Background
 
Effective 31st March 2009, the Legal Services Act allows non-lawyers to hold equity in law firms. At first equity access will be restricted to managers within these firms but it is planned that in 2010/11 full access will become available to non-lawyer investors. That means external investors will be able to hold equity in law firms and, consequently, they will start placing commercial values on law firms in which they wish to invest.
 
Conventionally, lawyers have not accounted for goodwill within their businesses; that is, no payment is made for goodwill when partners are admitted and none is paid when they leave. Firms will now have to address how they handle this goodwill asset on their balance sheet and among partners. Such restructuring will be driven externally as much as internally because of new investor interest.

Approach

Our approach helps a law firm in four key areas:

• How the firm can enhance its valuation by developing its underlying business assets.
• How the structure of the firm needs to be redesigned to drive behaviours and activities that enhance the valuation.
• Redefinition of the functional roles now required within the firm to support the new business.
• Development of a succession plan covering both entry and exit and development of key resources.

Our approach uses a coaching methodology that is cost-effective, drives implementation in each of these key areas and supports behavioural change.

Our Experience

Since November 2007, we have been working with a number of UK law firms to help them develop their businesses so as to maximise commercial returns within the framework of the Legal Services Act. Other professional service providers such as accountants and IFAs have faced similar issues for some time and we have extensive experience working with these professions both in the UK and Australia. In Australia the legal profession underwent similar changes several years ago and we have been involved in helping a number of law firms to meet these challenges and to maximise their commercial opportunity.

Next Steps 

To find out more contact Peter Harford at pharford@shirlawscoaching.com and to discover more about the range of professional services we provide visit us at www.shirlawscoaching.com.

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