Legal Recruitment from Ten-Percent Legal

Friday, April 25, 2008

Multidisciplinary Partnerships MDP

25/04/08 Multidisciplinary Partnerships: Are they all that they’re cracked up to be?

There’s been a lot of talk recently in the news, Law Society Gazette about the drastic changes that will take place when multidisciplinary partnerships come in. It’s expected that these will be at the end of 2008 and that the legal profession will be revolutionised by them.

Over the last eight years, I have been doing legal recruitment and I’m clear that it’s probably not going to be the revolution that the soothsayers of the legal profession expect. Over this time I have regularly been approached by companies, whether accountants or financial advisors or claims management, request details of solicitors who want to go into practice as either an employee or as part as their company.

The reason for this is because the companies see the benefit of having a solicitor there earning money for them, when they see the hourly rate that they’re paying an external solicitor’s firm framework. However, when they actually get down to the bare bones of the matter, it becomes apparent that actually a solicitor is not as good a prospect as they expect. This is for the following reasons:

1. Solicitors tend to cost rather a lot of money. Don’t expect to pick up a highly experienced solicitor with five years PQE, pay them £30,000 when in reality, for example, if it’s a personal injury solicitor, would actually be paying them something in the region of £45,000 to £70,000 for that level of experience.

2. The cost of professional indemnity insurance is somewhat prohibitive for a large number of firms as it is such a large outlay from the start. External companies do not quite realise the cost of this to firms and also what effect it has on the day to day running of a practice in that there is a lot of management and admin that goes with that insurance that must be adhered to.

3. Solicitors, although charging fairly high hourly rates compared with other professions on the whole actually do not work for a full seven or eight hours per day billing at the levels the firm expect them to. As a result often these companies delude themselves into thinking a solicitors going to be earning them somewhere in the region of £2000 for every day they work in the practice, when in reality the solicitor may only be fee9 earning three out of those seven hours. Which means that the practice then have to shoulder the cost.

4. It is very hard to find any solicitors who want to work in such circumstances or has been in the past and as a result, such arrangements have been very limited. I do know of a solicitor who set up in practice in East Anglia working effectively as a multidisciplinary practice with a firm of financial advisors but found that the work he was being provided by the firm of financial advisors was not actually sufficient to generate an income for him, despite various overheads being paid for by the financial advisor firm as opposed to himself.

I expect to find over time that there will be multidisciplinary partnerships, but in reality these multidisciplinary partnerships will not be as expected. I think they will be on a small scale and with limited market share. I suspect that it is again another false or misleading media line that is being spun over time to generate new footage to fill magazines and journals and written by journalists who actually have no involvement with the legal profession on a day to day basis as they go about their business.

Jonathan Fagan is the Managing Director at Ten Percent Legal Recruitment (www.ten-percent.co.uk). He regularly writes and commentates on the legal profession and legal recruitment. Visit our website for details of our legal recruitment services as well as free careers advice.

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