1. 4 August 2011 The Future of the Legal Profession – a 2011 perspective Sussex JLD Martin Richardson Professional Development Consultant, Law South

2. 4 August 2011 Solicitors – some historical facts (1) Sole practitioners and partnerships The Law Society – 1825 – the professions governing body The Partnership Act 1890 – regulated the partnership as a business entity The Companies Act 1948 – limited the number of partners in a partnership to 20

3. 4 August 2011 Solicitors – some historical facts (2 ) The Companies Act 1967 – removed the restriction on the number of partners The Limited Liability Partnerships Act 2000 – created the limited liability partnership (LLP) as a quasi corporate entity. Partners become Members. The Legal Services Act 2007

4. 4 August 2011 The LSA 2007 Enacted following the Clementi Report of 2004 Clementi set up with a view to recommending: - the opening up of the legal services market to provide greater competition - the abolition of the solicitors closed shop regarding the provision of legal services

5. 4 August 2011 Some key provisions of the LSA The setting up of the Solicitors Regulations Authority (SRA) and the Office for Legal Complaints (OLC) The creation of Legal Disciplinary Practices (LDPs) and Alternative Business Structures (ABSs) as new business entities for the provision of legal services

6. 4 August 2011 The tripartite management of the profession The Law Society – the solicitors representative body cf: BMA The SRA – deals with qualification, CPD and professional conduct matters cf: GMC The OLC – is the final arbiter on client complaints and consequential issues

7. 4 August 2011 The new business entities The LDP – permits up to 25% of the partnership capital to be owned by non- solicitors e.g. legal executives, senior managers, other professionals The ABS – any non-traditional partnership / LLP providing either core or ancillary legal services

8. 4 August 2011 Examples of ABSs The LDP Existing partnerships wishing to float and attract external capital, e.g. Irwin Mitchell Existing corporates wishing to add legal services to their existing product portfolio, e.g. The Co-op

9. 4 August 2011 Facilitating the ABS Replacement of the Professional Code of Conduct 2006 by the 2011 version OFR rather than prescriptive rules Based on the 10 mandatory principles of practice Authorised bodies, COLPs and COFAs Client focused Flexibility encourages entrepreneurs and external capital

10. 4 August 2011 Implementation All now implemented except the SRA licensing certificate for authorisation under the new regime 6 October now deferred ?by weeks only So ABS applications delayed

11. 4 August 2011 The effect of the LSA Existing firms Work specialisms Commoditisation Leverage and profitability Pricing Fee-earning staff composition Support staff composition

12. 4 August 2011 Existing firms Magic circle – no change Top 75 (50+ partners) – minor but focused adjustments to strategy and practice Niche practices – no change provided top quality and excellence Traditional High Street practices: - merge - be bought out (? by a corporate) - die Medium sized full service firms – merger mania

13. 4 August 2011 Work specialisms Death of the smaller full service firm Excellence in chosen fields of practice Build networks to support clients in other areas of work Ongoing strategic thinking to keep ahead of the game when new areas of practice start to develop The clients lead

14. 4 August 2011 Commoditisation Template practice Extensive and comprehensive use of IT Resi conveyancing, PI, wills and increasingly parts of more sophisticated areas of practice Potentially highly profitable This is what will interest the external capital

15. 4 August 2011 Leverage and profitability The right staff at the right level doing the right work Delegation to the lowest level of competence Team and project management / leadership become critical Applies to rocket science, widgets and everything in between

16. 4 August 2011 Commoditised work e.g. resi conveyancing Ps SFEs JFEs

17. 4 August 2011 Standard work e.g. basic corporate Ps SFEs JFEs

18. 4 August 2011 Rocket Science e.g. complex tax Ps SFEs JFEs

19. 4 August 2011 Pricing To reflect the type of work (see previous models) – commoditised cheap; rocket science expensive Time recording indicative not definitive Fixed fees, contingency fees and value added – or a mix Efficiency as well as effectiveness – will be a capital as well as client demand

20. 4 August 2011 Fee-earning staff composition FEWER SOLICITORS MORE PARALEGALS

21. 4 August 2011 Support staff composition Firm run as a business More professional executives Greater respect as a result Partners/members/shareholders not running the firm day to day Less junior staff; more fee-earner involvement in administration

22. 4 August 2011 To sum up... All change for some firms Increased competition Therefore must be increased efficiency Maximising use of IT Costs down; prices realistically competitive Business and commercial focus

23. 4 August 2011 Other SRA initiatives Work Based Learning (WBL) – a scheme currently being piloted and designed to take the place of the training contract thus enabling people from various backgrounds to qualify as a solicitor CPD – a review of the current system is in the pipeline

24. 4 August 2011 The Bar Increasing number of barristers working in firms Gradual demise of generalist chambers? Specialist Bar surviving, but... Merger of the professions in ?20 years Only prevented by tradition