Small firms will continue to provide the backbone of legal services – but they may look different in the future, Law Society president Jonathan Smithers (pictured) told a conference session on the role of bar associations in supporting small firms.
Smithers set out a grim list of challenges facing practitioners, including legal aid cuts, online competition from unregulated providers and the difficulty of finding affordable professional indemnity insurance. But he cautioned against joining a ‘race to the bottom’ on prices. Research for the Society’s Small Firms Division showed that 60% of clients found specialist knowledge the most important factor when choosing a legal service provider.
Smithers noted that fixed fees had become a reality across the sector, particularly in family law after most family work was taken out of the scope of legal aid. He gave a cautious endorsement to unbundling as a way of extracting ‘some value from clients who otherwise might not be instructing a lawyer at all’.
The ‘virtual firm’ and other innovations based on technology might also provide routes to survival, he said.
Robert Millard of consultancy Moller PSF reinforced the message of embracing technology and of the value in specialisation. ‘I don’t think clients are impressed when you say “we can do anything”,’ he said.
However, he was challenged by Steven Richman of Clark Hill in New Jersey, where 67% of lawyers are either solo or in two-three lawyer firms. ‘General practice is itself a speciality’, he said. Apologising for the US sporting metaphor, he said that when sole practitioners lacked specialist expertise they still had a role ‘quarterbacking the case’.
Meanwhile, a speaker from southern Africa painted a vivid picture of the situation for small firms in the developing world faced with competition from international giants. Linda Kasonde, vice-president of the Law Association of Zambia, pointed out that Zambia’s largest firm has just 20 lawyers.
However, the sector is facing a new ‘scramble for Africa’ as international firms establish local presences to serve inward investors and other commercial clients: ‘They are starving local lawyers of work and the ability to specialise; they risk becoming secondary players in their own market.’
She said it was the duty of local bar associations to ‘harness, protect and promote’ local talent.