professions and to consumers as to the quality of outcomes achieved”, it will be fascinating to see where the LETR will end up in terms of recommendations. 

Then you have the ‘Mayson’ approach. Professor Stephen Mayson has argued, in a recent paper authored with John Randall and published in February of this year, that an (improved) LPC should be the gateway to qualification as a solicitor but that there should be post qualification requirements for those practising in reserved areas.  Of course this approach does raise the question (neatly asked by Professor Richard Moorhead in his Lawyer Watch blog) of what exactly is the point of a title that doesn’t entitle you to do anything.

Even limiting the discussion to the system as is, aspiring lawyers have a much wider choice now in terms of what type of organisation to work for once the academic and vocational stages have been completed.  For barristers, there is now so much more on offer than just a traditional chambers. The same goes for solicitors – do you join a traditional partnership, do you join a firm that has a corporate structure (according to a recent blog by Viv Williams, CEO of Legal Futures Associate 360 Legal Group, 25% of the legal profession now trades as limited companies), do you join a firm that is non-lawyer owned and if so, does the identity of such owner inform your decision?

Choice can be a wonderful thing, but I do hope that today’s aspiring lawyers do not find themselves too overwhelmed. 

Nothing out of the ordinary then.......

So, now that ‘D-Day’ has come and gone (both the false one and the real one) what has actually happened?

Irwin Mitchell has grabbed the very recent headlines by appointing Glyn Barker, former vice-chairman and managing partner of PwC, with all the connections and knowhow he brings, as its new Chairman-elect.  Having declared its intention some time previously to take advantage of the new ownership and investment laws for law firms, this is a positive but sensible and expected step to take in terms of Irwin Mitchell’s long-term plans.

Along with Irwin Mitchell, around 55 other applications have been made to the SRA to form alternative business structures (ABSs).  The Co-op, included in this number, have started on an ambitious expansion programme, with family law being a particular focus for growth following its high profile hires at the end of last year.  Premier Property Lawyers, one of the largest conveyancing businesses in the country, became the first ever ABS back in October, gaining its licence of course from the Council for Licenced Conveyancers rather than the SRA. 

Meanwhile, DLA Piper has become a minority stakeholder in LawVest, a holding company that aims to launch an ABS aimed at small to medium sized entities this year.  The company is developing a ‘market-disrupting brand, pricing and service delivery model’ for business clients.  Regional accountancy firm Spofforths has stated that it plans to become an ABS and offer clients the full range of private client legal services.  ‘Virtual’ law firm Everyman legal has made public its intention to seek admission onto Sharemark – the stock market for small companies – in the last quarter of 2012 so as to fund growth and attract more solicitors to the business.  Legal expenses insurer DAS has acquired online legal services company Everything Legal as it prepares for ABS conversion. 

In other developments, Quality Solicitors (QS) still attracts the headlines.  With the cash injection from private equity house Palamon Capital Partners that it received towards the end of last year, the plan is to have over 1000 branches by the end of this year.  Legal Access Points are coming through into WHSmiths stores now, and Craig Holt has also confirmed that QS will introduce online legal services.  Talking of online, In-Deed, the AIM listed company that is looking to become an ABS and  invest into law firms, has found the going harder than expected in terms of converting online quotes into actual work, so has had to resort to using real people to contact potential clients.  QS aren’t the only ones looking at innovative delivery of legal services – the first video-conferencing kiosk to give instant access to a solicitors was launched in the Queensgate Shopping Centre in Peterbrough at the end of last year, the precursor to a network of 120 kiosks in shopping centres around the country by the end of 2012.  The service is also available to home users via a Skype-type system that Instant Law have developed. 

Oh, and a survey has been released showing that law firms and other legal providers that offer consumers fixed fees “are more likely to have a clear competitive advantage” over those that bill by the hour.

Is anything in this canter through of recent developments a surprise?  The short answer is no.  For the most part it seems that those in the news are those who had already widely trailed their intentions.  The thinking is that many of the 55 (as I write) applicants are perhaps just on a fishing expedition, keen to see what the full-form application will entail.  Other developments such as those made by Instant Law (and the yet more franchising brands being set up) are following a pre-existing pattern, following on from continuing and well-known market pressures. So where is the Big Bang, where are the shocks to the system?  Does that list of 55 contain any game-changing names or entities?  I do hope so…..

The online juggernaut

I listened in to an interesting webinar last night, organised by Epoq legal, the title of which was ‘Brands won’t kill law firms, customers will’.  Joining Epoq’s representative, Jon Busby, were Michael Scutt and Amanda Bancroft.  Michael’s day job is as a partner at City firm Dale, Langley & Co but he is also a well-known commentator on issues thrown up by the Legal Services Act   (his blog can be found at http://troubleahead.co.uk/feed/) and other issues in the legal services market such as the increasing use of technology.  Amanda Bancroft is a former barrister who now works as a digital strategist creating strategies and tools for the legal and pharma worlds.

The main focus for the webinar (not surprisingly, bearing in mind it was organised by a pioneer of online legal solutions) was the move towards online legal advice.  Much of the discussion centred around the extent to which the legal market was prepared for the inevitable shift towards web-based delivery of legal services, the extent to which this should and might take place, and the drivers for it. 

Amongst various issues discussed, three stood out.  First was Amanda’s contention that there is a very prevalent misconception amongst the legal profession at the moment that online provision of services is necessarily of a lower quality than face-to-face provision.  Amanda argued that there is no reason why lawyers cannot provide quality service using digital formats.  This led into discussion about the mix, or blend, between online services and face-to-face services.  One school of thought is that the online part of the package should be limited to the data capture side of things, whereas the high value, ‘intellectual’ advice should still be given face-to-face. Amanda’s argument was that online provision should not be limited to that level of advice/work, but that as more and more clients are happy to, and indeed expect to, sit in front of a computer screen and access information and advice, the scale of legal services provided in that way should consequently move on and up.  During the webinar the report from Peppermint Technology Limited, published in October and purporting to show what clients really want from their lawyers, was mentioned.  These figures have been bandied round the legal press, but it is worth noting them again – 96% of businesses surveyed wanted to have the option to communicate with their legal adviser online, and 81% of consumers surveyed were in favour of out of hours services. 

The second interesting point related to data capture and mining, and how far behind the curve law firms are on this.  With sites such as comparethemarket.com, and moneysupermarket.com, consumers are becoming more familiar with these kind of activities and view them as necessary and even useful, whilst lawyers still see them as disengaging and offputting.  Consumers have already been educated in this type of activity, and lawyers should try and benefit from this.

The third interesting point related to which way round law firms approach the issue of technology and online advice.  Is the ultimate driver what the client thinks is appropriate, or what the solicitor thinks is appropriate?  Jon Busby made the point that the fundamental principle behind Apple’s success is that they always put the customer at the centre.  We all know of law firms who have spent lots of time and money taking steps that they think the client wants, which are not then taken up by clients as in fact the clients didn't want them in the first place.  A survey done for one firm was mentioned, where the lawyers were asked what they thought was important to their clients, and clients were asked what was in fact important to them.  Pretty much opposing responses were received, with for example the lawyers putting ‘good drafting’ very high up and ‘staying in touch with the client’ very low down, and the clients doing the opposite. 

With all of this comes the important caveat that many lawyers are so busy doing their day-jobs and keeping on top of their work, that they haven’t got the time to consider let alone strategise about these types of issues.  However, it is vital that they do, as the online juggernaut will not be stopped and in order for many firms to survive they need to take up space in this market rather than leaving it exslusively to the technology companies.

The Perfect Storm?

Much as October 6^th has passed with a whimper rather than a bang in terms of ABSs (although at least with Premier Property Lawyers we do have one ABS now in existence), this hasn’t stopped the national press highlighting the changes in the legal market and commenting on them.  From Radio 4 debates to the front of the Business pages of many of the Broadsheets, the liberalisation of the market has been a hot topic.

Coinciding well with all of this has been the Espirito Santo Investment Bank report on the impact on the market.  The headlines make eye-catching reading, from ‘Perfect Storm spells the end for thousands of solicitors’ to a ‘seismic’ upheaval of Britain’s consumer legal market.  Whilst it must be remembered that the Bank is hoping gain a lot of clients and traction in the external investment market (they are currently advising Irwin Mitchell among others on their options for seeking external capital) the report is nevertheless a timely reminder to those in the ‘consumer’ legal market that standing still is not going to be an option.  As well as focusing on the retail end of the market, the report also deals with the top end, arguing that even the large City firms will not be immune from the changes.  Chiming with the greater proportion of commentators in the market, the report predicts that medium-sized City firms will be particularly badly affected. 

Much as the rules now allow for external investment, many firms have found over the last couple of years that the expectations of external investors are pretty high and do not sit comfortably with the sort of returns traditionally generated by law firms.  The report states that business angels would expect annual returns of 60-70%, private equity around 30-35%, and even public companies 12-20%.  It’s clear that for those firms who are serious about attracting external investment, the spotlight will very much be on the ‘business’ of the firm. 

On a final note, this week also sees the launch of yet another franchise, Simplify the Law.  This one appeals to me especially as its key message is the importance of client communication.  Co-founder Jonathan Brewer argues that clear and proactive communication will be the difference between success and failure for law firms. It’s always good to see someone singing from the same hymn sheet as yourself (see my last post…..)

It's personal.....

“We never listen when we are eager to speak” (Francois de La Rochefoucauld); “Many can argue – not many converse” (A. Bronson Alcott); “Communication skills are the lifeblood of a successful life….if you plan on spending any time there” (Doug Firebaugh)

Amidst all the discussion of the ‘Legal Big Bang’ and the implications of both this, and other market pressures, for lawyers, one challenge is constantly referred to; the need for lawyers to set themselves apart. 

Knowledge of the law will be a given for qualified solicitors (as opposed to the large numbers of paralegals and law graduates who may well flood the market to a greater extent in ‘legal roles’).  So although focusing on legal knowledge may set qualified solicitors apart from non-qualified legal workers, it won’t work in the main as a focus for setting themselves apart from other solicitors (though I appreciate that Quality Solicitors might have something to say about this contention).  What about commercial awareness?  Again, I think that this is pretty much a given. Much as lawyers like to talk about this as if it’s a new concept, an understanding of your client’s business has been important since time immemorial.

I think it’s important to go back to basics and this is especially relevant when grappling with issues (as many firms are now) such as where does a solicitor add value.  Ultimately solicitors provide a personal service to their clients. What counts is their ability to interact, communicate and build relationships with their clients.  An ability to communicate well, interact well, and have effective and profitable relationships with clients and potential clients will help to set individual lawyers apart from other lawyers less adept at these skills.  Mastering these softer skills has always been important but will, I am convinced, become even more vital as lawyers attempt to differentiate themselves and strive to be ahead of the pack. 

Another First on the Blocks

Acculaw……….not sure about the name, but what a great idea, especially when the estimated cost for recruiting and training one graduate is £175,000.  Like QualitySolicitors, you may be able to pick a few holes in the concept and the strategy, but you have to applaud Susan Cooper for being a first-mover and taking the bull by the horns.

There is no doubt that many firms wrestle with what is the best and most cost-effective way to go about trainee recruitment and the vagaries of the market make this a moving target.  The benefits that Acculaw aim to provide then, in terms of flexibility and lower cost, are evidently going to appeal to many firms. 

Any extra vehicle through which the overly numerous budding lawyers can ensure qualification and justify the huge expense of their degree and post-graduate studies has to be a positive step for them as well. 

However, I must confess to being surprised at Acculaw’s assertion that they are in advanced discussions with several City law firms and suspect that any involvement from such firms would be fairly one-sided in favour of the firm rather than the trainee.  My experience of these types of law firms (and I trained and qualified at one myself) is that they aim to produce ‘branded’ lawyers at the end of the training process.  By this I mean individuals who are fully steeped in the practices, processes and culture of the firm. Such individuals are also given the benefit of a full in-house training programme during their training contracts, spread over the two-year period.  Surely having trainees ‘dipping in and out’ would hinder this process. My suspicion is that whilst the big firms might look at this type of arrangement as expedient in terms of cost and flexibility (and indeed Tony Angel, former Linklaters senior partner has welcomed the initiative), they would be unlikely to take such a trainee on at qualification.