Can lawyers learn anything from Apple?

So this morning when I woke up, still in the fog of sleep, I thought I must have stepped back in time. Coming from my radio, without, it seemed, a hint of irony, was a discussion about whether lawyers should be allowed to operate for profit . Actually, it was more of a parallel-universe feeling than a going-back-in-time one because I’m pretty sure lawyers have been parting people from their cash since advocates in ancient Rome realised there was money in winning arguments.

Lawyers’ apparent distaste for commerce (it certainly can’t be said to be a distaste for money per se since some of them earn rather a lot of it) is a good part of the reason why today is at all noteworthy:  for October 6 is the day that part 5 of the Legal Services Act 2007 comes into force.  I know, it doesn’t sound like much, but it’s actually pretty revolutionary.  It allows, non-lawyers to own and invest in law firms for the first time.  I like to take some of the credit for the Act, so it almost feels like my birthday (without the presents).

Some parts of the Act are already in force, including the separation of the regulation and representation of the legal profession.  Thus over the last few months I have had the pleasure of witnessing the Solicitors Regulation Authority (SRA) flexing its independence muscles and getting into ever more heated debates with the Law Society, the representative body for solicitors (or as I like to call it, the solicitors’ trade union).  This independent regulation may be compromised somewhat by the fact that the Law Society is, absurdly, named as the regulator in the Act.  But it’s still quite a lot better than what we had before.

The Legal Services Board, the regulator responsible for overseeing the work of the SRA and the other ‘frontline’ regulators and making sure they remain independent, has been in business for nearly two years.  Complaints are also now handled independently, ending the profession’s own pretty catastrophic attempt to deal with disgruntled consumers.  And then from today, alternative business structures (ABS) finally come into being.

At least one of them did.  As reported on Legal Futures, a conveyancing firm has become the first ever ABS.  I nearly did little whoop of excitement seeing something I have spent years talking about finally come into being.  The firm, Premier Property Lawyers, is one of the largest conveyancing businesses in the country.  It somehow feels appropriate that the first ABS is a conveyancing firm, as they’ve been allowed external investment for ten years.  Even more pertinent, however, is that this part of the Act is all about improving the consumer experience and conveyancing is, I would think, by some margin the most common legal transaction.

To the outsider, ABS probably aren’t that exciting.  It’s really just a change to the way law firms are managed and financed, which probably doesn’t get that many pulses racing (and the SRA won’t be able to license any until end 2011/ beginning 2012).  As someone who has worked in a law firm I can only say this must be a good thing.  Trying to be dynamic and innovative is pretty difficult when it’s subject to the natural conservatism and risk-averse nature of most lawyers.  Put more than one of them in charge and you are asking for trouble.

So, back to the voice of intransigence from the radio this morning.  Turns out he was the honorary secretary of the Sole Practitioners Group (I think the title says it all).  Like many I have come across in my journey through the legal sector, he seemed to think that only lawyers are capable of behaving morally and ethically in the business environment (coal miners compensation scheme anyone?) and that somehow relaxing the restrictions on legal businesses will let a whole host of inappropriate types run law firms.

This is a rather absurd argument – as if solicitors never get struck off.  But not anyone is going to be able to own a law firm, there will be checks and controls.  His other argument that, apart from a couple of states in Australia, the UK will be the only country allowing ABS is also absurd.  Someone has to take the plunge and go first, otherwise nothing ever changes.  On the day when we lost Steve Jobs, one of the greatest innovators of all time, it only seems right to quote him: “Innovation distinguishes between a leader and a follower”.

I know the sole practitioner guy is probably fearing for his business, at least he should be.  That’s fair enough, but my interest is in consumers getting a better deal and I’m not at all bothered whether that’s from Tesco, the Co-op, Quality Solicitors, Google law or Smith and Son on the high street.  Consumers should be able to choose how, where and when they buy their legal services and, while there has already been some diversification, ABS should enable that to pick up a pace (even if it’s not yet a sprint).

No-one knows what impact ABS are going to have on the legal market or what sort of innovation will arise from real competition between providers (as opposed to lots of old-hat high street firms just offering the same thing under a different moniker).  In this most opaque of markets, consumers certainly don’t yet know what the revolution will bring.  As another great innovator, Henry Ford, said on building his first car: “If I had asked people what they wanted, they would have said faster horses.”

Legal services aren’t quite as exciting as cars, but as the market develops consumers will start to realise they have a choice and exercise it, driving further change.  Some firms, probably those wishing they were still back in ancient Rome, won’t survive.  I’m not sure there are many parallels between Apple and the legal services market, but if there is anything we can learn from the genius of Steve Jobs it is surely that there is really only one way to get and stay ahead:  innovate.

Posted in: Legal services

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