Rob Aberdein

While the rise of the nationals and global firms will carry on for a while yet, many small and medium Scottish firms will face their day of reckoning over the coming decade.

For hundreds of years, Scotland’s legal enterprises have been seen as revered and storied institutions. Within them, the partnership structure that existed centuries ago is still clinging on to this day.

Yet this historic archetype no longer reflects the clients they seek to serve nor the talent coming through.

The partnership model flourished at a point in time when a client’s choice of firm was passed from generation to generation - and private and corporate clients would typically remain loyal for entire working lifetimes.

Nowadays, those intergenerational loyalties have disappeared and where brand differentiation is ill-defined, clients have a greater propensity to shop around depending on their requirements.

Partnerships have not been equipped to keep pace. Being “client focused” is the ubiquitous mantra of today’s firms, yet it is impossible when pyramid structures rely on silos. “Ownership” of clients breeds fierce protectionism from within, rather than collaboration in the interest of the client.

It’s not just clients who are dissatisfied. The future talent coming through is yearning for change too. A survey of 1,000 legal professionals by GroGroup found more than three quarters think the traditional partnership model is outdated. It’s little wonder.

Many partners have worked long days and weeks and missed out on precious family time in order to reap the rewards of a rigid hierarchy. But many are now blindly assuming that those now shovelling the earth will want to follow in their footsteps.

We’re increasingly seeing the next generation of lawyers reject the well-trodden path before them, put off by the expectation to suppress their personal lives in order to devote fully to the job. The ongoing hiring crisis and talent shortage means they can increasingly call the shots, too.

With flaky clients and a disillusioned, mobile workforce, what is left of a business? It means small and medium firms risk being substantially overvalued. The stark reality is, some will banks excluded, there is little value beyond the network and caseloads tied intrinsically to the principals themselves.

The last recession and its recovery provided an early glimpse into the seismic changes we’re about to see. Countless ancient names of the Scottish legal scene sought the solace of a global partner. As the current generation of partners retires, expect many more brands to vanish completely.

There is hope that the legal sector will meet the needs of the modern client and workforce.

Late last year the Scottish government ushered in reform of the legal services market, off the back of a super-complaint by consumer body, Which?. It identified that the archaic model was delivering poor value for consumers and leaving little space for innovation within the sector.

Alternative business structures for legal firms has been a long time coming and will bring fresh thinking and opportunity by enabling investment and ownership by non-lawyers.

It could see a rethink of middle management too and the established career journeys and hierarchical structures that have historically created a blame culture and the legal sector’s notorious slowed down decision making.

This will also see the last of the small and medium sized firms sold or merged for low valuations and the rise of the ‘professional services firm’ will begin, changing the face of the legal landscape forever.

Such businesses will offer the client more by making it easier to do business with them. It means time-pressed clients will be able to access law, accounting, tax, wealth, property and finance in one place, with technology driving everything.

Clients get time back, better value, with the opportunity to become fans of a brand that has a greater and more positive impact on their lives - and something that means more than the cooperative of people – the present reality of most legal brands.

The new breed of these multi-disciplinary practices will not get everything right, it may take time to bed in and there will be a mix of successes, failures and teething problems in firms that have merged or been acquired.

But the change will be good. It will breathe life into a stale sector. Clients and employees will benefit.

Rob Aberdein is managing director of Moray Group, a professional services umbrella firm that comprises Esson & Aberdein, Alston Law, Simpson & Marwick and Moray Financial. This article first appeared in The Scotsman.