Professional management with a CEO...gives the right people the autonomy they need to make decisions without the need to wait for a consensus, and it eliminates mistakes because decisions are not made in silos. Everyone at Knights feels the benefit of this.
Knights Solicitors, a firm that dates back to 1759, combines commercial and corporate legal services for companies with wealth management services for individuals. Upon converting to ABS status in early 2013, it became a multidisciplinary practice by adding a town planning practice to its real estate offering. In addition, it received a “7-figure” investment from Hamilton Bradshaw (James Caan’s private equity firm), using the investment for a new IT system and employee training.
We became an ABS because the old model doesn’t work — it stunts growth and it stops decisions from being made — and I didn’t see why I had to accept it. An equity partner in a law firm is expected to be an owner, a manager and a lawyer. It is impossible to do all three well: Not only are there inherent conflicts, but few lawyers have been trained to be managers. It is far better for a firm to have professional management with a CEO. This gives the right people the autonomy they need to make decisions without the need to wait for a consensus, and it eliminates mistakes because decisions are not made in silos. Everyone at Knights feels the benefit of this, from our employees who are empowered to move ahead with their work, to our clients who get quicker, better results.
The decision for Knights’ partners to apply for ABS status was an easy one: We saw a time bomb — who will pay the equity partners their capital accounts? Many lawyers have lost their appetite to become equity partners, and the pool to replace them is diminishing. The partners were concerned with who would pay their capital. Law firm failure will continue, and partners will not be able to get their capital out. Knights’ partners saw an opportunity and were happy to take it.
The next decade will bring massive opportunities, but only for those who are prepared. In adopting a corporate structure that leaves money in to create value instead of stripping it out every year, and by changing how we deliver our services and price our work, we will be in a position to adapt to the changing world and take advantage of those opportunities.
To download a pdf of this and the other stories, please click below.