Rowan Williams, partner, warned the Legal Services Act will bring large opportunities to firms outside legal services, but said agreeing strategy, business model and firm structure is key to making any partnership work.
“Lawyers very rarely get into legal practice because they want to run a business or are expert financial managers,” she said.
“But if you’re looking about, before you jump into business with a firm, make sure the culture is right because lawyers don’t like change, said Williams, speaking at Goldsmith Williams’ Legal Services Act conference yesterday.
In one example, she said partners, due to the collaborative nature of Limited Liability Partnerships, expect to be involved in decision-making, so top-down decisions may be met with resistance.
Williams also warned advice firms against buying into law firms where the intellectual property, or people, were the basis for the price.
“People at that firm can be recruited away,” she said, “so be very clear exactly what you’re getting into,” she said.
A survey suggested legal firms expect and are ready for change, but are less clear about the types of partnerships to form or other crucial details like type of business structure.
Respondents felt they either had a good or partial understanding of the requirements of outside investors, although confidence levels had fallen in recent months, said Williams. Just 28% of the 100 law firms polled by Baker Tilly thought the Legal Services Act would have a positive effect on their business.
Later, John Llewellyn-Lloyd, head of mergers and acquisitions at Espirito Santi Bank, said WH Smith has already linked up with Quality solicitors to offer 200 solicitors in-shop services.
“When the market de-regulates, actions occur five times as quickly as pre-regulation. The economics are more brutal and happen faster than you expect,” he said.
