Keith Arrowsmith, Partner, Counterculture Partnership LLP

There are clients who talk to me now because I am sitting with them wearing a Counterculture badge that wouldn’t dream of walking through the door of what they see as a law firm. There is something about the perception of being in this more comprehensive structure that allows them to be more comfortable in engaging with me.

UK-based ABS Counterculture Partnership is a multidisciplinary practice that offers to cultural and creative not-for-profit organizations services in the areas of strategic planning, funding, financial and project management, legal and governance advice, capital projects, training and advocacy. Counterculture has 10 partners of which one, Keith Arrowsmith, is a lawyer.

What the partners of Counterculture have in common is that we all serve not-for-profit clients in the arts sector. The firm was formed in 2009 by two people who had extensive experience providing professional support to London art galleries, notably in the areas of fundraising and accounting. Over the years they joined forces with a number of other persons who provided complementary services (strategic planning, governance, marketing, tech support,…) for the arts sector. A mutual contact asked me to provide workshops, and I started working alongside them, as a qualified solicitor working with a traditional law firm. They would bring me in on a project basis, to help with governance structure and charity and commercial legal questions — essentially to provide a suite of legal services to run alongside their offering to their clients.

When I was working with Counterculture on a project basis, our clients told us that they love working with us because we have a shared ethos and a shared way of working. But, they complained, it could be simpler, since you make us do the administration and the invoicing twice instead of once. This is why we became interested in the ABS mechanism — we saw it as a way for us to work more closely together. We spent some time thinking about it and discussing it — about a year — and we finally decided that ABS was the best way forward. While we saw a number of benefits, a large one was that I could go on providing my services under the qualification of solicitor and under the regulation of the SRA.

When we started the application process with the SRA, it became quickly clear that their concept of a multidisciplinary practice was quite different from ours. It seemed difficult for them to get their heads around what we were, in part because of our small size, but especially because the percentage of our legal services is so small compared to the percentage of the other types of services that we offer. We ended up having a number of meetings with the SRA in order to explain how we work.

Further, there was a mismatch between the SRA’s concept of regulated activities and what we needed from a regulator. Their system of checks was more geared up for a typical high street law firm doing wills and conveyancing work, which is not our risk profile at all. Notably, the SRA is quite focused on the security of client accounts, but we hold very little client money. We didn’t fit into any of the SRA’s standard risk profiles, and they appeared to have trouble developing one that was right for us.

As if that were not enough, the SRA also had to get a handle on the fact that, because of our accounting, public funding and other work, we were already regulated by about four or five other regulators. Those regulators had all gone through our processes already and were happy with them. We had to review our processes again to be sure that the SRA was satisfied with them, too. And for every change we made in response to a request from the SRA, we had to make sure that our other regulators were happy with it as well. We have taken the approach that when the various regulations overlap (such as with respect to confidentiality, money laundering, disclosure…), we conform our processes to the most stringent. We’ve not experienced any direct conflict among the different regulations.

One thing that I find odd with the SRA’s rules is that as an ABS, I have to have higher levels of professional indemnity insurance then I would have to have as a sole practitioner. The risk profile is completely out of kilter. I chose not to be a sole practitioner because, in my view, having people sitting around my partnership table who are experienced and skilled in accountancy, cash flow, finance — all those extra things that help run a business — is less risk for everyone, including myself, and certainly less risk than if I tried to do everything on my own. Yet, the SRA considers it more risky.

In summary, I don’t think that the regulations in place today in England and Wales are as adapted to structures like ours as they should be. I don’t think that they focus on the real risks of my practice. Some parts of the SRA’s Code of Conduct is not particularly applicable to my activities.

I have to be careful with how I establish my files and document my work. For example, with respect to governance, I provide training as well as legal services. When I provide training, the applicable engagement letter, invoice, file structure and insurance policy are all different from the ones applicable when I provide legal services.

Our competitors are, for the most part, large, traditional law, accounting, and management consulting firms. I believe there are three reasons why clients come to us instead of them. The first is because our overheads are lower, we are able to charge lower fees. The second reason is because we are able to work in a seamless manner that other firms don’t do. Our clients will come to us from those other firms complaining that they met with one person to explain their problem, and were then passed from department to department or individual to individual. The other firms aren’t “joined up” like we are. The third reason is because we are specialized in the art sector — this gives us an insight into our clients and their needs that large law, accounting and management consulting firms are not able to offer.

When we applied to the SRA to become an ABS, we were asked how Counterculture would improve access to justice. This is my response to that question: there are clients who talk to me now because I am sitting with them wearing a Counterculture badge that wouldn’t dream of walking through the door of what they see as a law firm. There is something about the perception of being in this more comprehensive structure that allows them to be more comfortable in engaging with me. Some of it might be related to concerns about cost, but I think that the real reason is that because I am wearing a Counterculture badge, I can begin conversations that otherwise I never would have been able to have. Many people in the arts start with the premise that their world and the legal world are so far apart, a lawyer could never understand them. With Counterculture, I am able to communicate with clients in a much more open way because they don’t see us as a traditional law firm. We’ve had real success in that way, and it has been helpful for the arts sector.

To be honest, many of our clients don’t care about whether or not we are an ABS. They just want us to crack on with the work, and they are happy that they do not have to worry about whether a question is for an accountant, or a lawyer, or a fundraiser, or whoever. They just throw us the question and we sort it.

Beyond that ability to work seamlessly, our status as an ABS brings additional advantages to our clients, even if they do not make the connection with our status. For example, when we assist with a dispute, I can accompany the client all the way into the court room — something that I could not do if we were not an ABS. Further, when we are dealing with third parties (for example, a client’s landlord to negotiate a lease), there is value in being able to say we are a law firm. If we couldn’t, we would be treated as if we didn’t know what we were talking about. Another example – the fact that I am a solicitor greatly facilitates our negotiations on behalf of clients with companies like Google and Facebook, whose procedures are much simpler for solicitors than for lay persons.

All that being said, there is a certain amount of regulatory hassle and fees involved with being an ABS. So, we will periodically review whether or not it is worthwhile for us to maintain the status.

It is easy for us to organize our work internally. We work in a t-shaped way, in that each of us has a huge depth of knowledge in his or her particular area, and does not dabble in other areas. At the same time, we communicate extensively. We use the cloud-based CRM system Clio, which is designed for law firms and we find it works well for us, too. Each client has a client relation partner, and that person is responsible for making sure that things get done as they should.

We have ten partners — four senior and five junior, and an independent Chair. Of those, I am the only lawyer. The backgrounds of the other partners are in accounting, public funding, business and strategic planning, project management, and as practitioners in the arts. All but the independent Chair provide services to our clients. Our independent Chair has the skills to provide services to our clients, but we purposely keep him at arm’s length in order that he can maintain an independent perspective, as a check on our own, internal perspectives. He brings us a wealth of experience from his management positions with a number of major arts organizations.

Before I came to Counterculture, I worked in a traditional law firm of about 200 people. At that firm, almost all fee earners were competent lawyers, but most did not have any real training in management, in communications, in planning or processes, or in finance or accounting. Yet, everyone was a manager. As a result, there was a risk of lack of rigor in the work and I felt more exposed there than I do at Counterculture. Further, I had little in common with my colleagues around the table who worked in insolvency, in personal injury, … Their clients were completely different from my clients and the crossover was low.

In comparison, at Counterculture, we all have something in common, which is that we all want to work in the arts. This provides a framework for our work that simply isn’t there among lawyers in a traditional law practice. At Counterculture, we all provide a different kind of service, but to the same kind of client — we have a commonality that I never had before. Also, when I sit around a Board table, the people I am with, with their different backgrounds and training, see problems very differently than I do. Sometimes it takes us a while to understand each other, but eventually we do, and we are much better for it. In sum, I find Counterculture to be an easier — a better — place to work, because each of us recognizes the strengths of the others. We each bring something to the table that the others value, we share clients, and we share a way of working. This was not the case at my traditional law firm, where, even at client events, you could tell there was little in common in the room. Having our focus being the sector rather than having the focus be “you’re a lawyer” is fantastic for us and for the clients.

I think there are two different kinds of multidisciplinary practices — there is the kind where the legal arm is operated as a business separate from other arms, and there is the kind where the legal arm is part and parcel of a singular business. I think that as regards the first kind, there is a danger that clients can be pushed from one arm to the other, without a feeling of having a real choice in the matter. This raises questions of free choice of lawyer, of independence and of credibility. That being said, these issues are not unique to legal services — we accept these kinds of conflicts in other industries, such as in journalism and the ownership of media outlets. Nevertheless, in the case of Counterculture that type of issue does not arise because, while my colleagues and I are from different disciplines, we are one business.

In my opinion, the real challenges to our industry today are less with regulation and more with technology. I think that someday in the near future, there will be a company that will have the resources to develop the technology needed to reach a highly disparate global market. As a result, I wonder if, in the future, we will be looking at just one or two legal services providers in the world, with everyone else just getting their information from Google.

I’ve heard the criticism that law firms should not be owned or managed by nonlawyers because law is a profession and not a business, or because nonlawyers will cause the lawyers to violate the ethical rules. I find that criticism ludicrous as well as highly conceited, insular, and disrespectful of other skills and experience. I personally find there is much more value to have colleagues sitting around my board table who have a set of skills and experience that I don’t have. The suggestion that those colleagues are less as persons or less as professionals because they do not have a law qualification is just wrong. I have friends who are brilliant, switched-on, client-focused lawyers. But they have no idea how to run a law firm. Any training they’ve received was tick-the-box training, not real training. The only time I’ve felt really exposed was working in traditional law firms. Because the partners did not have the skills to know if the person they were employing, for the accounting function, for example, had the right skills, and they had no way of interpreting the information they were given by their employees. In contrast, at Counterculture, I have someone sitting next to me bearing the same risk that I am bearing, and who is able to reassure me regarding the risk.

ABS is a tool to enable lawyers to consider how they deliver legal services. It allows individuals to challenge the profession and challenge how it works. It means that lawyers can no longer take their relationship with the market for granted. Without ABS, there was a real danger that lawyers would become so stuck in their ways that they would deliver a Dickensian service that hadn’t moved on for a hundred years. ABS is a way of enabling the marketplace to move on. Not everyone has wanted to or felt the need to, but many of us have, and this experience has been positive as well as valuable. Today traditional law firms co-exist with ABSs – there is a plurality of services that did not exist before.

For lawyers, it’s easy to be afraid of having a discussion about ABS — to be afraid of the changes they may create. But, as lawyers, it’s our duty to have the discussions. As lawyers, it’s a mistake for any one or group of us to lock ourselves into one way of doing or seeing things, because if we do the world will move on without us.

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