All of our systems were redesigned to drive collaboration, for example, remuneration porting meetings. We took that to the next evolution. Structurally, we moved away from the traditional model of practice groups and service lines. And instead, we use K-Camp management, Suite teams, client teams, working groups, all sorts of things to get more connections between the practice areas.
We also have a balance sheet – this allows us to take long-term thinking to invest in technology, invest in training, take a really long-term view on things. And also, the offering that the group has is not just the traditional legal aspects but also company secretarial and more flexible models, so insourcing and outsourcing as well.
Nicole: Interesting direction, You created this model. You, obviously, have thought through the strategy, the approach, the approach to hiring. Did you have a model in mind? Were you copying something you saw in a different industry that you said – Okay, I’ve seen this. Although I haven’t seen this in law, I’ve seen this in some kind of other organization.
Nick: Yeah, definitely. Before we launched the business, we spent a couple of years doing planning, research, interviews. I was really lucky; I got to speak to CEOs, entrepreneurs, even elite soldiers, Olympic athletes, super coaches. I really did hundreds of hours of research, looking at different models out of everything from business to the military to sport and tried to kind of pull together what would work for us to build a high-performing team, reduce churn, get better engagement, and so on.
Nicole: Very interesting. So, you’ve created the model. You’re two years and a few months, I believe, in. What’s been surprising? What has occurred that you didn’t expect to occur?
Nick: That’s an interesting question. We sort of felt that that the CX, or client experience, and the PX, or people experience, were going to be different, and we would run the two of those strategies separately. But what we found is actually that they were very much interrelated. So, in other words, clients really value their culture.
So, if you take a step back, we believe that most lawyers love what they do. They like solving problems for their clients, they like helping their clients, but Big Law kept on getting in the way. So, everything from how you open a file to running a conflict check – All those things were slow and bureaucratic – even simple things like publishing an article would go off to get approved from someone overseas—a very frustrating environment.
So, we felt if we could get rid of those frustrations, the people experience would be better. What we found, or the big surprise was that clients were choosing us over competitors because of our great culture. And what was really interesting is that based on a survey in Australia – I haven’t actually released it yet, but I’ll be releasing it soon – I got to see a picture of the survey results, and I found that something like 34% of clients chose a firm due to the alignment of culture. So, when you have the same expertise and the same personal connection, culture becomes the decider, which is fascinating.
Nicole: It is. It’s interesting because I’d love to hear more about how that appears in the day-to-day work, right? So, how and where you see that I mean, Do you actually see the culture of your customers and the culture of your firm blending? Is that a way that you’re attracting customers? With current customers, Are you seeing a difference in the relationship? Really, how has that manifested itself in the day-to-day business of law at Hamilton Locke?
Nick: Yes, I think clients want to see someone that reflects their own values and their own behaviors. So, this idea that they will come to you because you’re an expert in a technical area doesn’t hold as true – So, to the extent that your culture is nurturing and energetic, and their culture is also nurturing and energetic, they’ll sort of warm to you. So, in every part of the interaction, the culture sort of shines through.
So, a simple example could be the speed at which you return a phone call. So, if a client’s operating real-time, and you’re also operating real-time, they’ll warm to that.
Another example would just be around diversity. At our firm and its culture is very inclusive and has a great deal of diversity – not just in terms of gender balance. But a simple example could be – We have some 25 different nationalities represented in the firm. People have worked and traveled and lived and studied all around the world and have all different backgrounds. That’s the same with our clients. Our clients aren’t just all middle-aged, white men. There’s actually a huge gender diversity and diversity of background and so on.
And also, I think another sort of nuance to the diversity angle is it’s not just about being lawyers – We need to have a diversity of thought and skillset. So, we very deliberately built out the business to have other skillsets at all levels. So, the management structure, the board, and so on have people not just from legal backgrounds. But of the Big Law firms, the management teams are all ex-lawyers. And what we tried to do was get a board and a management team that had had different experiences. So, from technology, from finance with talent from leadership, and so on. So, we’ve taken a very broad perspective to make sure that we can learn from other industries and other experiences. And, again, clients like that.
Nicole: Now, I can see that, obviously, you’ve had a great experience. You’ve been able to take that white piece of paper, and do research, create a firm that takes a different approach. What is that success story that, for you, tells you you’ve gone down the right road?
Nick: Some of it’s going back to basics around just our approach in a more granular way. So, I think part of it is looking at clients’ problems holistically, not just through the lens of your narrow, technical expertise – that’s one part of it. Another part of it is having the courage to not sit on the fence. So, I think a lot of, particularly Black-level Lawyers, tend to say that the problem is this, the legislation won’t let you do this. So, they’re kind of a traffic light based up you. Whereas our approach is to find a solution, be commercial. Don’t sit on the fence. Call out if you think the client shouldn’t do the deal even.
Another thing for us is really building community, so we’ll spend a lot of our time – not just having one-on-one coffees – but actually building a rich, deep community that brings together key stakeholders in a niche. An example of that would be the Growth Awards, which is – We’ve been doing that for nine years now. It’s got 4,000 growth companies and a best turnover of $300 – $400 – $500 million. It’s a really big, deep, active community. So, with all those things in the background, we can then connect the dots.
So, our approach is really don’t just be the lawyer – Use your networks and your Business Nest to make deals happen. So, there’s a whole series of deals where we wouldn’t have gotten the work, the legal work unless we were a bit more active. So, we would be doing weekly calls with key private equity funds, family offices, several law firms, alternative credit funds, and gathering the market intelligence and then connecting the dots. So, some of the really big private equity funds would do fortnightly calls with us.
And I think the reality is there are so many lawyers that are doing private equity or M&A or corporate finance to stand out in the pack, particularly as a challenger brand. We had to do something really differently. Whether or not the deal goes ahead that we’ve helped originate is slightly less relevant. What we’re actually doing is having complex conversations with those big clients about what their needs are, what their challenges are. And the problems they’re facing are not always just one, narrow area of law. It’s a broad, complex, multi-faceted problem.
But by having a say at the table to work with them to connect the dots, we might find them a director or a chairperson or a CEO or actually a source of capital or a company to buy. So, we would have dozens of files where our role was to be just a bit more than the lawyer – to be commercial, to connect the dots – And that’s worked really well for us.
Nicole: No, I can see that partnership, especially in M&A transactions and private equity opportunities – There’s a lot of trust that goes into that. In every new adventure, there are lessons learned. Was there something that has occurred, either from your initial vision or the vision of the team, that has been less than successful or something that has been harder in practice or harder to execute in practice than you had imagined?
Nick: There are lots of things that have been less than successful and lots of things that have been harder than we imagined. Because at the end of the day, what you’re doing is breaking habits of a lifetime. So, for us, we were so used to having a big office and so used to having a big secretary pool and so on. We had all these luxuries. So, we had to break every part of the business to go from to open plan to paperless to less support and so on in the back office.
But the biggest problem was probably time-based billing. Part of the strategy was really to move away from time-based billing. Lawyers hate it. Clients hate it. If you’re a lawyer, it’s so boring. It’s such an added administrative hassle to keep entering timesheets. Worse still, it gets really stressful when management are chasing you – Where’s your timesheet? Where’s your timesheet? And the clients hate because there’s no real correlation between the matter of the time that was input and the result. So that, you could have an inexperienced lawyer spend 50 hours researching something that a more experienced person could do in five hours. But the time input has no link to the value you created to a client. A really experienced, talented lawyer or partner could walk into a meeting that’s had lots of frustration and politics and no movement. And just through their experience and their style and approach, get things moving again, solve the problem in a win-win style. That could save a $100 million deal from falling over. Well, what’s the real value to the client?
The other thing with the billable time is that things that sort of track and reward one thing only, and that is how much time you put on the clock. If you want to try and reward other things like is someone living our values? Is someone supporting our culture? Are they active on the non-financial things like training or building community and so on? How do you stop thinking just about time and start thinking about how would you measure and track those things? That was the strategy. And we certainly tried all sorts of things like retainers and fixed price and all-you-can-eat models. So, a large number of our files on an alternative fee arrangement. But the reality or the thing that’s been less successful than I’d like is that time still is infused in the fabric of the law firm. So, everyone still thinks about how many billable hours they’re doing. Clients still want to see breakdowns of time that’s been input and hourly rates. And we’re still trying to measure people on their contribution on the non-financial stuff through the hours that they’ve put in. So, we found that that habit of thinking about everything from a time perspective had to be broken.