The Asian financial crisis has had a positive impact on the UK legal sector and large London law firms. But it has also created some anxiety for many firms, as they fear a wider crisis that could impact the legal sector more broadly. This article discusses what can be done to close the diversity gap within UK law firms. The first step is to understand the factors that can contribute to success. After all, what is the best way to increase diversity?
Balance: Managing the right mix of commercial and legal talent is vital for a law firm. While the legal talent is often the largest cost of a law firm, the benefits of a firm’s services are often derived from its commercial skills. Therefore, law firms must structure their management and operations in a way that aligns with the type of business they are. There are three distinct categories of law firms: those focused on providing legal services for clients, those focused on advising companies, and those that are purely commercial. A law firm that is a hybrid of these two types of firms will need a slightly different approach to their commercial growth strategy.
Legal professionals are in control 99% of the time. This means that they need to be able to develop authentic commercial skills and place them at the forefront of their business planning. Without commercial skills, lawyers will find it difficult to survive in a new legal eco-system. But the law industry is growing and the market is going to change. The global pandemic is going to increase the demand for customer-centric legal solutions, and those who can adapt their business model to suit these new demands will be best placed to take advantage of it.
Increasing female partners is key. The UK legal profession needs a 30:70 gender split in partnership positions. A recent independent projection analysis by Pirical – a law firm consultancy based in the UK – shows that women will become a larger proportion of the workforce in five years. However, in the UK, women’s proportion in the legal workforce is low in PQE three and four and is set to reverse at PQE seven.
In the US, law firms have focused on domestic clients and have not taken advantage of opportunities that have arisen following the financial crisis. However, in London, the use of English law in a global context has made it an attractive choice. The use of English law in international business and the legacy of colonialism have both contributed to the UK’s booming economy and legal firms’ growth. In the UK, the legal profession is a strong global player with an enormous presence of Japanese banks.