The recently-retired managing partner of a major regional firm says lawyers facing constant problems dealing with changes in the legal market may turn to mergers
Stuart Spicer, who retired in March after practising for over 40 years, spent much of his career as the managing partner of Whangarei law firm WRMK Lawyers (formerly Webb Ross), which went through about four mergers and acquisitions under his watch.
During that time, and thanks to some of those decisions that were made, the firm grew to be the largest in the area.
Spicer also spent several years as the director of The Lawlink Group Ltd where he conducted director’s reviews of member firms. He says this experience gave him further insight into many legal practices.
He told NZ Lawyer that he believes mergers are likely to be a growing part of the future legal landscape.
“If you take any law firm, whether they’re huge or sole practitioners, they all see their own set of challenges. Sometimes mergers are a way of dealing with some of these issues, because it means you can change the profile of your firm very quickly,” he says.
Spicer thinks that the number one challenge legal professionals face is having to operate in the rapidly changing market under a partnership model that isn’t conducive to change at all.
Law firms are an unusual business concept to the outside world in that they are owner operated and function by consensus, he says.
“The people who own and run the business are also doing the hands on stuff…The problem is it makes any change very difficult. That whole process of being able to deal with change is difficult because of the partnership model.”
A prime example of this can be found in the attitudes New Zealand law firms have about technology.
Many still have no real grasp of utilising it for future gains, Spicer says, and if you look at their budgets, they often make “no significant investment” to changes in this space.
His former firm was one of the first Kiwi legal practices to go digital and eliminate paper use completely, yet when he took the idea around New Zealand, he faced overwhelming scepticism.
“I was astounded going around the country [to find how] dismissive lawyers were of the idea,” Spicer says. “I think it’s going to leave the legal profession behind.”
Law firms will need to revamp their change-averse model and look at the options in front of them if they want to flourish in the future, Spicer says.
The most pressing issues include the increasing pressure from clients, the evolution of attitudes to fees and billing, and provincial firms feeling the burn of changes to their populations and business communities.
“A lot of the provincial firms have a huge conveyancing practice, and it’s one of things that will be commoditised.”
There’s also the constant worry about the age of people in the firm and its future succession, which can change almost overnight in smaller firms, says Spicer.
“Some lawyers might say, ‘I don’t care what happens to the firm after I die’, but there are a lot of others who say, ‘well I’ve got a lot of good clients and I want them looked after when I’m gone’. This can be a challenge unless you have young lawyers willing to take over.
“For all of these reasons people are going to say, ‘what will we do now?’ and a merger has to be one option. So I’m sure it’s going to happen more often. It’s all about finding a firm with a culture you can get on with.”
Merging can give firms the opportunities to renew themselves, deal with succession, acquire some skills they don’t have, and leverage an economy of scale – but take it from Spicer – it’s not easy: You have to get all of the ingredients just right to make it work.
On a larger scale, he points to some of the “terrible tragedies” that have occurred through massive mergers in the United States, firms he says you’d think would be sophisticated enough to sort it out well.
“All lawyers actually work quite differently on a day-to-day basis, so you’ve got to find a way to put the different work practices together to make it work,” he says.
“It’s important to sort out the whole cultural thing. If you can get that to work, you can most probably get everything else to work too.”