My Legal Life – Constantine Law
It Is Time to Do Law Differently…
After 20 years as an employment lawyer I thought: “there must be more to working life than this”, (i.e. the ever increasing hours, the ever increasing fee rates and ever increasing disgruntlement among staff). I also thought: “if, as someone who advises on the law of work, I can’t figure out a better way of working, then I can’t be much of an employment lawyer.”
The result is Constantine Law www.constantinelaw.co.uk , a thoroughly modern law firm, providing employment and business immigration advice to corporate clients. We have radically reduced our rates (I charge my main client less than I did 12 years ago, how many lawyers can say that?); staff work remotely and are empowered through high commission rates to win and do client work; we have slashed our overheads to make the firm more profitable. But let’s be clear: the main beneficiary to our new way of working, is the client.
Our approach stands in stark contrast to most of the profession. Law firms are failing to move with the times: they are failing to use smart IT to drive down costs for their clients; they are failing to use smart office solutions and technology to empower their staff; they are failing to engage imaginative external providers to find new solutions. The result? The unit cost of production remains too high; hourly rates are thus too high (and pricing generally is not imaginative enough). Most critically, staff are unhappy with their work/life balance, particularly partners and want-to-be partners. In turn, this feeds through to the quality of response and to staff engagement.
The good news is that there is a different way: provided that law firms embrace radical change by using the latest IT and smart external solutions to put the client first. First, I explain how we got here.
Traditional Law has two big problems – (1) cultural problems; and (2) financial problems:
- Cultural challenges to innovating
I have worked in two large national law firms. Both suffered from a top-down management structure where partners had no real “say” in the business. The real problem, however, was cultural: the employment department was a “small part player” in the firms, as a whole. This meant it was impossible to innovate properly. The time-lag between idea and action was always months, sometimes years. It is impossible to deliver innovative services to clients in such an environment.
I have worked in two smaller firms. They, too, had similarities: they did not have the time or resources to think strategically and this resulted in them always chasing their tails.
The solution? Excluding very big international firms, the future is in high performing specialists: firms with dedicated, senior people who are obsessed with researching and delivering clear solutions to meet a specific client need. This is all the more imperative, given the very urgent and turbulent times that we live in.
- Financial challenges to rewarding partners and staff
I wrote previously that the traditional pay structure for rewarding non-equity partners in law firms is fundamentally unfair and out-dated. The traditional third-third-third model cannot be justified (partners earn a third of what they bill, one third is overhead and one third is profit to the partnership). In two years of trading, Constantine Law’s fixed overheads are less than 10% of its turnover.
We work to a lean business model: (a) we have negligible non-productive overhead (no bloated support departments or unproductive partners); (b) we don’t carry fixed office costs as we meet in London’s leading business space www.theclubhouselondon.com (clients and staff love it); (c) all of our key support functions (IT, PA/Admin, Marketing) are outsourced to specialists.
This enables us to reward partners with double the rate of the traditional model. Omer Simjee (www.constantinelaw.co.uk/ourpeople) used one word to describe it: “Empowering.” He expanded: “I feel truly motivated to go out and win work, for me and my family.”
Partners work remotely: they see more of their families. They are happier. The model is particularly good for working parents.
And whisper it quietly: “no more management rubbish.” There are no more pointless internal meetings. We have a highly-focussed monthly CRM meeting chaired by an external specialist. Partners win the work, they do the work. Simple!
“What percentage commission do you get on bringing in a new client to the firm?”, I asked an associate solicitor, who I trained, and is now working at a respectable (they would say) entrepreneurial firm in the City. Answer: “3 per cent.”
At Constantine Law, we pay our employees 25% commission on new work that they bring in. Entrepreneurship should mean something choate: too often, firms pay lip service to it.
More fundamentally, our staff work remotely: unless they are working at either: (a) client offices; or (b) at the Clubhouse. What does this mean? Using cloud computing, Caroline Glacken, our senior associate (www.constantinelaw.co.uk/ourpeople) can do two productive days’ work from a villa in Brittany without taking holiday.
Here is a snap-shot of the pros and cons: “old law -vs- new law”
Old Law New Law
|Partners take home 1/3rd of billings||Partners take home 2/3rds of billings|
|High Charges to clients||Clients charged 50-60% of comparable firms|
|Cumbersome pricing structures||Innovative pricing structures|
|High overheads, particularly offices, staff, non-productive partners and support depts.||Low overheads. Engage specialists to do work. Pass on the reduced overheads as lower rates|
|Traditional remuneration for fee earners||25% commission on client “wins.”|
|Junior lawyers do most of the work||Senior lawyers do most of the work providing clear solutions for clients|
|Old IT, warehoused servers||Cloud IT/Saas Applications|
|Lip service to agile (often means “hot desking”)||Truly agile (bottom up view of working)|
Don’t Be Fooled by New Models Offering the Same Service
Various firms are setting up at present, offering new ways of working. Some will offer a number of the benefits listed above. Some big firms are claiming to offer “agile working”. The reader should not be fooled: some new firms may set out to ensure that lawyers benefit through: (a) higher “take”; and (b) more freedom/remote working. However, a law firm only truly re-engineers its service when the client benefits – i.e. through an improved service and a reduction in rates. Too few firms are passing on the reduction in their overheads to clients.
The Bottom Line
The bottom line is that all of our solicitors are evangelical about working for Constantine Law. Two years ago we started with one person, now we have five (and increasing) solicitors and others are joining. It is a better way to service clients and to live a healthy life, but it is not for the faint hearted!
This Working Life Is Not for Everyone: Only the Brave Need Apply
All bar one of our solicitors and support staff are self-employed. The “catch” (if you can call it that) is that solicitors have to generate their own income. My message is clear: “If you are a net contributor to your firm, you will be better off here.” (The opposite also applies). Therefore:
- Lawyers need an appetite for risk: to seize the moment and be genuinely self-employed (as opposed to “faux” self-employed like most Schedule D partners). However, I say that the greater risk is staying in a broken model, a combination of IT and new service providers will sweep away old-law in the years to come. Doing “nothing” is the greatest risk of all.
- Lawyers must want to have happier lives: I meet so many partners in firms who are fundamentally dissatisfied with their day-to-day working lives. Many are simply batting out time until retirement. Given that we work, on average, 10-12 hours per day, there must be a better way for highly skilled professionals to live. How we work impacts on our health and on our relationships. My view is clear: there is another way, provided that we are brave and want to seize the moment; and finally…
- The client must be the ultimate beneficiary: First and always.