Associate Insight: How can firms and practitioners embrace the business of Law 2015

In order to embrace the business of law there has to be an acceptance of the need to run a law firm like a business and to ensure that in so doing there is real buy in to the need to adapt to the changing requirements of a firm's clients, their funders, the regulator, their insurers and their members and staff.

1. Clients

Asking and listening are key. A common criticism is that practitioners take insufficient time to understand their clients' business. How can a business sell a service or product if they do not understand their clients' requirements? How can a business develop their understanding without a carefully planned, implemented and managed client relationship programme?

2. Funders

Funders are asking more detailed questions and want to have a deeper understanding of a law firm's business to protect their security and make their own decisions about funding requirements. They want to know that the law firm is being well managed from a financial management perspective, like other businesses they fund. A common criticism is that this is often an area of weakness and that greater focus and often support needs to be applied. Firms need to be clear about the financial management information they need to manage the business and to share with the funder.

3. Regulator

Gone are the days when risk failed to appear on a law firm's agenda. It is interesting to compare and contrast the requirements of the FCA with those of the SRA and to learn how comparable sized businesses in other sectors manage the regulatory obligations imposed upon them. Unless law firms embrace risk management in its many guises there is the potential for SRA involvement which in itself has a cost and can be high risk in terms of its financial impact on the firm.

4. Insurance

PII is one of a law firm's major overheads. Help is at hand to enable firms to manage their risk exposure, which may ultimately lead to a reduction in premium. A law firm, like any other business can benefit from a regulatory health check from time to time. The savings that could be made and comfort that follows are both invaluable. The knock on effect for the business should not be underestimated in terms of the importance placed on it by the other major stakeholders in the law firm business, most notably funders and the regulator.

5. Members and staff

Running a law firm, like all business requires reward and performance issues to be dealt with effectively. What other business would tolerate underperformance and unacceptable behavioural issues which impact on a firm's profitability and well-being? There is considerable risk in allowing HR issues to be insufficiently managed. Law firms are a people business. The hidden cost of losing fee earners and staff and subsequent recruitment can turn out to be exorbitant and a considerable drain on profitability.

May the time have come for managers in law firms to commit wholeheartedly to running their law firms like businesses.

Charles Metherell is Managing Partner at The Corre Partnership LLP part of the Willis Group (www.willis.co.uk)