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Lawyers warned to be the next entrepreneurs

Lawyers warned to be the next entrepreneurs

A MAJORITY of Australian firms ultimately take their lead from what other firms are doing, rather than what their clients would like them to do, according to a leading commentator on the legal…

A MAJORITY of Australian firms ultimately take their lead from what other firms are doing, rather than what their clients would like them to do, according to a leading commentator on the legal profession.

What other firms do is a “measuring yardstick” by which most firms judge what they should do next, solicitor, author and public speaker on the profession, Simon Tupman, told Lawyers Weekly this week.

As a result, clients are not receiving the best quality legal service and law firms are unable to identify themselves as different to their competitors, he argued.

“‘A firm down the road has gone and got itself some quality standards, therefore we might as well go and get them. Such-and-such firm is using a graphic designer for their ads, therefore we might as well do the same.’ Rather than breaking a new path, everyone is following everyone else,” Tupman said.

Tupman will be speaking next week at the Law Mastery Tele-Summit 2007 on ‘Why lawyers who start focusing on the business side of law will excel past their peers in the years ahead’.

The way firms bill clients is a major part of the problem, said Tupman, but also they are not innovative in what they call themselves, the way they deal with clients, and the way they are structured. Instead, he calls on all lawyers to be better entrepreneurs and consider how to better run their businesses, despite what everyone else is doing.

In the US, some firms are now overhauling the way legal firms are traditionally structured and are “completely reshaping their philosophy”, Tupman said. An example is the Summit Law Group, which has just celebrated its 10-year anniversary. The law firm claims to have “rejected the traditional law firm model” and “revolutionise the way legal services are provided to law firm customers”.

According to the firm’s own publicity: “Most law firms provide legal services in the same way that they did 25 years ago. Those firms focus on lawyers, not customers. Their practice model relies on large numbers of people billing large numbers of hours, often without regard for the value of the work to the customer. We reject that model”.

What the Summit Law Group did to their practice was quite “revolutionary”, according to Tupman. “They’ve abolished time sheets wherever they can; they’ve offered innovative pricing policies, including value adjustment policies. So, [they say] ‘here’s our proposed fee for the work — you’re free to adjust it up or down, depending on your level of satisfaction at the end’.”

But in Australia, most firms have been resistant to such change, according to Tupman, who recommends such changes in seminars for the profession. The reaction is usually less than positive, he said.

“Now, I take a suggestion like that and lawyers look at me in disbelief, as if thinking ‘these people are mad’. And I don’t think they are,” he said.

“My view is that the firms that are doing these sorts of things are in the minority, but I think the fact that some firms have gone down this path and they’ve had some success, should act as a great encouragement for many others to at least be open to the idea of making some alterations to the manner in which they practise.”

In an upcoming issue of Lawyers Weekly, clients will offer some insights into the types of innovation they would like to see from law firms, particularly when it comes to billing.

For many organisations looking for an appropriate firm to represent them, a firm’s brand is a shortcut to the sort of service that will be offered and what a client will be charged, said Bluescope Steel legal counsel, Marina Yastreboff.

But Yastreboff told Lawyers Weekly she would like to see in-house counsel more involved in the process of how their organisations are billed by law firms. Many corporations would like to see some innovation around how work is billed, she said.

According to Tupman, firms need to stop following the herd, but look at examples in good management from businesses.

“They need to be prepared to do something a little different that is refreshing to clients — instead of the same-old, same-old. If we look at well-run and established law firms, it’s very hard to distinguish one from the other.”

Queensland Law Society president Joe Pinder this week warned lawyers not to allow professional ethics to become a casualty of the increasing number of business considerations permeating their work.

“I think that there is pressure for the profession to perform as a business, so we really need to keep our eye on the ball about what we know the core values and obligations on us as a profession are.”

See Lawyers Weekly issue 332, out 6 April, for a report on billing and cost assessment.

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