David Turney is happy to report that his firm is “virtually” recession proof – because it keeps its costs variable rather than fixed wherever possible. And this approach also results in a happier team and happier clients
Between 2008 and 2013, we witnessed the latest modern great recession, and now in 2020, we are witnessing the evolution of the COVID-19 recession – labelled the “Great Lockdown”. These events cause panic and uncertainty, not only in the usual lives of people, but also by heavily impacting the economy, including the legal market. Surveys have been conducted and statistics touted about how the legal market has been affected by the pandemic, and many firms have had to reach out for the Coronavirus Job Retention Scheme and make redundancies.
The current pandemic brought in a massive wave of uncertainty. We still do not know what measures governments around the world will have to take, as we continue to live with the pandemic, and we are only at the start of the recession.
When my clients asked me during the lockdown how we were getting on and how business was, I felt a little guilty to say that business was great and that we didn’t seem to be affected by the pandemic.
Avery Law was built as a disruptive, innovative and lean (low-overhead, technology-driven) boutique law firm. The way everyone in the legal marketplace is working has been changing over the past few years, and we have been an early adopter in embracing a more flexible approach to work. Our business model has made the firm resilient, and has allowed us to continue to grow even in these difficult market conditions. If I could put a label on it, I would say we are “virtually” recession proof. And that’s because our costs are, to a large extent, variable, and we aim to eliminate fixed costs, and where they are unavoidable, keep them as low as possible.
There are no secrets to this business model, and there are now many firms operating a similar model. Keeping fixed costs down lies primarily in the relationship a firm has with its staff and the size and location of the office space it occupies. Does a firm really need that shiny office space with the notepads, pens and biscuits, in order to win its clients? In my opinion, the success of a law firm lies primarily in its team, its culture and its ability to pivot.
A firm’s people are its primary capital. That means that a more flexible approach to work and life is fundamental to a firm’s success. If you can promote the right working environment within the team, then success does not need to be defined by partnership or money.
Many solicitors are looking for flexibility in their working lives: I hear and read that the achievement of the perfect work-life balance is now being viewed as integral to career success. I imagine this is even more important in 2020, when working from home and spending more time with family has become the norm. Firms which offer their people flexibility will find recruitment and retention easier. This approach will also mean there are fewer interpersonal issues in the workplace, and everyone will be working for the benefit of the clients.
Reducing costs and having lower overheads also allows a firm to be more client focused. The firm doesn’t have to bill by the hour every time one of its people speaks to a client – instead, it can offer fixed fees and fee caps for a large proportion of work. This gives clients transparency and certainty as to costs, thereby creating trust, which is highly valuable for growth and success.
In these challenging times, a firm needs to be constantly evolving and pivoting (much like a lean start-up) and management should be collaborating closely with the team to embed a culture of innovation that puts the happiness of the team and its clients ahead of financial rewards.
Essentially, a firm needs to act a little bit like mercury – no, not Freddie, I mean the chemical element. At different temperatures, mercury takes different forms.
There is an expression that if you don’t get on the train, you are going to get left at the station. The legal marketplace innovation train has been slowly leaving the station, and COVID-19 has led to the train increasing its speed and number of passengers. If you do not get on board now, you are sadly going to be left behind. Once you are on board, the key is to then know when to get off and get on the next train in order to pivot. In having variable costs and less or lower fixed costs, it is much easier for a firm to get off the train and adopt new ways of working.
I am excited about the changing legal marketplace and am motivated to remain a forward-thinking and innovative leader, driving change across the profession for the benefit of clients.