Graduate divas – don’t you love them

Why am I not surprised at Catrin Griffith’s leader in The Lawyer, Why the law’s no safe haven.

. . . for a generation that has been raised on tales of riches, it will take a while for reality to sink in. Indeed, plenty of graduate recruitment heads are privately frustrated at Generation Y, which has been used to having everything on a plate, and hope the credit crunch could be the making of its members.

But perhaps the real reason why “opportunities for those entering the profession now look rather more limited” is less about the credit crunch (though that undoubtedly is a factor) and rather more about what the future of legal services in the UK may be. It comes back to Stephen Mayson’s warning, “too many qualified lawyers, too many law firms” (see my earlier post, The C word, but which one?).

. . . and as for generation Y lawyers, see Jordan Furlong’s post in Law 21 back in May, How to work with Boomer lawyers.

The C word – but which one?

The accelerating downturn, and the UK property market (both residential and commercial) hitting the buffers, has already started to change the legal market. Leaving aside the rumours of cash calls and firms in trouble, the middle market consolidation is starting in earnest (for example the recently announced merger of Withy King and Marshall & Galpin, to say nothing of the gossip circulating about who is talking to whom; or more interesting, who is not being talked to.)

It is an appropriate time to revisit Legal Services Reforms: Catalyst, Cataclysm or Catastrophe by Stephen Mayson, Professor of Strategy at and Director of the Legal Services Policy Institute. In his March 2007 review of the legal services marketplace (inefficient, ripe for reform) Mayson summed up its health as follows,

My diagnosis so far, therefore, is that we have too many qualified lawyers, too many law firms, and too many equity partners.

Later he identifies consolidation as a one of the key themes for the future, highlighting ‘the need to reduce the number of firms . . . in the interests of quality, consistency, efficiency and cost’.

Well, this is already happening and will gather pace. Mayson identified one of the drivers as the ‘natural forces of competition’. I would add to that diminishing fee income, the cost and, at the moment, the availability of borrowing, and the demographic imperative. To say nothing of the Legal Services Act, and the arrival of new entrants into the market.

Who is shaping our brave new world?

Picking up on my immediately preceding post, an excellent article, The road ahead, in The Law Gazette on the future of legal services.

In the present turn down it may sometimes seem difficult to look beyond the month end figures, but long term survival requires it, to say nothing of what the up and coming generation expects.

I cannot do better than paste in the final paragraphs,

For Susskind, the questions he always poses to the profession are: why is it that people pay lawyers good money? What value is it they’re bringing? The best answer he has seen comes from accountants KPMG, whose global mission statement is, he paraphrased, ‘we exist to turn our knowledge into value for the benefit of our clients’.

‘I think it’s a fantastic way of summarising what all of us as professional advisers seek to do,’ Susskind concluded. ‘We have knowledge, expertise, inside ideas that clients want to apply in their circumstances. It doesn’t say we exist to supply one-to-one consultative advisory service on an hourly billing basis…

‘The thing I want people to think about in the future is in the legal market we have to strive to find even more imaginative and creative and, I suspect, cost-effective ways of transferring our knowledge to our clients in a way they can apply in their circumstances.’

To do so, we also have to work out our strategies taking into account three or four key issues

1) The future will not be more of the same. Read Futurewise, Six Faces of Global Challenge by Patrick Dixon.

2) The market for legal services is not effective: if you haven’t yet read Stephen Mayson’s paper Legal Services Reforms: Catalyst, Cataclysm or Catastrophe, you should. The problem? ‘An oversupply of qualified people without a corresponding increase in “qualified lawyer” work’; the result? ‘Too many qualified lawyers, too many law firms, and too many equity partners: and a market ripe for reform. . . [leading to] consolidation, merger, and, occasionally, failure’.

3) Legislation is simply accelerating inevitable change: the Legal Services Act will open the profession to new entrants, but technology, the great driver of change, is already altering the way our clients seek and take legal services (and this takes me back to The mobile lawyer, posted yesterday).

4) The aspirations and expectations of the next generation, and the one following them, are not the same as those of us who currently determine the course of law firms.