Contrary to many current recommendations that suggest specialisation is part of the answer to the puzzle of profitability in an increasingly tricky market, one law firm has taken the opposite approach - and it’s paid off.
Australian firm Mills Oakley
Lawyers are one of a small percentage of the mid-tier market to have vastly expanded its partner numbers and legal employment. It’s also just had its best year ever of revenue growth.
In contrast to what some industry experts are now suggesting, a central part of the firm’s strategy is offering a full-service model with the goal of becoming a leading Australian law firm.
CEO John Nerurker told Australasian Lawyer
that this strategy among others, has seen Mills Oakley enjoy 10 consecutive years of double digit revenue growth and finish the year (FY14) about 32% up on last year.
The number of fee earners in the firm has jumped 65% (from 106 earners to 175 earners) in the past 12 months, and partner numbers have also risen sharply by 30% from 44 partners last year to 57 this year.
Nerurker says it’s important for the firm to strike a balance between internal partner promotions and lateral hires – and as an example, of the 10 partner appointments in 2013, six were nabbed externally.
“For a firm of our size we have also made an unusually large round of promotions this year, including nine current partners moving into our equity ranks,” he says. “There are firms much larger than us that are only promoting a fraction of that number.”
And as well as offering clients maximum choice in terms of fee arrangements, Nerurker says a large part of the firm’s success has come from studying the mistakes made by top tier firms and avoiding them.
“We’ve learnt through interviewing scores of partner candidates from other firms what we need to do to avoid their mistakes,” he says. “One of the easiest ways to grow is not to lose your staff in the same way your competitors do, and we’re pleased to say we run a pretty tight ship in that respect.”
But of all of the strategies used at the firm, one of the keys to success has centred on a clear decision - in contrary to many other firms - not to specialise, and instead grow through a full-service model.
“When traditional top-tier firms started expanding offshore in recent years, we saw an opportunity to give clients the choice of working with a firm that was wholly focussed on the Australian market,” Nerurker says. “So we asked ourselves what attributes corporate clients would expect if they were going to give us work that historically went to the top tier.”
As well as recognising that depth of team across multiple offices was important, the firms saw the importance of extending its capabilities to offer the full suite of practice areas that the large corporate clients want.
Nerurker says this has been vital in a number of ways, including:
- Developing a depth of knowledge about the client’s business issues that enables Mills Oakley to approach solutions in a more coordinated way than if the client was working with several firms;
- Recognising commercial opportunities for the client, and drawing on knowledge across practice teams that work closely together;
- Deliver cost savings for clients through the efficiencies that are created.
Mills Oakley has plans to continue its successful growth strategy and remain full service while still offering specialist capabilities in the future.
As well as a plan to continue adding to the team, the firm is focussed on new geographies. Canberra is the next office location on the cards, but Nerurker says other cities are on the drawing board too.
He says obviously growth is important, but as the law industry evolves he thinks we’ll see a shift away from the terms “top-tier” and “mid-tier” and instead towards “national” and “international” firms.
“I’m proud to say that all our strategies are externally focused and client facing rather than inward looking and navel gazing,” Nerurker says. “Being successful with a full-service model involves a careful balancing act between extending team capabilities and not exposing the firm to financial stress through unsustainable growth. Our 10 consecutive years of double-digit fee growth shows that we have achieved the right balance and it’s a track record we are keen to protect.”