It is no secret that over the last few years most firms have faced a reduced level of partner profit (or no profit at all), often resulting in decisions to reduce team sizes. Others have found themselves faced with short working hours or pay reductions.
As tax rates rise post-election, along with VAT rates, it is likely that this cycle is not yet at an end.
Given that many firms adopt a time-honoured policy of permanent staff on fixed hours, this decrease in staff is inevitable. The UK Economy may have just enjoyed one of the longest periods of sustained economic growth, but this has been the exception, not the rule. I hope that firms will start to see the benefit of a core permanent team cooperating with a circle of trained flexible staff who help with spikes in workflow. When times are good, using outsourced/contract/consultant staff enables the firm to take advantage of the increasing number of skilled people who prefer flexible working. This actually brings stability to the workplace as fewer permanent staff are put at risk when the market contracts. It also benefits the partners as their profits are protected.
But the result of this contraction is that many solicitors and partners find themselves looking at alternative posts at other firms. The question is, when an offer comes in from another firm, do you jump? Often the answer is an unequivocal “Yes”. Faced with even shorter working at your existing firm, or potentially no position at all, how could the answer be “No”?
So here are some simple questions for those considering joining a new firm as a fee earner:
- Is fee income rising or falling in percentage terms year on year?
- How many people have been made redundant over the last 24 months?
- Have rates of pay or working hours for existing staff been affected by the economy over the last 24 months?
If you are not comfortable asking these questions, get your recruitment consultant to do it for you.
If you are joining as a partner, then ensure that you know or have seen
- a cash flow projection for at least the next twelve months
- how the firm is financed (cash in the bank or overdraft)
- what banking facilities the firm has and when they are reviewable
- Profit & Loss projections for the next twelve months
Not sure what to ask or what to do with the answers? These are some of the answers that BigWig Network will be discussing over the coming months. I look forward to seeing you at our Last Wednesday meetings.
BigWig Legal Network
What is BigWig Legal Network?
The deregulation of UK legal structures will have a huge impact on how Law is practised and new legal services are offered. BigWig Legal Network is the UK’s first membership development organisation for fee earners in legal practices, priced for membership affordability, which will offer what legal professionals desire most of all: Accurate, dependable new insights and techniques for developing the legal services of the future.
Find out more at our Last Wednesday meetings.