Littles law firm management series: If you build it, they won’t come

First and foremost, you need to weigh the pros and cons against your ultimate goal. As I said, we all have different levers, which may make one path better suited to us than another. Here are some things to think about:  

• Clients first, always and forever. If you aren’t getting offered a seat at the table in your current role because you don’t bring in business, or because you’re not a customer magnet, why do you think you’d be able to do it alone, without the resources of an existing firm behind you?

• Do you want to own 100 per cent of a small pie, or a sliver of a much larger pie? If you’re leaving ‘employee’ life, the prospect of running your own business and making all the decisions can seem appealing. It’s true that having partners or other shareholders does require sharing power and decision-making (so serious control freaks need not apply). But it also involves sharing overheads, sharing risk, and hopefully sharing a bigger profit pool. You don’t have to be the sole repository of all wisdom – you can leverage on your partners’ expertise. Plus, as anyone who has run their own business will attest to, you can also take a stress-free holiday knowing that the whole show doesn’t rely solely on you.

• What is your growth strategy? Keen observers of the legal business know that buying in – whether it is files, sponsorships, advertising, or humans via a BDM – will only get you so far. You live by the sword, you die by sword.  Are you bringing in people who can expand the business, and do you know what you need to do to keep them? The only growth strategy that works is where you empower all of your employees to build relationships with trusted networks and referrers, value them properly, and take meaningful measures to keep them. Or, put simply, you provide all employees with a clear pathway to becoming shareholders. This means that your recruitment strategy should boil down to engaging  ‘people like us’ – the kind of people you want to elevate to partnership. 

• Once in, are you going to shut the gate or open it wider? If you’ve put all your blood, sweat and tears (not to mention substantial cash) into setting up a business,  don’t fall into the trap of asking why your star talent won’t just settle for what you consider to be a generous salary, rather than a share of the business. I know that if you feel like you’ve worked incredibly hard to get your seat at the table, your first priority might not be pulling up more chairs for others wanting to get there too.  However, in my experience, fostering up and comers in the firm, encouraging ambition and competition for partnership, and growing your business turnover through the strategic onboarding of new shareholders only increases the value of the business, and its shares.

• Are you future-focussed? We want it to be said of Littles that it’s a law firm that’s a tech firm and a tech firm that’s a law firm. For me and my partners, that’s an uncontroversial statement. However, for many lawyers, this tech focus represents an unwelcome interference into ‘how things are done’. Are you going to have to be the tech evangelist? Are you going to surround yourself with PLUs? If you’re a tech luddite in 2021, then don’t read the next point, because you don’t need an exit strategy – it will be done for you.

• What is your exit plan? Will you sell out, or earn out – or both? This means understanding exactly what it is that will make your firm, or make your shares valuable.