Written by Saron Berhe
A recent article in National magazine by Mitch Kowalski, How to Make a Law Firm Float, provides an in-depth look at the Australian law firm Slater & Gordon Limited. This firm has paved the way for other flourishing law firms around the world by showing them how to run a law firm that provides excellent customer service as well as excellent legal services.
The article emphasizes the focus the firm places on bringing satisfaction to its clients. Potential clients start off their experience at Slaters by calling the firm, where specially trained call center staff will triage their legal problems and decide which of the lawyers in the firm’s 30 practice areas the client should be directed to. This alone is a major improvement over the process for finding legal help in the US. Most firms that handle legal matters for individuals and small businesses consist of a fewer than a dozen lawyers and specialize in only a handful of areas of law. For most Americans, finding a lawyer involves phone calls or in-person visits to multiple law firms. And in each of those calls or visits, the customer has to get in touch with the lawyer who might handle her case to decide whether the lawyer is the right one for her.
When it comes to fees, Kowalski praises the firm on its fixed prices that are laid out based off of the influence of the demography of their clients. Because of the large scale on which Slaters practices—70,000-80,000 inquiries a year—the firm is able to collect enough data about the cost of providing its services to determine flat fees which are low enough to be attractive to consumers while still allowing the firm to turn a profit.
Kowalski emphasizes that “at Slaters the focus is on making the business of law run better. There’s an implicit understanding that quality legal service is a given—and expected.”
How does Slater’s manage to provide quality legal services and quality customer service simultaneously? There are two factors that help it to do so. First, the firm uses non-lawyer expertise for the business side of its operations. Lawyers don’t know how to run a call center, or how to examine customer data to set appropriate fees, but business experts do. Second, the economies of scale from running a large enterprise—Slater’s employs about 1600 people—allow it to provide lower fees than the typical consumer law firm that’s about one percent of its size.
Both of these factors are enabled by Australia’s policy of allowing outside investment in law firms, which the US prohibits. American restrictions on outside investment not only make it harder for lawyers to implement innovative business models, and thus remove the benefits that American clients could see from a firm modeled after Slaters. In a previous blog post, we wrote at length about how outside investment can improve client access. Without outside investment, however, it’s impossible for US lawyers or businesspeople to raise the capital to create a mass-market law firm.
Slater is leading the way for other law firms in the future by implementing the fundamental changes necessary to provide appropriate, helpful services for their clients. By running the law firm as if it’s providing a service (which, after all, it is!), it’s able to better fit those services to the needs of its clients. If American law firms were able to adopted this business model, then the entire legal sector would be brought to a whole new level. The ABA and state policy makers need to reconsider their long-standing ban on outside investment, for the benefit of all Americans seeking legal help.
Saron Berhe is a Responsive Law intern.