Leslie Perrin is managing partner of Osborne Clarke. He can be contacted at firstname.lastname@example.org
Let me take you to a far-off land and time – a land and time where law firms and clients have discovered a new kind of relationship. I want you to imagine that you are a business in this far-off land and time and you need to retain the services of a law firm.
The first thing that you will have to do is persuade one of these firms to accept you as a client. Not only will you need to apply in writing, but your application must be supported by a compelling business plan identifying the impressive directors running your business and detailing the sound basis on which your business is funded. Some firms will reject your application, ignore it, or bin it. But if you are lucky, one or two will invite you in for a beauty parade, at which point you can attempt to persuade them to accept the work you want to send them.
For their part, these firms will be trying to create a balanced portfolio containing a mix of long-standing clients and new ones, all with growth potential. They will conduct rigorous annual reviews which will result in an average of 20 to 35 per cent of existing clients simply being told to look elsewhere for advice because the firm is unable or unwilling to service them any longer. Some firms actually trade clients to firms considered to be second rate competitors. This may create vacancies for you as a new client at one of those firms but only if you satisfy certain rigorously applied criteria.
Feeling confident? First, you must confirm your willingness to vest at least 2 per cent of your share capital in the firm. (Some firms earn more from their stock holdings than from traditional fees.) A proportion of the shares obtained in this way is placed in a stock option pool for the firm's staff – to help attract and retain lawyers.
Besides vesting the shares, you will have to accept two more conditions if you are to be taken on as a client. First, that you will pay the firm's (very high) hourly rate monthly – in full, by return and without quibble. Secondly, that you accept defined, low standards of service, particularly in speeds of response, in view of the sheer volume of work that is available to the firm in the market.
Indeed, a UK firm visiting this far-off land in search of clients for its own business might even find itself retained to help clients find lawyers in the clients' jurisdiction. Now try imagining, if you can, that these firms pay starting salaries to newly-qualifieds in excess of £100,000. Then try comprehending the fact that, even at these rates, and with the assistance of share option schemes, they still have difficulty attracting and retaining lawyers. This is a land where, for many lawyers, the siren call of dotcom and internet start-ups has become irresistible, particularly when compared to the Roman galley work ethic of private practice. Worth noting also is that these lawyers tend not to phone in sick as they might do here – they phone in rich.
And does this far-off land exist? You bet your sweet life it does – across the pond in California. And when will all this happen? It's already happening, my friends! But it could never happen here, of course. Now could it?