Personal injury firm Thompsons has defied years of legal tradition by becoming the first major law firm to structure itself as a plc.
After the changes partners will no longer have the power to vote on major decisions.
Thompsons has appointed a three-member executive board and is currently electing a supervisory board which will ensure that the executive board is accountable to the partners.
Geoff Shears and Frank Foy, the firm’s senior managing partners, have been appointed chief executive officer and chief operations officer respectively. Stephen Booth, who was previously with Thompsons on an interim contract, has been appointed chief finance officer.
The executive board will be responsible for the day-to-day running of the firm, but the supervisory board will oversee issues relating to policy and strategy. Decisions will be made according to a straight majority vote.
Booth says that the supervisory board, made up of three elected regional members, a non-executive chairman and two non-executive directors, will act as a control.
“The executive members are in a minority and therefore subject to the scrutiny of the elected representatives,” he says. “The ultimate sanction for the partners is to use the supervisory board to sack the executive directors.”
Booth says the partners unanimously agreed to the change in structure. He says the move is designed to devolve greater responsibility to the regions.
“It will give them more power but it will also make them feel more responsible for their own operations,” he says.
It is expected that the three elected members will represent the North, the Midlands and the South. The two non-executive directors will have a trade union and a legal background respectively and the chair will have a strong business background.
The move is also a response to the Civil Justice Review (CJR) which has opened the personal injury market to non-law firms which offer no-win no-fee compensation claim services. Not only does this increase competition for law firms but it may also decrease union membership if members decide that the claims firms offer the same service.
“The CJR means that we need to be commercially aware and deliver the highest quality service to our union clients. We need flexibility. We need managers to be able to implement policy rather than be bound by strict and rigid rules,” says Booth.
Shears says: “The partnership model is inherently flawed in the context of the changing legal and business environment. Our new structure will give us devolved responsibility and greater efficiency and accountability.”