Profit a ‘dirty word’ in law, says Dragon’s Den judge

... And the point is?

Proof enough, for those who need it, as to what will be the priority in such firms.

Like 'Placidlawyer' I fail to see the point.

Perhaps Mr Caan should speak to a cash strapped Legal Aid practice where there is an almost desperate focus on trying to make money.

I suspect that in the current climate Mr Caan will soon be a senior partner, with an honorary law degree and seats on both the Law Society and the Supreme Court.

Uhh..yawn....

If only our President could storm the airwaves and tour the TV studios promoting the virtues of, and explaining the advantages to be enjoyed by clients, if a fully trained ethically based professional such as a solicitor is employed.
This would make a refreshing change from trying to justify regulatory fundamentalism

Who cares what he says? His comment about cutting the red tape demonstrates that he has no idea of the level of regulation to which law firms are subject. This piece simply illustrates the dangers of allowing outside investment into law firms. It's a pitiful example of reporting something simply because it was said by a quasi-celebrity.

The negative comments above all seem to indicate that seeking a profit from a business is at the expense of a high quality and committed service dedicated to clients needs. Why so?

If you went to a solicitor who charged you the earth and didn't give you a high level of service would you go back? No. So the firm makes a quick buck and loses the possibility of improved reputation and client attraction. It will not make a long term or significant profit in that fashion.

What Caan is saying is completely true, firms have to be looking to make money. That does not require pressure selling or high incentive sales and bonus schemes as alluded to with reference to the banks. It can and should focus on long term relationships with valued clients who FEEL valued and that they're getting value for money. That feeling and long term holistic relationship will only come through dedication to a client's needs and tailoring the service a firm provides to meet those needs and values.

Good firms who focus on client care and see the pursuit of profit as the objective of money grabbing con men will provide an excellent and committed level of service right up until they go bust, sell out or have a nervous breakdown worrying about paying the wages.

The pursuit of finacial wealth is crucial to a business. Excellent client care and client relationships is crucial to the long term pursuit of profit.

The answer to Me's question is that everyone already knows that the law is overburdened with regulation - so it's hardly news. The interesting new issue is the extent to which the new entrants will want to abide by the regulations, and the extent to which the regulators will be willing to take on the big boys? The precedents are not good. The FSA was well up to dealing with dodgy IFAs, but very much out of its depth with the banks.

My take on this is that "profit" calls to mind different things for Mr Caan and the majority of Gazette readers and that he is speaking about a general malaise of entrepreneurial spirit in an industry which, after all, IS an industry.

I would warn Mr Caan of the dangers of over-generalising. There are plenty of entrepreneurial lawyers out there and I feel that the next few years they will rise to the forefront. The legal industry needs open-book thinkers at the moment, I'm sure none of you would disagree?

I think the above comments demonstrate what Mr Caan is referring to...

Professionalism and profit are not mutually exclusive. It is curious to see that commentors take the view that professionalism and/or profit must be subordiated for the other. To my mind, the two can and should co-exist in equal measure

What happens in the new order to those clients who can't really afford to pay, but get taken on on reduced fees because they need help and we can probably find the time and justify not chasing the last ounce of profit? I am sure some of us still do this (though nostalgia may not be what it used to be).

Nostalgic

If he wants to make loads of money out of legal services he could set up a business of high flying business people and apply for a licence as an ABS. Then we could all sit back and marvel at his entrepreneurial genius at starting something from scratch and making it work. How difficult could it possibly be?

Why does he need to buy an existing law firm?

I have never seen a poor lawyer or barrister having been in business 32 years. They are all out to screw every penny out of you and make you pay thousands on account while your file gathers dust.
If they cant make profit then it because they are either having to fight clients off who are threatening to sue for poor work or overcharging (or both). I have seen some horrendous bills for work done as I also assist with Court work and cases brought against business colleagues and having conducted some heavy cases as LIP.
The more complex the more you get screwed the favourite accountants trick. I agree all businesses should make profit to survive, a basic principle. Giving sound and quality service is paramount which is sadly lacking today. I am not surprised that sites like solicitors from hell have been set up when clients get mugged with huge costs and end up losing everything they have worked for due to poor advice. The only people winning and in profit are the legal profession. James remember PROFIT CAN BE MANIPULATED BY ACCOUNTANTS.

I think the point here really is that practising law is not exactly a business or even a service industry for that matter. Practising law is a professional endeavour that is ruled by regulation, red-tape and a set of ethics and standards set by a body that its members are meant to honour. Private equity investors like James Caan are really just looking to make money in any which way they can. In South Africa, one cannot be an equity investor in a law firm unless one is in actual fact a qualified lawyer. I honestly believe that when outside non-lawyers get involved in law firms as equity investors it may indeed be a recipe for future disaster where it's all just about money-making at any cost and the underlying credo of being a good lawyer and acting in the client's best interest will be swept aside. That isn't to say of course that law-firms shouldn't keep up with modern times in an ever changing world and be more profit-driven, innovative and cost-efficient. The point here is that lawyers shouldn't lose sight that they are there only to serve their clients and to be paid a decent fee for this task. In a perfect world I'd love to some down on his luck hack lawyer go into The Dragon's Den and ask for say £250, 000 for 5% of his law firm which he just started. Now that would make for real entertainment and I'd just love to hear James Caan's investor questions about the lawyer's business plan and his profit forecast for the next three years. My bet is James Caan will say "I'm out" quicker than Andrew Micthell was forced to resign as chief whip after calling your coppers "plebs".

There are public expectations of a solicitor based on the notion that he or she is motivated by something other than raw gain.Being part of a profession implies wanting membership of such a body by virtue of the desire to adhere to a higher set of values.

Who can forget that palpable sense of excitement as a law student graduating at the same time Master of the Rolls Lord Denning wrote about his experiences in his book "the Discipline of Law?

Do law students today have that same sense of wonder about the majesty of the law?

Essentially solicitors as being part of a profession should possess some sense of altruism.

Solicitors express this sense of altruism by virtue of their involvement up and down the country in charities and other good causes. There is a sense of using skills learnt whilst being part a profession for the public good. The solicitor possesses asymmetrical knowledge .Knowledge is power but this power must be exercised ethically.

However there is nothing inherently wrong in a professional wishing to profit from his calling even handsomely.

This is perhaps at the core of the debate outlined above. It is surely all about delivering a new form of professionalism in a modern manner which is accessible to the public.

However, even though modern business practices are critical in any business model, profit must not be allowed to predominate, supplanting the altruism identified above.

It is interesting to note that in that great bastion of Capitalism the USA, students graduating from Harvard with MBAs take an oath similar to medicine's Hippocratic Oath to use their knowledge and thus power "wisely,kindly and well".

As a profession we need to re-calibrate our policies and formulate a strategy to re-connect with the public and assert our rich ethical heritage with the regulators despite the weakness of the Law Society hitherto. Even with the burden of poorly designed legislation things can be improved.

Remember the Statute of Frauds from your college days?

There is still a tide in the affairs of men (and women! )

Dear All

I have read the varied comments by contributers and the tosh written by (or attribute to) James Caan the business person motivated by the profit.

I have never known a lawyer who did not want to make enough to live comfortably on; does that count as wanting to make a proifit?

To quote from Adam Smith 5 June 1723 – 17 July 1790 the Scottish moral philosopher and a pioneer of political economy: -

"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."

So much for trade and profit and Mr Caan and self-love.

When some one consults a member of the legal profession they talk of their own necessities and it is a matter for the lawyer to find a way to meet them.

The legal profession, both solicitors and barristers, have come under much criticism over the years from various sources in particular the government and vested interests.

It is very very odd, bizarre in fact, that lawyers have come under criticism for makimg too much money (profit) and also are criticised for thinking profit is a dirty word.

The true problem is and the great misunderstanding arise because the world of lawyers contains a very mixed bunch. I was a solicitor so will deal with solicitors.

The usual set up is partnership because it usually is seen as a tried and tested system and a fair system with known progression. Work hard, make money, and you should become an equity partner entitled to a share of profits. If not you move on.

You get very small and very large firms (enormous international businesses) and all with a different ethos. I was a sole practitioner and a partner in a City based firm. Very different animals and at the opposite extremes one might think but both dedicated to service and clients above profit but they made money and the solicitors were well rewarded. Not all firm are like this and this is the problem.

All firms are tarred with the same broad brush as useless and inefficient and if not the other bush is used saying they are avaricous and mendacious and all said at the same time by government and the media and those who want to sell legal services for profit. A lose lose situation for solicitors.

As to those over paid barristers thay are beyond the pale ..... (Joke!)

It was said some years ago and this is food for thought that people need a well paid and independent legal profession to protect them from the excesses of government (and business). If the independence of the legal profession is eroded and the coporations take over where will it end.

As I say just food for thought.

Leonard Crane
Non-Practising solicitor

Yoohoo! Over here! Pick me! Pick me!

It is good to read the lively debate generated by Mr Caan's comments. I want to be in a business that is both professional and profitable. I see no contradiction between the two. But I wonder whether those who are commenting have missed the fundamental point about Mr Caan. That is that he is now investing in the law. The genie is out of the bottle and however much we dislike it we cannot put it back in. New players like Mr Caan are in the legal marketplace and are putting pressure on our traditional business model and our way of life. That scares many of us and means that we are reluctant to face up to these challanges and accept that major changes to the way that we do business are inevitable. Mr Caan and others like him are going to kill the traditional partnership model. Yes, we have to remain professional but we can only do that if we run a sound enterprise using the business skills that Mr Caan and so many other business people possess. This debate demonstrates that it is time for change.

I fear the consequences of this concept - is it something well know to the CEO?

I welcome the Mr Cann's of this world.

As a lawyer who came from industry initially there is nothing more frustrating than a law partnership in terms of its ability to restrict enterprise and an entrepreneurial spirit.

If for one moment Mr Cann was suggesting a compromise to professional standards there would be an issue. He is not he is stating that a law firm is a business as well as a profession. I

Mr Cann is a commercial entrepreneur and his interests lie in commercial law firms. A commercial law firm needs to be profitable otherwise it cannot exist and the concept of strong client relationships and good service is simply right and proper no matter who is your client. I have never met a law firm partner or any lawyer who expects to work for free in any commercial law firm.

To state that the profession cannot learn from industry is quite simply "arrogant". Lawyers have a lot of knowledge and skills but by no means do they know everything. To have a collective of a group of people who all think in the same way and agree with each other without being challenged is outdated and not conducive to creative thinking and in fact even higher standards.

Change is good and is everywhere. What is a partner anyway if they are not sales orientated these days with the pressure to bring in work.

As the guy retained by Knights to help them grow and who put a lady in there in just over one week I can assure you the shake up at Knights is nothing short of staggering. There is no red tape. They move faster and make decisions quicker leaving rivals behind. They have a plan that's achievable. And realistic. James Caan and his approach is unquestionably working for Knights. And David Beach's leadership is innovative and inspiring. It won't work for everyone - it's a mindset. After all how many firms would go external to appoint a new MP from outside their ranks? Brave. And other firms should take note. Knights is talking the talk and walking the walk.

Someone please tell me that Headhunter's post is just a windup, please..............

It's really difficult for eyes or cameras to focus on two different things. If you want one thing pin-sharp, generally other things become fuzzy.
I'm not sure it's possible to focus on professionalism and profitability.
If it's not, then I would prefer we focus on professionalism and not profitability - we can still be profitable, but better that that is fuzzy than that the professionalism is.
This idea that the marketplace is the be-all and end-all has wreaked terrible havoc with our society for 30 years now, the sound of babies being thrown out with bath water has become deafening.
It's entirely possible to build a hundred-million pound empire without an ethical bone in your body - hello, Rober Maxwell - so just because someone has a £420 million track record doesn't mean we should listen to him about how this profession should be run.
If the firm he has bought runs for several years without any serious complaints to the SRA then he might have proved that he can do both professional and profitable, and then we might listen.

To placidlawyer, anon675 and Patrick Stevens: first rule of a comeback - get your facts straight - so read the article again, and you'll see a quote for the context of my comments about REDTAPE!

.....said Caan ‘You have to cut the red tape in DECISION MAKING to unleash the potential.’