If the recently released 2018 National Profile of Solicitors is any guide, there has been an explosion of new small and micro sole practitioner firms in Queensland.
In the Sunshine State, 50% of lawyers work in firms with only one equity holder, which is well above the national average of 38%.
Across Australia, there are now 18,164 private law firms of which a staggering 79% are sole practitioners! And every day these numbers continue to rise as more and more solicitors thumb their noses at working in larger firms and make the decision to go it alone.
This is especially the case for early and mid-career lawyers; which is probably unsurprising given that nationally, solicitors aged between 25 and 39 represent 48% of the total cohort (and 63% of them are female).
So why are so many of our colleagues thumbing their proverbial noses at the traditional path to partnership in an established firm and what does this trend mean for the larger firms, especially in the consumer law space?
In the past BigLaw in the consumer law field have largely used brand to defend their turf. Not only did a big brand and loud voice attract new clients but it gave them economies of scale in advertising, purchasing power and resources; but it has also exposed their Achilles heel.
With size comes higher cost structures and inflexibility. Decisions made by committee are slower and in a disruptive world, can give competitors an edge. As does their higher cost base and fee structures!
Previously larger firms have relied on customer inertia; where consumers are driven by habits like branding and search in buying a service (or product) even though superior options exist.
But with the proliferation of small firms telling the world about their value proposition of a lower fee structure, more personal service and higher levels of expertise, is it only a matter of time before the large firms start to lose ground as better informed consumers decide to engage the smaller firms with a better value proposition?
Customer desires and needs change and the incumbents may well be nervous about the splinter micro firms that are offering superior value and only now beginning to sell their message to the wider community.
If the pool of available work is well defined and relatively inelastic, the small and micro firms must be taking the work from someone….is it the more expensive and impersonal corporates? Only time will tell.