Wood said he does not believe the economic climate is as influential on the success of a law firm as has been claimed.

“Economic times don’t matter as much ... it’s a hard market out there for all law firms,” he said.

“But there are opportunities ... if you’re not too greedy about it you can create a successful business and help clients to maintain a successful business.”

More than 90 per cent of the firm’s fee revenue comes from insurer clients, who tend to call the shots when working with firms, said Wood. He described these clients as “sophisticated volume procurers of legal services” that have the power to constrain lawyer rates.

Consequently, Wood has observed growing competition among firms in the insurance market as clients scrutinise the value that lawyers deliver. Demonstrating this value by assisting clients with their business objectives is the key to firm survival, he continued, not alternative fee arrangements (AFAs).

“Insurers trying to rationalise their businesses and make a buck in this market ... regard the hourly rate as a reasonably controllable beast because they govern it and they don’t let their lawyers govern it so much,” he said.

“They can do that because they have the volume of work to hand out.

“The fuss that surrounds AFAs at the moment is driven by the $600 or $700 an hour charge for a partner, plus $350 for a senior associate and $200 for a lawyer, so you’re probably paying a rate of $1200 – if I was paying that I’d probably want an AFA as well.”

That hasn’t stopped Gilchrist Connell offering AFAs to clients that request it, Wood pointed out.

The 50-strong firm has more than doubled in headcount since it launched in 2008, which Wood credited, in part, to mergers in the legal market.

“Opportunities like that are what we exist on,” he said, referring to insurance practices being downsized or dropped altogether by large firms rationalising their business in the wake of a merger.