Recently, the Law Society Gazette reported on a 30% increase in the number of new solicitor firms created in 2016. According to the LSG, around 1000 new firms will open in 2016, with a 40% rise in sole practitioners. The SRA statistics show that 85% of law firms are either sole practitioners or small practices with 2-4 partners.
What exactly does this mean?
At Lex Conscientia, we believe that the reality of these figures will put significant pressure on the larger firms. Although there is some work that can only be carried out by multinational firms, a suprising amount of legal work, even for large corporates, can be as competently done by much smaller firms.
Smaller firms are able to attract clients with far less red tape, especially in the manner in which they bill. Many smaller firms are able to offer fixed cost billing easily and quickly. This is something that all clients want but very few large firms offer as a matter of course.
Similarly, the intimacy of the smaller firm supports the trusted advisor relationship in ways that perhaps are not so easily achieved in larger firms; that in practice actively work against any one practitioner becoming too close to a client.
Another attraction for clients of the smaller firm is the lack of overheads. With the judicious use of technology, a small firm can punch well above its weight but be run on a shoe string budget. With budgets for external advisors intensively managed, many clients appreciate the fact that they are not indirectly paying for expensive offices, huge amounts of support staff, fixtures, fitting or extravagant client entertainment.
Of course, there are many challenges for practitioners in smaller firms, chief among them (aside from actually getting work) is the lack of professional support. However, there are now many specialist consultancies, including Lex Conscientia, that are set up specifically to provide the sort of professional support that practitioners may have been used to in larger firms, such as IT, business development, marketing, knowledge management, copyrighting and, in our case, even recruitment. All this is to the good.
We believe that smaller firms will lead the way in establishing agile and flexible working practices allowing practitioners across the board to demand a better work life balance. Similarly, smaller firms will be able set the standard for extremely flexible and responsive client care. Larger firms, that have been dictating these practices for so long, may have to respond to these changes or risk losing not only talented practitioners (many of whom would be willing to take a pay cut for a better life) but also clients to smaller firms.