Is “profit” a dirty word in law?

A very interesting article was published online  this week in the Law Society Gazette. It centered around the investment made by James Caan in Midlands firm Knights. Caan explained how he “encountered a profession dogged by the partner structure, failing to build a lasting relationship with clients and with too little focus on making money”.

Home » James Swede » Is “profit” a dirty word in law?

A very interesting article was published online  this week in the Law Society Gazette. It centered around the investment made by James Caan in Midlands firm Knights.

Caan explained how he “encountered a profession dogged by the partner structure, failing to build a lasting relationship with clients and with too little focus on making money”.

To my mind, this perpetuates the myth peddled by some of the new branded entrants into the legal sector who are attempting to persuade the unknowing public that law firms are archaic entities with dinosaurs as partners, none of whom understand how to run a business to make a profit, presumably because they engage in the altruistic ways of the old fashioned, much revered lawyer.

Yes, times have changed but peddling this myth is self serving for those that do so. They want the outside world to think lawyers are like this because they want to promote their brand. I don’t blame them in a way but in the real world there are many law firms outside the so called Magic Circle which are well run, provide a good service, develop long lasting relationships and make good profit.

The one thing I agree on is “profit” is indeed not a dirty word. It is what those of us who took a risk in setting up and running our own business live on. Without profit, we have no business. However, with professional services, there are limits to profit. Some of the new entrants to the market seem to believe that purely process driven law is the answer, an almost call centre mentality, pile it high, sell it cheap, as a commodity. This will never be the case, and value is important, as is the quality of advice and experience. Whatever the criticisms of law firms, some if which are still behind the times, experienced lawyers know that “one size will never fit all” and there have been previous, unsuccessful attempts to commoditise conveyancing with so-called “conveyancing factories”.

In truth, a balanced approach is needed. Many law firms are belatedly waking up to new business and technological realities, but a business person investing in a law firm who thinks law is just a business like any other is likely to find out some home truths also.

At Darlingtons we run our practice along two lines. We have the traditional, long established repeat business developed by our fee earners over many years hard labour and networking. Alongside that, we have invested heavily in an online strategy focused at winning business over the internet.

I also take issue with the suggestion that the partnership model holds back firms from expanding. At a certain size of business, an outside CEO or MD is not always the answer and there are plenty of lawyers capable of developing and implementing growth strategy by various means. The new legal brands would have the world believe us dinosaurs are incapable of anything other than burying our heads in the sands. Certainly in our case nothing could be further from the truth and I can’t believe we are the only ones!

Caan quite rightly says there should be one chief executive, one decision maker. To a certain extent I agree. Most good businesses will identify and retain that person and utilise their talents but in my view the secret of good management is  that one should provide strategic vision , consult on this with key people, and then find a way to bring the fee earners with him on that journey.

There are bound to be further investments made by people such as James Caan and further branded entrants into the legal sector, but in my view there remains room for partnerships that have a well developed strategic vision, know how to get out there and win business and, to use the dirty word, make a profit.

 

James Swede

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