27 Oct Big change brings big opportunities according to mid size law firms
The changing legal services market offers big opportunities to mid size firms, according to managing and senior partners attending this year’s LawNet conference.
But the firms also said that if they were to benefit from the opportunities, they needed to develop a stronger strategy, must look at restructuring and would need to become more specialist.
Over 60% of the firms believe they need to be at least a third bigger, with a further 24% looking towards at least a doubling in size.
National brands, new styles of service delivery and price competition are seen as the biggest threats in the market.
And as the first reports reach the market of equity funding deals for legal firms, including the majority shareholding taken in the QualitySolicitors brand, almost 60% of LawNet firms said they would accept such non lawyer equity investment. And when asked what they would do with a £250,000 cash injection, the firms would be most likely to invest the money in brand development and business development, closely followed by hiring a professional CEO or other professional managers.
All the feedback from firms came through on the spot questions posed by speakers Nick Jarrett-Kerr and George Bull at the conference, tackling a range of key strategy issues, with instant feedback from the floor using audience response keypads.
The full list of topics surveyed and the responses:
|
Does your firm need to become more specialist to win higher value work in future? |
|
| Hardly at all, we have about the right mix |
13% |
| Nearly there just honing skills in a couple of areas |
24% |
| Made a start, work in progress |
43% |
| We are too generalist, all departments need to develop |
20% |
|
Does your firm need to grow over the next three to five years to remain competitive and profitable? |
|
| Hardly at all, we are just the right size |
16% |
| At least a third bigger |
59% |
| Double in size |
15% |
| More than double |
10% |
|
How would you describe the level of ambition amongst your partnership group? |
|
| Highly ambitious and entrepreneurial |
10% |
| Mainly focused on defending our current position and profitability |
34% |
| Cautious and comfortable |
4% |
| A complete mixture of views and levels of ambition |
52% |
|
If I were to invest £250,000 in your firm, what would you spend most of it on? |
|
| Laterally hiring more partners |
14% |
| Paying out non-performing partners |
9% |
| Hiring a professional CEO or other professional managers |
22% |
| Building IT infrastructure |
16% |
| Developing our brand and business development |
38% |
| Bigger offices |
1% |
|
Which one of these pressures is the greatest threat to the solicitors’ profession? |
|
| New entrants |
16% |
| Evolving client (customer) expectations |
7% |
| Price competition |
28% |
| New methods of service delivery |
22% |
| The power of brands and advertising |
24% |
| Consolidation |
3% |
|
Do you feel your firm’s strategy is adequate to meet the challenges of the new market? |
|
| Yes |
40% |
| No |
60% |
|
Over the next 3 years, do you expect that your firm will restructure in response to the LSA? |
|
| Yes |
61% |
| No |
39% |
|
If approached by a new investor, would your firm accept non-lawyer equity investment? |
|
| Yes |
59% |
| No |
41% |
|
The restructuring of the legal market is going to bring big opportunities for my firm: |
|
| I agree |
80% |
| I disagree |
8% |
| I don’t know |
6% |
| I’m going to retire |
6% |