find the latest legal job
Corporate Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Highly-respected, innovative and entrepreneurial Not-for-Profit · Competency based Board
View details
Chief Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Dynamic, high growth organisation · ASX listed market leader
View details
In-house Projects Lawyer | Renewables / Solar | 2-5 Years PQE
Category: Generalists - In House | Location: All Australia
· Help design the future · NASDAQ Listed
View details
Insurance Lawyer (3-5 PAE)
Category: Insurance and Superannuation Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Dynamic organisation ·
View details
Legal Counsel
Category: Corporate and Commercial Law | Location: North Sydney NSW 2060
· 18 month fixed term contract · 3-5 years PQE with TMT exposure
View details
Firms must alter business model to survive

Firms must alter business model to survive

Law firms must change the way they win work, the way they do work and the way they organise their leadership if they want to remain relevant, according to Beaton’s executive chairman George Beaton.

Speaking at the ALPMA Conference last month, Mr Beaton addressed four adverse forces affecting law firms beyond competition – supply of talent, clients increasing buying power, new entrants to the market and NewLaw substitutes.

In order to stay relevant, law firms need to alter their business model, he said.

Mr Beaton pointed to the differences between a firm’s business strategy and business model, stressing that firms must have both.

“Your business strategy is ‘who do we serve, what do we offer and what differentiates us’, in other words why should clients prefer us,” he said.

“But more important than your competitive strategy right now, because of the economics of practice, is the business model that you’re operating.”

Mr Beaton said a business model is based on three questions about how to make a profit – how do you win work, how do you do the work and how do you organise the leadership.

“What we know is that you can have a very successful competitive strategy and make no money,” he said.

“It’s getting harder and harder, and there must be a better way and the better way is going to be found in thinking through the lens of your business model and then in that business model how do you compete.”

Mr Beaton described how traditional firms have operated, comparing that to how they should be aiming to do things now, taking a leaf out of the NewLaw book.

First, in relation to winning work, traditionally firms have primarily operated through personal brands, with lawyers being both the sellers and the producers, and charging on hourly rates.

NewLaw firms, on the other hand, are corporate brands, separating sales from production and embracing alternative fee arrangements.

Second, when it comes to how work is done, firms have traditionally tried to attract the best legal talent, using sustaining technologies to make lawyers’ work more efficient.

However, the NewLaw way is to focus on business-savvy lawyers on flexible work arrangements, using disruptive technologies that are increasingly substituting for lawyers’ work.

Finally, in relation to the firms’ organisation, traditional firms tend to be partnerships with small numbers of equity partners to ensure maximum return per person.

But nowadays, NewLaw models are often corporately owned with external investment and they have the discipline of external shareholders.

“So what do you do? Do not ignore your business model and do not assume you have to keep what you have because it’s been that way for a decade or five decades,” Mr Beaton said.

He said if firms wish to stay relevant, they must discard their old ways and embrace NewLaw models.

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Firms must alter business model to survive
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
LCA president Fiona McLeod SC
Aug 17 2017
Where social fault lines meet the justice gap in Aus
After just returning from a tour of the Northern Territory, LCA president Fiona McLeod SC speaks wit...
Marriage equality flag
Aug 17 2017
ALHR backs High Court challenge to marriage equality postal vote
Australian Lawyers for Human Rights (ALHR) has voiced its support for a constitutional challenge to ...
Give advice
Aug 17 2017
A-G issues advice on judiciary’s public presence
Commonwealth Attorney-General George Brandis QC has offered his advice on the public presence of jud...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...