By Rita Jong | The Heat
Jack (not his real name) has been in the legal fraternity for over a decade. He has worked in medium and large-sized law firms. But it was only a few years ago that he decided to venture out on his own.
Unlike his many lawyer friends, Jack has his priorities set out. He was going to choose the types of cases he wanted to handle, find ways to cut overheads and be his own boss, so that he can enjoy a little more of life.
“I have an office, but I am the only lawyer. My clients are based on referrals and I choose the type of cases I want to handle. I do not handle conveyancing or sale and purchase agreements because I do not want to hire a clerk.
“I only have one staff who handles administrative work,” he says, adding that he uses part-time dispatch clerks to keep his overheads to a minimum.
Jack’s firm is among a growing number of small law firms that are finding ways to keep overheads low.
Usually, a small law firm can have up to five lawyers who each operate independently, although they work out of the same office. They would also work long hours to cope with their cases and set their individual professional fees.
But for Jack, going solo was a personal choice, of wanting a better quality of life and not spend his time slogging long hours at the office.
New ways of doing old things
Lawyer Edmund Bon has long been pushing to break away from the traditional and rigid way of how a law firm should be structured. He calls it “radicalising lawyers”.
Through his firm, he initiated a pro bono project called The Collective of Applied Law and Legal Realism (CALR), which was launched in July. “CALR’s building blocks are the three Rs – revolutionising the law, radicalising lawyers, and re-shaping legal education.
“Much like in the United Kingdom, each lawyer is self-employed. All of them have a place in a firm and share costs, but they are not partners. The firm has a generic name, for example, ‘Matrix Chambers’, and each self-employed lawyer earns his own keep but at a cost that is reasonable,” says Bon, who is head of chambers of BON, Advocates.
This way, he says the economies of scale are achieved, while lawyers can manage their own time and decide on the cases they wish to take on. However, this model is not allowed here.
Currently, only sole proprietorships or partnerships are allowed here. This, Bon says, is an archaic model where the elite class of partners earn from the work of their juniors.
“There is a huge income gap that does not commensurate with the work put in. For example, if you earn RM4,000 salary, but bring in RM40,000 a month in profits, are you fairly paid for your work?
“That is probably why so many junior lawyers venture out on their own after one or two years in practice. More than 90% of the Bar is made up of small firms of five members or fewer. Each set-up has to have its own start-up costs, and this is a waste of resources,” he says.
Group legal practice
According to him, the Bar Council has, in principle, approved the group legal practice, where small firms of five members or fewer can band together under one roof. But, they cannot use a generic name for branding purposes.
“The problem is that we have large law firms with many partners. This achieves scale, but there is nothing to assist small firms that form 90% of the Bar. Not everyone wants to enter into a partnership as many have gone sour.
“The Government forced, and the Bar Council relented, to allow foreign law firms to practise in the country. But there are no avenues for small firms to compete with them on a more level-playing field,” he says.
Bon says the Bar is now pushing for the chambers model instead of the group legal practice.
“The chambers model will help lawyers reduce costs, while allowing clients to benefit from additional expertise through the particular lawyer they have hired.
“Large law firms already have ‘group practices’ and market this to attract clients. The chambers model is not much different, except that members of the chambers are not partners,” he says.
He says this model would benefit people as lawyers no longer need to be afraid of their bosses to take time off for human rights or pro bono work, or simply to attend a pro-opposition rally.
“We are empowering lawyers and allowing them to be themselves rather than part of a huge machinery that churns out money for an elite class of partners.”
The chambers model, he says, fights oppression in the industry and deals with the many complaints from lawyers about work-life balance and income inequality. However, Bon says the Bar Council is holding back on the chambers model.
“But we have to accept new ways of doing old things, and we hope to push this new idea with the Bar Council and garner support from other law firms,” he says.
Models not allowed
Bar Council vice-president George Varughese says that currently, the group legal practice and chambers model of practice are not allowed.
“However, the Bar Council is in the midst of finalising the rules of group practices. Once finalised and approved, the group practice will be another mode of practice available for small firm practitioners, which consist of no more than five lawyers.
“Once these rules are approved, small firm practitioners can set up practices as a group consisting of a total of no more than 25 lawyers. Thus, they will share resources such as the library, conference room, and non-essential staff,” he says.
This, Varughese says, would save costs and enhance the productivity of each of the firms in the group. Varughese adds that there should not be any adverse ethical issues arising from having a group practice provided “sufficient safeguards, such as non-disclosure agreements by staff and lawyers, are put in place”.
However, he declined to comment on the chambers model on grounds that the Bar has “yet to study this system”.
Response to the chambers model has either been “progressive” or “radical”. But Bon says the push for it was borne out of hearing complaints for more than 16 years.
“This is one solution. Hopefully, it will ‘disrupt’ the legal profession in a good way. Of course there are firms that will not support the idea, but we need to discuss it as the legal profession is being disrupted in all sorts of ways, including by the use of technology,” he says.
Indeed, many small law firms are adapting to changes to deliver their services more effectively. Those that don’t may in the future find themselves trying to keep up with those that are changing with the tide.