Recent research on the future of the law in the UK highlights some worrying trends that could have potentially dramatic impacts on the profession. Despite the fact that the first licences for alternative business structures will be issued in October 2011 many lawyers seem to be underestimating the scale of the potentially dramatic changes to private practice.
One partner responding to the Future Lawyers research was confident that “change will be slow”. An associate claimed: “I suspect that the future will be less dramatic than we think”. But one associate at a west end boutique firm felt that the very essence of the law is at risk: “It will finally cease to be a profession”.
In the world of restructuring and re-aligning businesses, 18 months is not a great deal of time.
One of the most important changes on the horizon is the introduction of alternative business structures. These new regulations will allow external parties to invest in law firms and one of the first questions an investor is likely to ask could be: “what level of return will I get on my investment?”. If law firms have not taken measures to generate efficiencies then how will they be able to deliver for these key stakeholders?
Many see efficiencies being generated by the ditching of lockstep pay for associates, favouring merit-based pay instead. Alternative fee structures, legal process outsourcing, the over-specialisation of associates, a greater proportion of paralegals and globalisation will all impact on the traditional practice model.
In the world of restructuring and re-aligning businesses, 18 months is not a great deal of time. It is therefore quite surprising that so many lawyers seem to be complacent about what the future holds. If you haven’t already done so surely now is the time to be considering different business models, identifying how they will be financed and agreeing what level of controls that external investors will be given? Or are you confident that the new coalition government will delay the implementation of these changes as reported in The Times recently?
By postponing decisions around alternative business structures, partners risk having to make too many changes too swiftly. And by having to implement change at the last minute, the likelihood is that associates and other employees will have change imposed upon them. Where business change is concerned if employees are not involved in the process they are much less likely to be fully engaged with any changes and ultimately morale will be affected. This, in turn, will affect a firm’s ability to retain its best associates.
Whatever your view on the impacts of the legal services act, change is coming – surely it’s better to be over, rather than under, prepared? Get involved in the debate and have your say either by posting a comment below or visit www.future-lawyers.co.uk.
