The future of law firms blog

The future of law firms - from surviving to thriving

Mar 30, 2021 3:11:17 PM

By Michael Culver, Partner at Bolt Burdon and Chairman of Solicitors for the Elderly

If I had been asked to write this article a year ago, I might have said things like law firms will need to embrace technology to enable them to meet with clients remotely. I might even have suggested that more firms need to offer more flexible working policies to put their staff first, by allowing them to work from anywhere, whilst reducing their carbon footprint and preventing wasted time commuting whilst maximizing productivity.

It seems the challenges of 2020 have opened the doors here at least. Yet, there is still a long way to go and I would like to see more law firms moving from surviving to thriving.

At my firm, Bolt Burdon Solicitors, in Islington, we are rather forward-thinking. We have had a fully flexible working policy in place for many years enabling our staff to work where and when they like subject to meeting the demands of our clients. We have a system in place that enables us to work from anywhere in the world (providing we can get wifi) and whilst we strive to be fully paperless, we can proudly say we are at least “paperlight” in that we don’t keep correspondence clips and only retain essential original documents.

We had been using Skype and FaceTime for a long time but I still remember asking “what is Teams?” the first time it was suggested we use this to host a meeting last year. Likewise, Zoom, Google Meet and the numerous other systems that exist were all new to me.

So what does the future law firm look like and how will that firm thrive rather than survive? Well, we could replace all lawyers with artificial intelligence. AI and robots are clearly the future or at least in so far as the movies would have us believe.

On a serious note though, it is important for law firms to embrace technology even further. Personally, I’m not a big fan of document writing software and DIY type systems that will save me time. The systems I have seen here will never be as good as a competent qualified lawyer putting in the necessary time and effort to get things right for their clients. Such systems are often too prone to turning lawyers into data inputters and frankly, this is not what we should be using our qualifications for. I know many will disagree with me on this and the systems are evolving and improving all the time to have cover for human error, but until they can think for themselves, I’m not going to be totally convinced.

That said, technology can certainly help in terms of legal reference, materials and research tools and the more these improve and become readily available, the better the standard of the profession will be.

Technology to one side, what else can law firms do to thrive in the future? To my mind, there are two things firms need to do to make that happen:

  1. STOP competing on price; and

  2. Focus almost exclusively on providing excellent client service every single time.

At Bolt Burdon, we aim to exceed our client’s expectations, every lawyer, every time. This isn’t always easy and takes time investment in getting to know your clients and the confidence to turn away work or allow potential clients to go elsewhere because the price isn’t right for them.

Too many firms are hamstrung by saying “Yes” and doing “more work for less pay”.

The value of the qualification has been lost in recent years. There was a time where lawyers were respected, admired, appreciated and valued. That time is no more. Now legal “advice” can be found at the press of a button and so many people are convinced they can do just as good a job with the DIY model.

I’ve heard lawyers being compared to electricians in the past. I wouldn’t fix my own electrics because the chances are I would burn the house down. Yet people have no such qualms about making their own Wills, Powers of Attorney, doing their own conveyancing, arguing in Court, finding their own business documents and such like. This premise of doing so will save me money, is simply an illusion. It may save you short term money but what could it cost in the future?

Lawyers need to move beyond the “Google” age. What I mean by that, is we need to get back to selling people “advice”. If all a client wants is options, they can use Google for that. What a client wants is advice, what should I do according to an expert who has seen it many times before, seen what can go wrong, already made mistakes and learnt from it or studied others mistakes so they know what not to do?

I’m not selling you a completed form, a Will or an LPA, I’m selling my advice based on my years of experience and training. Some clients will still say £1,500 is a lot of money for a Will, but you’ve not just given them a Will, you’re giving them strategic advice and experience that you have accumulated over many years of writing Wills for many people.

Law firms of the future need to learn to say no. To refuse to take on that difficult client, who just doesn’t see the value a lawyer brings and wants a job done faster and as cheaply as possible.

Firms need to leave those clients for the untrained, bulk legal service providers and focus their time and energy on clients who do value their experience.

Let’s look at some numbers for a moment. Say ten people find my website and call me asking me to quote them for a Will. I could tell them that a Will is going to cost £200 and convince them to instruct me. I then have £2,000 of fees banked but I also have ten clients that I need to keep happy. All of whom will want a Will prepared quickly, accurately and for me to spend the time making sure everything is correct and meets their needs.

Meanwhile, if I’m recording my time at my usual hourly rate of say £200 an hour and I allow one hour for the initial meeting, one hour for drafting the Will and sending it to the clients and another hour for the final meeting to conclude and wrap things up that means I will have effectively lost £400 on every file. That’s assuming the time matches, which it rarely will, because no doubt I will need to chase the client to come back to finalise things, spend time answering queries over the telephone or on email, arranging for storage of the Will and sending them copies, all of which could easily add another hour or two of time onto the file.

Assuming the time is right though in order to bank £2,000, I will have invested £6,000 of my time. Clearly, it’s not a good investment. But wait, Wills are a loss leader and we do the work so that we can get the probate down the line? Does this model still exist? Does it work? If you are at a firm that operates like this, I’d be interested to know if you have checked your Will bank to see how many of those Wills within it are still the Last Will and Testament. There is a strong likelihood a large number of those Wills have now been replaced by Wills made by other firms. In that case, yes, you’ve made £200 but you’ve lost £400 and you will never see the probate work because their Executors will not be coming to you to collect the Will when that person dies.

Going back to the time spent, as there are only so many hours in the day, I won’t be able to get that lost £4,000 back without working longer and harder hours, pushing for more and more clients. Eventually, my standards will drop, I will be too tired to maintain my efficiency and I will be forced to slow down, meaning less billing.

Alternatively, I could rewind and tell each of these clients that I believe doing a Will is a very important task and as such, I charge by the hour for the time spent on writing the Will and estimate this cost to be between £1,000 and £2,000.

Chances are some of these ten people will walk away. There is a good chance ten of these ten people will walk away, but if I get just two of the ten to instruct me, I potentially bank between £2,000 and £4,000. Plus, I charge properly for my time so I’m not investing £6,000 to be paid £2,000. Instead, I’m investing £2,000 and being paid for that time. That means I need to work fewer hours for the same result. I only have two clients to keep happy instead of ten, so my job is easier.

Chances are those two people will be delighted with the service I’ve provided and will hopefully tell a few others how impressed they were. Those others may decide to come and speak to me and instruct me and hopefully, the snowball I threw will keep rolling and rolling until it becomes an avalanche. If that happens, I will need to grow to ensure I can keep maintaining standards but that’s healthy growth at the right price.

Leverage is one way to help ease the pain of the first model above. What I mean by that, is the lawyer delegates the task to a junior member of staff, who charges out at a lower hourly rate. The time spent will still be more than you get paid for it but the loss will be less and the lawyer is, at least in theory, free to do other more chargeable tasks. Yet the reality is, the lawyer needs to manage and supervise these juniors. They need to check and inspect their work, all of which will take time which isn’t necessary recoverable. In other words, you end up with the same result.

In my view, therefore, the volume model simply doesn’t work and it’s time for law firms to condemn it to history. As above, we need to focus on quality legal service for a price that is right for us and the client, not be driven by the client seeking a bargain. If a client won’t pay a fair price, then maybe they are not a client you want.

I appreciate it can be difficult for law firms in certain parts of the country who have perhaps always operated on a volume model to move away from that. It seems especially daunting when your rival firms are charging much less than you. It requires an element of bravery and maybe some short term pain in reduced figures whilst you increase your prices and less work comes in the door, but by doing this, delighting the clients you do have you can ensure you get more quality work in the door and be paid properly for it.

It’s not an overnight change but it’s worth the pain because I sincerely believe that if you can embrace this idea then you are future-proofing your firm, your profit and your future.

This article is featured in the spring 2021 edition of the quarterly news digest, Entitlement. Click the image below to download your free copy of Entitlement for more informative articles and interesting case studies.

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Topics: Entitlement, Legal Services, Guest writer