Monday 25 February 2013
Cobbetts & HMV: The Lessons For Law Firms
Halliwells, Dewey and LeBoeuf and now Cobbetts. Three high profile law firms who have gone bankrupt in the last few years. If I am honest, I am surprised that we don’t have more law firms on this list. Perhaps this is because, as my good friend David Tovey says, professional service firms don’t go under, they just merge! In fact, I am not alone, in September 2012, the association of Business Recovery Professionals (R3) predicted that just under 25% of law firms were at risk of going bust.
However, if you look at big retailers who have gone into administration over the last few years, it is a sobering exercise. Companies with proud heritages and previously solid profit and loss accounts such as HMV, Blockbusters, Jessops, Clinton Cards, Woolworths, Habitat et al have all gone to the wall. Leaving behind them empty shop fronts and a dwindling sense of purpose for the UK's high streets.
There are many people, particularly in relation to HMV going into administration, who point the blame squarely at the on-line retailing giants such as Amazon. Or they point the blame at us, the consumer. How could we dare to let our high street die a long and slow death? Why have we chosen convenience and better customer service?
My viewpoint on this matter is actually very different, these retailers failed to notice and act promptly when the internet changed the way we shop. In 2002 Philip Beeching, advertising executive who had held the HMV account for many years, told the MD and assembled directors in a pitch for their future business:
"The three greatest threats to HMV are, online retailers, downloadable music and supermarkets discounting loss leader products."
The meeting came to a very abrupt end and Philip was chucked out of the building. The MD had dismissed his opinion as rubbish, saying that users downloading music from the internet was a passing fad. Consumers would always want to buy their music from a store. (For the full story see The Media Briefing blog article written by Patrick Smith.) It's that unwillingness to look ahead and see the writing on the wall which, in my opinion, the high street law firm is suffering from at the moment.
I am not a lone voice in this opinion. Take Richard Susskind in his recent article on legal futures where he says that there is no future for the high street firm. Interestingly the first comment on his article, says:
"Susskind spouts alarmist rubbish in a vain effort to convince the wealth of doubters that he is worth listening to. He isn’t."
This comment neatly sums up where many of the partners in high street law firms are sat - head in the sand and like the HMV CEO, chucking out people who are trying to show they how they will need to change and adapt to remain in business.
Cobbetts may have ultimately collapsed because of high debts, high overheads and two quarter’s disastrous trading conditions, but how much of their commercial woes are down to their inability to adjust to the changing legal market place? This was a firm with a very strong property specialism, which makes you wonder whether the partners just refused to adapt to the changing ways consumers are now buying legal services.
Let's look dispassionately, at the typical high street law firm. How many of them are acting in a truly client centric way? Very few (excluding the great work being done by Quality Solicitors in this space) I would suggest. Can you ring or speak to your lawyer about your house purchase outside of 9-5, mon to friday? I doubt it. Does your solicitor come to your house at a time convenient to you to help you with writing your will? It's no wonder that we now have a thriving will writer's industry all prepared to come to you and work with you at a time and a place convenient to you.
How long will it take for us, the consumers, to vote with our feet and choose a legal service that's transparent, efficient (after all the billable hour rewards anything but efficiency), client centric, and delivered in a way that convenient for us rather than the firm of solicitors.
In ten years time, will we be moaning the end of the high street law firm and pointing the finger squarely at the Quality Solicitors, BT Legal, Rocket Lawyer, Co-op or any of the 450+ companies that applied to be an ABS in the last 12 months? Or will we be telling partners in law firms, you didn't listen to us?
Heather Townsend helps professionals become the ‘Go-To-Expert’. She is the author of the award-winning book, ‘The FT Guide To Business Networking’ and the co-author of ‘How to make partner and still have a life’. Over the past decade she has worked with over 300 partners, coached and trained over 1000 professionals from UK and international mid-tier and UK based professional practices. Heather regularly blogs at Partnership Potential, How to make partner and Joined Up Networking.