Pitcher Partners recently conducted our fourth annual Legal Firm Survey. The survey was designed to gain further industry insight and to help firms make informed decisions during times of rapid change.
In this highly competitive environment, legal firms are continually seeking a competitive advantage. It is often thought that smaller boutique firms are more agile and better placed to implement change at the pace necessary to stay ahead of the pack.
Almost half the 2017 respondents (43%) suggested they would consider restructuring their firm. In any restructure, the historic partnership model, related governance and decision making processes and the distinction between equity, non-equity partners and other professional staff roles within a firm are all issues to be reviewed. Often the legal structure of a firm determines the decision making and governance structures adopted. We believe this does not need to be the case. Decisions about legal structure should be distinct from decision making, sharing of profits and ultimately your firm’s culture, values and behaviours.
Our 2017 survey saw a mix of legal structures adopted by respondents, with the majority of firms being either corporate entities (42%) or partnerships of individuals (21%). 46% of respondents continue to maintain a goodwill practice. Interestingly this percentage is well below our accountants’ survey where 63% of respondents maintain a goodwill practice. With the recurring nature of income tax and accounting work it comes as no surprise that more practitioners expect goodwill based on the recurring nature of revenue.