If there’s one thing that the last year has shown us, it’s that remote working and flexibility can have huge benefits for many industries and their workforce and none more so than the again flourishing legal sector.
Increasingly, we’ve seen a trend of both lawyers and their employers embracing a more agile way of working. Many are keen to see the changes that were forced by lockdowns and the pandemic in general become a part of “the new normal”. Amid this change, a relatively new model of law firm has developed from being an alternative to traditional law firms, to being a real competitor.
I’m referring, of course, to fee-sharing law firms, which have made use of changes in legislation to create an alternative business structure, which rivals the long-established LLP model. Firms such as Gunnercooke, Keystone, Bexley Beaumont, Setfords et al. have emerged over the past five years or so, securing impressive major clients and making eye-catching partner hires from some of the UK’s top LLPs.
Over the years, the growth of these new firms has been impressive. Keystone Law is listed on the AIM stock market with its share price rising by 26 percent since the start of December 2020 (201 percent in the three years they’ve been listed). Gunnercooke welcomed 44 new partners in 2020, many from Top 50 “City” law firms. This trend has been projected to continue, with the investment bank Arden predicting that by 2026 a third of all lawyers will be operating under this model.
From a recruiter’s perspective, it’s been very interesting to witness this growth and be invited to assist with engineering further moves by introducing partners with considerable followings to this new way of working (that many hadn’t previously considered) and setting up introductions for exploratory meetings. Having an entrepreneurial streak, I enjoy having such an attractive option to put to successful lawyers that will allow them to develop both professionally and financially very quickly, taking control of their own destiny.
For a partner with a good client following, aside from the obvious draw of being able to take home (on average) 70 percent of all their billing, there are numerous other potential benefits. I will highlight some of these in detail:
Flexibility
A phrase that has become almost a buzzword in recent times, most law firms can now offer flexibility with some agile/remote working and often part-time hours. One of the main distinctions between that form of flexibility and the kind offered by a fee-sharing model is that you also have the flexibility of choosing how you work and when you work. For example, a partner within one of the fee-sharing firms we work with takes a month out to go skiing every winter, no questions asked.
Support
An often-held misconception of the fee-sharing model is that working for yourself on your own desk can be isolating, operating in “silos” with limited collaboration. The consensus that we have seen from partners in these models is that they find themselves referring work throughout the business as required and get to know the other partners well. Gunnercooke, as an example, held over 150 virtual events and ran a successful “Coffee Roulette” programme throughout 2020, where partners would be randomly assigned another Partner to have a coffee with over video chat.
On a professional level, partners are given expert business development coaching, offered immediate help with bringing their clients over, have access to a “pool” of associates (or can hire their own) and back-office support.
Many of these firms have also established offices in major cities, with further plans to expand. Those who prefer to meet their colleagues face-to-face will (hopefully) once again be able to do so.
Escape from “Bureaucracy” and “Internal Politics”
One regular reason offered for why many partners decide to make the move from a traditional law firm is to avoid the bureaucracy of having to get approval/sign off to develop their ‘business’ in a certain direction and to avoid the hierarchy of some firms, where internal politics take up a lot of time.
Some tell us that although they are consistently successful, they are increasingly dissatisfied with the constant and increasing billing pressure. In some cases, partners who experience an excellent year of billing will then be put under further pressure to do even better the next year, often facing remuneration committees and being required to justify their billings. As a self-employed “consultant”, the onus is on the partner to self-motivate and the pressure comes from within.
Client Satisfaction
In the case of some partners, who had taken a step back from regular client contact in favour of managing their departments and training juniors, a self-employed model allows them to deal with their clients directly again. With that comes a great deal of satisfaction for clients, with more regular contact as well as satisfaction and enjoyment for the partner. Gunnercooke, for example, has achieved a Net Promoter Score (NPS) of 90, which is among the highest of law firms around the country.
(NPS is the percentage of customers rating their likelihood to recommend a company, a product, or a service to a friend or colleague).
Conclusion
Even with the above in consideration, making the move from a fairly secure situation as a salaried partner within a top law firm to the relative uncertainty of client fees making up your entire income, is no doubt a daunting prospect. To make the leap, it does require a great deal of confidence in yourself and your client following. However, if this is the case, the reward can definitely outweigh the risk, when coupled with the right attitude and excellent support. There are many examples to demonstrate this as the new fee-sharing model is working so well for so many.
If any of the above has piqued your interest and you are a partner with a good client following, please don’t hesitate to contact me. I would be happy to address any questions on a completely confidential basis, and if appropriate, make the necessary introductions to allow you to further explore the possible options.
