The article below was published on 6 August 2020 in The Times.
The vicious City-style business model works for no-one but executives. There is a way to make both sustainable profit and social investment.
Few organisations do hierarchy like law firms: concentrating the lion’s share of pay and power at the top, derived from the workers at the bottom.
It is taken as given that all lawyers aspire to become equity partners in a brutal world of up-or-out in modern large law firms in an approach that pays lip service to any wider social responsibility. It is designed to be elitist, for the benefit of the very few.
This feudal hierarchy does not recognise structural inhibitions to performance or success,
such as having a family to look after or not having the connections or confidence of a privileged background. Even today, the gender pay gap is widening in the City’s biggest law firms, while health and wellbeing among lawyers is reported to be at an all-time low.
This model is not a sustainable one in the 2020s. Within the last few weeks, a couple of so-called Magic Circle firms reported that their profits per equity partner had slipped to a mere £1.6 million. As junior staff in the City and at other large commercial law firms face pay cuts or P45s, is this really the best the profession can do?
It absolutely is not — lawyers can be successful, profitable and ethical without failing in their wider duties to society.
There is a model that is an antidote to greed in the legal profession and instead involves
wealth-sharing with clients, lawyers and society as one ecosystem, each benefiting from the whole.
It is obvious that there are too many bad “isms” in the modern practice of corporate business law: sexism, racism, ageism, elitism. But they can be designed out — all lawyers can be treated and paid the same for providing a good service at competitive prices. And importantly, firms can give back to society in a meaningful way.
Lawyers at the firm I launched two years ago, Aria Grace Law, retain 90 per cent of their fees as we have removed a redundant and expensive executive layer. As the lawyers get paid more, they can charge clients less. And all our profits after overheads will go to charity.
While plenty of other firms make charitable donations, for us it is not a discretionary spend — it is an integral part of who we are.
For law firms, giving to charity may be seen as an easy way to engage in “virtue signalling”. However, society demands more and we support growing charities that require companies to prove that they genuinely live up to their stated principles.
Law firms should have demonstrable societal value. At a time when businesses need to prove their principles with deeds rather than words, this should be the business model for the future.
Lindsay Healy is the founder of Aria Grace Law, which is based in London.