(thanks to isu.edu)
Legal Futures guides us to an enlightening survey on law firms' ideas on the brave new world of ABS and Tesco Law. It appears interest is waning.
Baker Tilly, the accounting firm, has been surveying lawyers for two years now on their reactions and expected responses to the wild horizons before them. The latest survey for 2011 shows that law firms are orienting themselves towards the new markets but when it comes to external investment they are becoming increasingly shy.
Of firms with more than 25 partners interest in external investment has declined from 56% to 45% whereas in firms with less than 25 partners attraction has only dropped 9% to 53% of respondents. Baker Tilly argue that this is caused by partners realizing that their ways of working would have to change substantially if private equity investors so demand, which they would. From this perspective law firms are holding on to their conservatism and perhaps the autonomy of partners.
It's worth reading the Baker Tilly report on changes ahead, Climate Change: Forecasting the Impact of the Legal Services Act. It tries to spell out how private equity operates and what an IPO would mean to firm members. For the traditional law firm partner the reading is grim, or perhaps one should say challenging. I've already written on how law firms should be valued for an IPO and that makes grim reading also.
This is in contrast to firms making all sorts of moves to improve internal management, possibly link with non-lawyer suppliers, but fewer are prepared to incorporate.
Maybe the changes reflect a growing acceptance of change happening and a more "relaxed" attitude to what the Legal Services Act might portend. I shall be keeping an eye on Baker Tilly's surveys for a few years yet.