Mark Ellis (pictured) has just sold his unregulated legal services business, specialising in employment law work, for £61m. He will be the envy of many lawyers! His practice has value because he built it that way.
Does your practice have value? Who is it valuable for?
The suggestion is that you can't do what Mark did in a regulated law firm. I'm not convinced.
I concede that it's impossible in a regulated partnership law firm. That's because that business model is from the dark ages and the partners who buy into the equity (often with personal bank loans) actually own no real equity. They don't even have a say about what happens to their clients when they "retire" - because clients "belong" to the firm. It's as outdated and offensive to clients as are restrictive covenants that seek to fetter a clients choice of lawyer by focussing on restrictions on trade when that lawyer moves firms.
I digress. Back to realising value in your practice in a regulated law firm setting. I know it's possible.
How do I know?
Well, because I have seen other regulated businesses do it - for instance in the financial services sector - where valued clients are ensured ongoing service with a new adviser who is motivated to care for them. Motivated by professional standards and motivated because they have paid a capital sum to take over the client base from a "retirer".
So, when we created the foundations of Carbon Law Partners one of the main features was around retirement and value - based on fairness and rewarding skill and effort.
Firstly, a lawyer should retire from their practice when they want or when they are no longer competent. Not when they reach an arbitrary age that is set to ensure the continuity of an outdated business model.
Secondly, if there is a value in their client base, because they have truly looked after individuals and businesses, that value should accrue to them.
So we built "Partner Practice Value" - retire when you wish on your own terms. Simple. That could be when you are 35, 45, 55, 65, 75, 85...you get the picture - any age for any reason when you want to stop practising law.
Clients don't need to forego regulatory standards to find great lawyers who they know are building a business from doing great work.
That said, it's still hats off to Mr Ellis!
“Build a book of recurring business in those areas where you can do so, demonstrate strong renewal rates, successfully cross sell non-fixed fee services to the fixed fee book, build a reputation as thought leaders, invest in state of the art digital marketing, build a strong flow of inbound leads, build a successful sales conversion process – to demonstrate strong new business growth that is not dependant on individual lawyers – invest in great customer relationship and case management software, and focus on quality whilst also measuring cost to serve, cost to acquire and client profitably.”