Lawyers rarely win popularity contests. For many clients, buying legal advice is close to a distress purchase. I confidently predict that, over the next few weeks, we will read articles in newspapers about the escalating profits of law firms. It is that time of year.
Well, hold it right there. It is time to stand up for ourselves. Before the frenzy begins, remember that the 20 largest London-headquartered law firms generated total revenues of £8.3bn last year and that 40% of these were outside the
Lawyers crave competition. One reason that the
Let’s also take our hats off to the legal press. Love them or loathe them, the transformation of law firms into the businesses they are today can be traced to the advent of profits per partner league tables. Law firms started being run like businesses when their results began to be published. Suddenly, we could all see how well we were being paid compared to our mates from university. It hurt, so we did something about it. My firm’s profits per partner have increased by 150% in the last eight years. Thank you to the press for making it possible!
It is also worth remembering that, while so much attention is being paid to the impact of the credit crunch on banks and the mismatch between their reward systems and shareholders’ interests, law firms operate as partnerships, investing their partners’ money. This is genuine risk capital. The partnership model provides for perfect alignment between business success and personal reward, for better or for worse. The market that we operate in is a free and fair one, in which our clients have plenty of choice. And we have been doing this successfully for a very long time (since 1779 in our case).
My next job is going to be as executive partner of CMS. It is the fifth-largest legal service provider in
