Brisbane law firms fighting for survival
WHEN clients of veteran Brisbane lawyer Bill Delaney could not afford to pay their bill half a century ago, he used to gladly accept a couple of chooks in kind.
Mr Delaney, whose family firm Delaney & Delaney, last year celebrated its 100th anniversary, now practices law in a much more cutthroat environment where clients expect cut priced advice and will go elsewhere if they don’t get it.
Increasing specialisation, the emergence of the virtual law firm and the rising number of large firms buying up small suburban practices, means the traditional small firm is becoming a rarity.
“More regulation and oversight is pushing up costs,” said Mr Delaney, whose grandfather William George Delaney founded the firm in 1915.
“In the old days, I would have been paid in different ways but now there has to be cost disclosure agreements and all sorts of things.”
Queensland Law Society immediate past president Michael Fitzgerald agrees the legal market is tight, with technology changing the way law was practised.
“Following the GFC, all firms have been experiencing a degree of pain and fought to compete not just in the personal injury area but across the board,” Mr Fitzgerald said.
As competition has intensified, clients were rejecting the tradition of paying for a lawyer’s time and demanding a more reasonable flat fee structure. Mr Fitzgerald said clients now expected a quicker turnover of their matters as technology changed the way legal services were delivered.
According to IBISWorld, legal firms have become increasingly specialised to justify higher rates for their services. The research firm said lacklustre demand in Australia had caused many major firms to look overseas for growth opportunities.
“It’s tough,” Mr Fitzgerald said, adding some law firms were now operating entirely online. “It is not like 40 years ago or even some people say 20 years ago.”
A glut of law graduates also was not helping, with many graduates not ever likely to practice law.
The Queensland Law Society says the number of lawyers practising in the state has skyrocketed from under 4000 in 1991 to over 10,000 now.
Elizabeth Shearer, of Brisbane law firm Affording Justice, said that when she started in practice three decades ago big firms would offer the entire gamut of legal services from family law and wills to commercial litigation and business sales. Now there is increasing specialisation, with many firms targeting particular areas of law, like personal injury or company law.
“Technology is a disrupter of our traditional way of lawyering, but it also provides great efficiencies and opportunities to develop new modes of delivering legal services,” Ms Shearer said.
“There are significantly reduced barriers to setting up legal practice. Apart from an unrestricted practising certificate, all you need now is a laptop and a mobile phone.”
Lawyers at Brisbane law firm Virtual Legal never meet clients in person, operating instead in a totally online environment. Founded by experienced lawyer Katie Richards three years ago, the Albion-based firm has a back office in the Philippines where all the administrative work on a client’s file is done.
“That leaves our Australian lawyers free to work essentially as relationship managers with our clients,” she said.
Virtual Legal does not do any legal work that requires a court appearance, instead offering a flat fee service for conveyancing, wills and corporate matters. “People are busy these days and if they can get away with not sitting in front of a lawyer for a couple of hours they will,” she said.
Brisbane legal eagle Oliver Talbot, who left a big law firm to start out on his own after stints in London and Sydney, said the cost of starting a law firm was now more cost effective than ever because of technologies such as “cloud computing.”
Mr Talbot now runs an award-winning corporate law firm Talbot Sayer with partner Tim Sayer. He said a decade ago it would have been much more expensive to start a firm because of the required capital investment in servers and data bases. Now with cloud technology it costs half the amount.
Delaney & Delaney’s Mr Delaney said that while the practice of law may be a lot more sophisticated these days, there is still a need to see clients face-to-face.
“People respect the experience they can see when you are sitting in front of them,” he said. “They can see the demeanour on your face when you tell them you are wasting their money by pursuing a matter or that they have a chance to win – you can’t do that on the computer.”
The Courier-Mail – 5 August 2016