One of the things I keep reading about at the moment is the advantage that new entrants to the legal market have in terms of starting from scratch. The argument goes that existing firms, with their clumsy decision-making structures, established ways of doing things, entrenched office politics, and so on, do not have the vision or agility to take the bold and adventurous decisions necessary to be sufficiently innovative and move their businesses forward in the new competitive market place.
For someone starting afresh, however, with a blank sheet of paper, it will be much easier to think strategically about what their business will be, and then set up all the necessary elements accordingly. This includes the business structure, marketing strategy, internal make-up, use of technology, and so on. By way of example, we all know the difficulties of building up and adding on bits of IT over time – a new business can (finance depending) ensure that it has the required, up to date, technology from the word go, with all the various elements co-ordinating together nicely.
However, I think an important element to add to this debate is knowledge of the legal world, and most specifically knowledge of what the client wants. Those who have been practising for a while, especially those who have also been involved in the running of their own practice, will have an important insight into lawyers, the legal market, and how clients interact with lawyers and view them.
For this reason, talk of ‘blank canvases’ and so on should I think distinguish between those coming into the market for the first time, and existing market participants making a fresh start. It is the latter category that excites me the most – and the one where I think there is most potential for successful growth in the new legal world. Lawyers who have entrepreneurial tendencies, who are able to assess the market in a strategic and rational way, but who have the knowledge and contacts/clients that they have built up over their time working in the sector. Many of these lawyers may well be feeling frustrated in their existing practices (I have certainly met more than my fair share over the last year or so). If they cannot convince their practices to take the new challenges seriously and consider change where necessary, moving on and setting up afresh might be their best option for a successful future in the law. However, this is obviously something that is easier said than done – starting up a practice takes a certain type of person and no matter how good the business plan, more risk than most lawyers are accustomed to taking.
There are options emerging in some of the franchise models that we are reading about increasingly in the legal press. Aside from these, I am fascinated to see how many new, smallish firms are set up by disgruntled associates/junior partners who have a clear idea about the way forward for the future, but a firm unwilling or unable to move in that direction. All the talk is of the Legal Services Act leading to a loss of 3,000 firms, but it is quite likely that there may be at least some movement in the opposite direction.