Experienced City law firm partners will quit their firms in droves to set up a new wave of boutique practices once alternative business structures (ABSs) are available, leading market commentators are predicting.
Professor Richard Susskind (pictured) and Maitland Chambers chief executive Robert Graham-Campbell forecast that the flexible business models offered by ABSs will entice partners considering early retirement into forming boutiques – presenting a challenge to traditional law firms in retaining top talent.
Speaking last week at a Commercial Litigators’ Forum discussion hosted by magic circle firm Slaughter and May, Susskind and Graham-Campbell said that the flexibility afforded by ABSs to employ specialists, receive external investment and outsource work will drive the trend.
Graham-Campbell suggested that the new boutiques will be able to drastically reduce overheads to as little as 10% – the same as many commercial sets – and drive up profitability as a result.
New opportunities available to experienced partners would have consequences for traditional firms in retaining high-end talent, and could go on to affect the ‘expensive’ training methods employed by top firms, they suggested.
‘Retirement ages at the top 20 firms are quite young,’ said Susskind. ‘People retiring from these firms will still have plenty of game left, and many will want to size up the new business models on offer.’
Graham-Campbell suggested that large litigation departments at traditional firms might consider splitting up into smaller boutiques to prevent conflicts of interest arising.
The Legal Services Board recently announced plans to sanction ABSs from October 2011.