Powered by
MOMENTUM
MEDIA
On its current growth trajectory, Keypoint Law could well become the biggest Australian law firm by partner-level lawyers. Here, its CEO explains why market conditions are so favourable for the firm’s disruptive model.
Speaking recently on an instalment of Legal Firesides, produced exclusively for members of Lawyers Weekly Premium, Keypoint Law chief executive Warren Kalinko discussed how his firm may soon be one of the biggest in the country by partner numbers, how and why the traditional partnership model needs upending, and how AI is accelerating certain trends in the professional services marketplace.
In the same conversation, Kalinko argued that, as law firms continue to invest heavily in new technologies and, in turn, rethink how they price their services, they should avoid charging for the use of new platforms, which he said will be viewed as “just a tool of the trade” by clients.
To this end, he said, “clients will get annoyed” if firms pass on AI costs.
Kalinko also reflected on the firm’s journey since its inception 12 years ago. Now operating in six Australian cities and across 25 legal practice areas, the firm is currently growing at a rate of one partner-level lawyer per month, having hired 12 such practitioners in the past year.
The firm’s disruptive model, whereby partner-level lawyers are paid out 70 per cent of their billings, is what’s driving such growth. “To my knowledge, no other firm [does this],” he said. Moreover, as far as he’s aware, Keypoint is the “only national law firm to operate without the financial micromanagement that drives lawyers into disliking day-to-day legal practice. So, no billable hour targets, no budgets, no recording of one’s day in six-minute units and management timesheets, and the internal politics and competition that comes with traditional firms.”
“I don’t think the conventional partnership is rewarding salaried partners and fixed draw partners in a way that’s commensurate with the value that they generate,” Kalinko said.
“It’s certainly not offering the level of practice autonomy that is something that the modern professional really does want. People want to be in control of their own lives and how they work. And when you’re under the thumb of the managing partner, so to speak, and you are subject to all these different financial micromanagement levers, it is the opposite of that. And so, that I think takes away from the satisfaction of practice.”
Given the “incredible trajectory” of growth in its senior practitioner ranks, Kalinko said that Keypoint has the potential to become the largest firm in the country by partner-level lawyers in the years to come. At this rate, he said, it’ll be in the top 10 in the next five years.
There’s real momentum, he said, which reflects how the profession is changing and what senior lawyers are currently looking for.
When asked whether he’s aiming for Keypoint to be Australia’s biggest practice, he said yes, but not at the cost of quality, noting that the firm has been deliberate about who it wants to hire. Bringing on 12 new partners annually is a “standard growth rate for us”, he said, but there’s every possibility that it could double to 24 new partners per year.
Reflecting on the market, Kalinko said that many partners have branched out on their own, “not because they want to be by themselves in the isolation of sole practice, but because they’ve just so disliked traditional partnership”.
There’s a “kind of rejection of the traditional law firm model” going on, he said, that feeds appetite for models that combine the strength of a national business and offer freedom for individuals. Such potential has come to fruition in Europe, he pointed out, and there is no reason, in his mind, why it can’t also work Down Under.
Kalinko is bullish to the point that he “can’t see any particular obstacle” that would prevent the firm from continuing on its current trajectory. The advent of AI, of course, is a disruption that the entire legal profession is having to grapple with – which he called “the biggest story in terms of legal practice that we’ve had in decades” – but he noted that he sees it not as an impediment to Keypoint’s growth, but as something to be leveraged as an opportunity.
“I think AI is a great opportunity, particularly for a model like ours, is that clients will always come to law firms for the seniority, for the experience, for the judgement that comes with decades of legal practice. And that’s essentially what our model is built on,” he said.
“We’re essentially a top-heavy, partner-level service. And if you can have that approach supported by AI, it just means we can increase our productivity, increase our efficiency, and perhaps overcome some of the resourcing constraints that we have in a model that’s very top-heavy and somewhat deleveraged.”
“I think the firm of the future probably is a firm that is senior people with powerful technology. I think that is the future.”
