George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference
-
Upload
beatoncapital -
Category
Law
-
view
736 -
download
2
Transcript of George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference
![Page 1: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/1.jpg)
Clio Cloud Conference 2014 #ClioCloud9
Outside investment in Law Firms:
The Aussie Exampleby Dr George Beaton
@grbeaton_law
@NewLawNewRules
![Page 2: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/2.jpg)
There is as much gold in the country I’m going to as there is in California
Edward Hargraves
![Page 3: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/3.jpg)
There is as much gold in the country I’m going to as there is in California
Edward Hargraves
![Page 4: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/4.jpg)
There is as much gold in the country I’m going to as there is in California
Edward Hargraves
![Page 5: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/5.jpg)
There is as much gold in the country I’m going to as there is in California
Edward Hargraves
![Page 6: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/6.jpg)
There is as much gold in the country I’m going to as there is in California
Edward Hargraves
![Page 7: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/7.jpg)
There is as much gold in the country I’m going to as there is in California
Edward Hargraves
![Page 8: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/8.jpg)
There are 250,000+ practices in the English speaking world…
© 2014 Beaton Capital 8
-50000
0
50000
100000
150000
200000
250000
England and Wales 10,202
![Page 9: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/9.jpg)
There are 250,000+ practices in the English speaking world…
© 2014 Beaton Capital 9
-50000
0
50000
100000
150000
200000
250000
England and Wales 10,202
-50000
0
50000
100000
150000
200000
250000
South Africa 10,595
![Page 10: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/10.jpg)
There are 250,000+ practices in the English speaking world…
© 2014 Beaton Capital 10
-50000
0
50000
100000
150000
200000
250000
England and Wales 10,202
-50000
0
50000
100000
150000
200000
250000
Singapore 900
-50000
0
50000
100000
150000
200000
250000
South Africa 10,595
![Page 11: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/11.jpg)
There are 250,000+ practices in the English speaking world…
© 2014 Beaton Capital 11
-50000
0
50000
100000
150000
200000
250000
England and Wales 10,202
-50000
0
50000
100000
150000
200000
250000
Hong Kong 784
-50000
0
50000
100000
150000
200000
250000
Singapore 900
-50000
0
50000
100000
150000
200000
250000
South Africa 10,595
![Page 12: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/12.jpg)
There are 250,000+ practices in the English speaking world…
© 2014 Beaton Capital 12
-50000
0
50000
100000
150000
200000
250000
England and Wales 10,202
-50000
0
50000
100000
150000
200000
250000
Hong Kong 784
-50000
0
50000
100000
150000
200000
250000
Singapore 900
-50000
0
50000
100000
150000
200000
250000
Australia 18,059
-50000
0
50000
100000
150000
200000
250000
South Africa 10,595
![Page 13: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/13.jpg)
There are 250,000+ practices in the English speaking world…
© 2014 Beaton Capital 13
-50000
0
50000
100000
150000
200000
250000
England and Wales 10,202
-50000
0
50000
100000
150000
200000
250000
Hong Kong 784
-50000
0
50000
100000
150000
200000
250000
Singapore 900
-50000
0
50000
100000
150000
200000
250000
Australia 18,059
-50000
0
50000
100000
150000
200000
250000
New Zealand 1,823
-50000
0
50000
100000
150000
200000
250000
South Africa 10,595
![Page 14: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/14.jpg)
There are 250,000+ practices in the English speaking world…
© 2014 Beaton Capital 14
-50000
0
50000
100000
150000
200000
250000
England and Wales 10,202
-50000
0
50000
100000
150000
200000
250000
Hong Kong 784
-50000
0
50000
100000
150000
200000
250000
Singapore 900
-50000
0
50000
100000
150000
200000
250000
Australia 18,059
-50000
0
50000
100000
150000
200000
250000
New Zealand 1,823
-50000
0
50000
100000
150000
200000
250000
Canada 34,900
-50000
0
50000
100000
150000
200000
250000
South Africa 10,595
![Page 15: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/15.jpg)
There are 250,000+ practices in the English speaking world…
© 2014 Beaton Capital 15
-50000
0
50000
100000
150000
200000
250000
England and Wales 10,202
-50000
0
50000
100000
150000
200000
250000
Hong Kong 784
-50000
0
50000
100000
150000
200000
250000
Singapore 900
-50000
0
50000
100000
150000
200000
250000
Australia 18,059
-50000
0
50000
100000
150000
200000
250000
New Zealand 1,823
-50000
0
50000
100000
150000
200000
250000
Canada 34,900
-50000
0
50000
100000
150000
200000
250000
-1 0 1 2 3 4 5 6 7 8 9
USA 177,891
-50000
0
50000
100000
150000
200000
250000
South Africa 10,595
![Page 16: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/16.jpg)
There are 250,000+ practices in the English speaking world…
© 2014 Beaton Capital 16
-50000
0
50000
100000
150000
200000
250000
England and Wales 10,202
-50000
0
50000
100000
150000
200000
250000
Hong Kong 784
-50000
0
50000
100000
150000
200000
250000
Singapore 900
-50000
0
50000
100000
150000
200000
250000
Australia 18,059
-50000
0
50000
100000
150000
200000
250000
New Zealand 1,823
-50000
0
50000
100000
150000
200000
250000
Canada 34,900
-50000
0
50000
100000
150000
200000
250000
-1 0 1 2 3 4 5 6 7 8 9
USA 177,891
…in a substantial and vitally important industry-50000
0
50000
100000
150000
200000
250000
South Africa 10,595
![Page 17: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/17.jpg)
The Beaton consultancies are specialists in the professions…
© 2014 Beaton Capital 17
LawAccountingConsulting
engineeringManagement
consulting
![Page 18: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/18.jpg)
The Beaton consultancies are specialists in the professions…
© 2014 Beaton Capital 18
LawAccountingConsulting
engineeringManagement
consulting
Research. Reveal.
Market research
• Firm brands
• Client satisfaction
• Staff engagements
• Employer brands
![Page 19: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/19.jpg)
The Beaton consultancies are specialists in the professions…
© 2014 Beaton Capital 19
LawAccountingConsulting
engineeringManagement
consulting
Bigger. Better. Both?Research. Reveal.
Market research
• Firm brands
• Client satisfaction
• Staff engagements
• Employer brands
• Strategy
• Mergers & acquisitions
• Owners’ exits and divestments
• Balance sheet optimisation
• Governance
![Page 20: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/20.jpg)
The Beaton consultancies are specialists in the professions…
© 2014 Beaton Capital 20
LawAccountingConsulting
engineeringManagement
consulting
Bigger. Better. Both?Research. Reveal.
Market research
• Firm brands
• Client satisfaction
• Staff engagements
• Employer brands
• Strategy
• Mergers & acquisitions
• Owners’ exits and divestments
• Balance sheet optimisation
• Governance
• Executive coaching
• Transformation coaching
• Supervised coaching
• Transition coaching
![Page 21: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/21.jpg)
© 2014 Beaton Capital 21
Introduced in the 1890s, the Cravath
system led to the emergence of the BigLaw model in
the 1950s
![Page 22: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/22.jpg)
© 2014 Beaton Capital 22
![Page 23: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/23.jpg)
© 2014 Beaton Capital 23
10 Hallmarks of the BigLaw business model
![Page 24: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/24.jpg)
© 2014 Beaton Capital 24
10 Hallmarks of the BigLaw business model
1. Top talent
2. Technical excellence
3. Lawyers selling and producing
4. Personal brands
5. Sustaining technology
6. Leverage full-time lawyers
7. Tournament for partnership
8. Few owners
9. Partnership
10. High hourly rates
![Page 25: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/25.jpg)
© 2014 Beaton Capital 25
10 Hallmarks of the BigLaw business model
1. Top talent
2. Technical excellence
3. Lawyers selling and producing
4. Personal brands
5. Sustaining technology
6. Leverage full-time lawyers
7. Tournament for partnership
8. Few owners
9. Partnership
10. High hourly rates
1. High salaries
2. Culture of perfection
3. Lawyer-centricity
4. Partner-centricity
5. Innovation laggards
6. High fixed cost paradigm
7. High utilisation drive
8. PPEP maximised
9. Profit today expectations
10. Clients bear the risk
![Page 26: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/26.jpg)
© 2014 Beaton Capital 26
First rule of strategy: Understand what’s happening…
…to avoid short-term blinkers
Competitive rivalry
amongst incumbents
New entrants to the market
Client demand for
services
Substitutes for the
incumbents
Supply of talent
![Page 27: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/27.jpg)
The perfect storm of supertemps and virtual workspaces are moving the workforce online…
© 2014 Beaton Capital 27
TALENT MARKET | NEW AGE KNOWLEDGE WORKERS
![Page 28: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/28.jpg)
In a mature industry, price competition diminishes profitability…
© 2014 Beaton Capital 28
COMPETITIVE RIVALRY | PRICE COMPETITION WINS THE SPRINT NOT THE MARATHON
2008 2009 2010 2011 2012 2013 2014
Legal industry’s client perception of fees charged on the 0 – 10 point scale
Q: “How would you rate the fees charged by [Firm] over the last 12 months, where 0 = ‘extremely low fees’ and 10 = ‘extremely high fees’?”
6.81
6.92
6.80
6.726.69 6.68
6.62
…leading to progressive commoditisation
Source: Beaton Benchmarks, Australia
![Page 29: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/29.jpg)
Clients are looking for long-term partners to meet their complex legal needs…
© 2014 Beaton Capital 29
CLIENT BUYING POWER | RISE OF PROCUREMENT
6.79 7.08 7.36 7.267.68 7.55
8.07
9.00
One Two Three Four Five Six Seven Eight ormore
Clients’ rating of their professional service firm on the 0 – 10 point scale
Source: Beaton Benchmarks, Australia
Practice areas used
….this also applies to the number of offices used
![Page 30: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/30.jpg)
New entrants from the US and UK
© 2014 Beaton Capital 30
NEW ENTRANTS | ENTRY OF INTERNATIONAL LAW FIRMS
1983
2011
1997
2007
2010
2009
2011
1998
2006
2010
1989
2009
2012
2006
2012
20112003
2012
2012
2012
2013
2013
2013
2013
2013
1964
![Page 31: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/31.jpg)
Technology and innovation are enabling ‘upstarts’ in the professions…
© 2014 Beaton Capital 31
2020s1990s 2000s 2010s1980s
Information Technology Outsourcing (ITO)
Evolution of outsourcing
SUBSTITUTES | EVOLUTION OF OUTSOURCING
![Page 32: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/32.jpg)
Technology and innovation are enabling ‘upstarts’ in the professions…
© 2014 Beaton Capital 32
2020s1990s 2000s 2010s1980s
Information Technology Outsourcing (ITO)
Business Process Outsourcing (BPO)
Evolution of outsourcing
SUBSTITUTES | EVOLUTION OF OUTSOURCING
![Page 33: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/33.jpg)
Technology and innovation are enabling ‘upstarts’ in the professions…
© 2014 Beaton Capital 33
2020s1990s 2000s 2010s1980s
Information Technology Outsourcing (ITO)
Business Process Outsourcing (BPO)
Knowledge Process Outsourcing (KPO)
Evolution of outsourcing
SUBSTITUTES | EVOLUTION OF OUTSOURCING
![Page 34: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/34.jpg)
Technology and innovation are enabling ‘upstarts’ in the professions…
© 2014 Beaton Capital 34
2020s1990s 2000s 2010s1980s
Information Technology Outsourcing (ITO)
Business Process Outsourcing (BPO)
Knowledge Process Outsourcing (KPO)
Crowd sourcing
Evolution of outsourcing
SUBSTITUTES | EVOLUTION OF OUTSOURCING
![Page 35: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/35.jpg)
Technology and innovation are enabling ‘upstarts’ in the professions…
© 2014 Beaton Capital 35
2020s1990s 2000s 2010s1980s
Information Technology Outsourcing (ITO)
Business Process Outsourcing (BPO)
Knowledge Process Outsourcing (KPO)
Crowd sourcing
Artificial intelligence
Evolution of outsourcing
SUBSTITUTES | EVOLUTION OF OUTSOURCING
![Page 36: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/36.jpg)
Technology and innovation are enabling ‘upstarts’ in the professions…
© 2014 Beaton Capital 36
2020s1990s 2000s 2010s1980s
Information Technology Outsourcing (ITO)
Business Process Outsourcing (BPO)
Knowledge Process Outsourcing (KPO)
Crowd sourcing
Artificial intelligence
Knowledge-intensive industries need to rethink cherished practices
Evolution of outsourcing
SUBSTITUTES | EVOLUTION OF OUTSOURCING
![Page 37: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/37.jpg)
Technology and innovation are enabling ‘upstarts’ in the professions…
© 2014 Beaton Capital 37
2020s1990s 2000s 2010s1980s
Information Technology Outsourcing (ITO)
Business Process Outsourcing (BPO)
Knowledge Process Outsourcing (KPO)
Crowd sourcing
Artificial intelligence
Knowledge-intensive industries need to rethink cherished practices
Evolution of outsourcing
SUBSTITUTES | EVOLUTION OF OUTSOURCING
![Page 38: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/38.jpg)
NewLaw firms only have 1% market share, but are growing rapidly in influence…
© 2014 Beaton Capital 38
SUBSTITUTES | RISE OF NEWLAW
Revenue ($m)
![Page 39: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/39.jpg)
NewLaw firms only have 1% market share, but are growing rapidly in influence…
© 2014 Beaton Capital 39
SUBSTITUTES | RISE OF NEWLAW
Revenue ($m)
![Page 40: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/40.jpg)
© 2014 Beaton Capital 40
![Page 41: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/41.jpg)
10 Hallmarks of the NewLaw business model
© 2014 Beaton Capital 41
![Page 42: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/42.jpg)
10 Hallmarks of the NewLaw business model
© 2014 Beaton Capital 42
1. Requisite talent
2. Fit-for-purpose standards
3. Separate selling and production
4. Corporate brands
5. Disruptive technology
6. Flexi-work practices
7. No tournament
8. Corporate ownership
9. Non-lawyer shareholders
10. Fixed fees
![Page 43: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/43.jpg)
10 Hallmarks of the NewLaw business model
© 2014 Beaton Capital 43
1. Requisite talent
2. Fit-for-purpose standards
3. Separate selling and production
4. Corporate brands
5. Disruptive technology
6. Flexi-work practices
7. No tournament
8. Corporate ownership
9. Non-lawyer shareholders
10. Fixed fees
1. Effective division of labour
2. Culture of efficiency
3. Best use of talent
4. Not key person dependent
5. Provide ‘more for less’
6. Low fixed costs
7. Fewer inappropriate signals
8. Shareholder-value mindset
9. Long-term view on profit
10. Risk is shared with clients
![Page 44: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/44.jpg)
Australia’s deregulation story
![Page 45: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/45.jpg)
The Australian journey
© 2014 Beaton Capital 45
LEGAL PROFESSION (INCORPORATED LEGAL PRACTICES) ACT 2000
Jul 2001
![Page 46: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/46.jpg)
The Australian journey
© 2014 Beaton Capital 46
LEGAL PROFESSION (INCORPORATED LEGAL PRACTICES) ACT 2000
Jul 2001
May 2007
![Page 47: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/47.jpg)
The Australian journey
© 2014 Beaton Capital 47
LEGAL PROFESSION (INCORPORATED LEGAL PRACTICES) ACT 2000
Jul 2001
May 2007
Aug 2007
![Page 48: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/48.jpg)
The Australian journey
© 2014 Beaton Capital 48
LEGAL PROFESSION (INCORPORATED LEGAL PRACTICES) ACT 2000
Jul 2001
May 2007
Aug 2007
May 2013
![Page 49: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/49.jpg)
The Australian journey
© 2014 Beaton Capital 49
LEGAL PROFESSION (INCORPORATED LEGAL PRACTICES) ACT 2000
Jul 2001
May 2007
Aug 2007
May 2013
![Page 50: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/50.jpg)
The Australian journey
© 2014 Beaton Capital 50
LEGAL PROFESSION (INCORPORATED LEGAL PRACTICES) ACT 2000
Jul 2001
May 2007
Aug 2007
May 2013
?
![Page 51: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/51.jpg)
Slater & Gordon has grown at 32% CAGR from $45m to $418m and completed 38 acquisitions since listing
© 2014 Beaton Capital 51
![Page 52: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/52.jpg)
Slater & Gordon has grown at 32% CAGR from $45m to $418m and completed 38 acquisitions since listing
© 2014 Beaton Capital 52
![Page 53: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/53.jpg)
Slater & Gordon has grown at 32% CAGR from $45m to $418m and completed 38 acquisitions since listing
© 2014 Beaton Capital 532006
Maurice May & Co
2006Reid & Reid
2006Gary Robb & Assoc
2006Paul J Keady & Assoc
![Page 54: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/54.jpg)
Slater & Gordon has grown at 32% CAGR from $45m to $418m and completed 38 acquisitions since listing
© 2014 Beaton Capital 542006
Maurice May & Co
2006Reid & Reid
2006Gary Robb & Assoc
2006Paul J Keady & Assoc
2008D’Arcys Solicitors
2008McClellands
2008Edwin Abdo & Assoc
2008Nagle & McGuire
2008Crane Butcher McKinnon
2008Blessington Judd
2008Secombs
2008Quinn & Scattini
![Page 55: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/55.jpg)
Slater & Gordon has grown at 32% CAGR from $45m to $418m and completed 38 acquisitions since listing
© 2014 Beaton Capital 552006
Maurice May & Co
2006Reid & Reid
2006Gary Robb & Assoc
2006Paul J Keady & Assoc
2008D’Arcys Solicitors
2008McClellands
2008Edwin Abdo & Assoc
2008Nagle & McGuire
2008Crane Butcher McKinnon
2008Blessington Judd
2008Secombs
2008Quinn & Scattini
2009John Micallef & Co
2009Carter Capner
2009Long Howland
![Page 56: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/56.jpg)
Slater & Gordon has grown at 32% CAGR from $45m to $418m and completed 38 acquisitions since listing
© 2014 Beaton Capital 562006
Maurice May & Co
2006Reid & Reid
2006Gary Robb & Assoc
2006Paul J Keady & Assoc
2008D’Arcys Solicitors
2008McClellands
2008Edwin Abdo & Assoc
2008Nagle & McGuire
2008Crane Butcher McKinnon
2008Blessington Judd
2008Secombs
2008Quinn & Scattini
2009John Micallef & Co
2009Carter Capner
2009Long Howland
2010Trilby Misso
2010Kenyons
2010McGlades
2010Stewart & Nobles
2010Adam Leylands
![Page 57: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/57.jpg)
Slater & Gordon has grown at 32% CAGR from $45m to $418m and completed 38 acquisitions since listing
© 2014 Beaton Capital 572006
Maurice May & Co
2006Reid & Reid
2006Gary Robb & Assoc
2006Paul J Keady & Assoc
2008D’Arcys Solicitors
2008McClellands
2008Edwin Abdo & Assoc
2008Nagle & McGuire
2008Crane Butcher McKinnon
2008Blessington Judd
2008Secombs
2008Quinn & Scattini
2009John Micallef & Co
2009Carter Capner
2009Long Howland
2010Trilby Misso
2010Kenyons
2010McGlades
2010Stewart & Nobles
2010Adam Leylands
2011Rob Powe
2011Keddies
![Page 58: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/58.jpg)
Slater & Gordon has grown at 32% CAGR from $45m to $418m and completed 38 acquisitions since listing
© 2014 Beaton Capital 582006
Maurice May & Co
2006Reid & Reid
2006Gary Robb & Assoc
2006Paul J Keady & Assoc
2008D’Arcys Solicitors
2008McClellands
2008Edwin Abdo & Assoc
2008Nagle & McGuire
2008Crane Butcher McKinnon
2008Blessington Judd
2008Secombs
2008Quinn & Scattini
2009John Micallef & Co
2009Carter Capner
2009Long Howland
2010Trilby Misso
2010Kenyons
2010McGlades
2010Stewart & Nobles
2010Adam Leylands
2011Rob Powe
2011Keddies
2012Russell Jones & Walker
2012Conveyancing Works
2012Bussoletti Lawyers
2012David Nagle Lawyers
2012Hilliard & Associates
![Page 59: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/59.jpg)
Slater & Gordon has grown at 32% CAGR from $45m to $418m and completed 38 acquisitions since listing
© 2014 Beaton Capital 592006
Maurice May & Co
2006Reid & Reid
2006Gary Robb & Assoc
2006Paul J Keady & Assoc
2008D’Arcys Solicitors
2008McClellands
2008Edwin Abdo & Assoc
2008Nagle & McGuire
2008Crane Butcher McKinnon
2008Blessington Judd
2008Secombs
2008Quinn & Scattini
2009John Micallef & Co
2009Carter Capner
2009Long Howland
2010Trilby Misso
2010Kenyons
2010McGlades
2010Stewart & Nobles
2010Adam Leylands
2011Rob Powe
2011Keddies
2012Russell Jones & Walker
2012Conveyancing Works
2012Bussoletti Lawyers
2012David Nagle Lawyers
2013JSP Solicitor
2013Clark Toop & Taylors
2013Marrons
2013Fiocco’s Lawyers
2012Hilliard & Associates
2013Gibson & Gibson
2013Taylor Vinters
2013Fentons Solicitors
2013Goodmans Law
2013John Pickering
2013Chadwick Lawrence
![Page 60: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/60.jpg)
Slater & Gordon has grown at 32% CAGR from $45m to $418m and completed 38 acquisitions since listing
© 2014 Beaton Capital 602006
Maurice May & Co
2006Reid & Reid
2006Gary Robb & Assoc
2006Paul J Keady & Assoc
2008D’Arcys Solicitors
2008McClellands
2008Edwin Abdo & Assoc
2008Nagle & McGuire
2008Crane Butcher McKinnon
2008Blessington Judd
2008Secombs
2008Quinn & Scattini
2009John Micallef & Co
2009Carter Capner
2009Long Howland
2010Trilby Misso
2010Kenyons
2010McGlades
2010Stewart & Nobles
2010Adam Leylands
2011Rob Powe
2011Keddies
2012Russell Jones & Walker
2012Conveyancing Works
2012Bussoletti Lawyers
2012David Nagle Lawyers
2013JSP Solicitor
2013Clark Toop & Taylors
2013Marrons
2013Fiocco’s Lawyers
2012Hilliard & Associates
2013Gibson & Gibson
2013Taylor Vinters
2013Fentons Solicitors
2013Goodmans Law
2013John Pickering
2013Chadwick Lawrence
2014Pannone Solicitors
![Page 61: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/61.jpg)
Slater & Gordon has grown at 32% CAGR from $45m to $418m and completed 38 acquisitions since listing
© 2014 Beaton Capital 612006
Maurice May & Co
2006Reid & Reid
2006Gary Robb & Assoc
2006Paul J Keady & Assoc
2008D’Arcys Solicitors
2008McClellands
2008Edwin Abdo & Assoc
2008Nagle & McGuire
2008Crane Butcher McKinnon
2008Blessington Judd
2008Secombs
2008Quinn & Scattini
2009John Micallef & Co
2009Carter Capner
2009Long Howland
2010Trilby Misso
2010Kenyons
2010McGlades
2010Stewart & Nobles
2010Adam Leylands
2011Rob Powe
2011Keddies
2012Russell Jones & Walker
2012Conveyancing Works
2012Bussoletti Lawyers
2012David Nagle Lawyers
2013JSP Solicitor
2013Clark Toop & Taylors
2013Marrons
2013Fiocco’s Lawyers
2012Hilliard & Associates
2013Gibson & Gibson
2013Taylor Vinters
2013Fentons Solicitors
2013Goodmans Law
2013John Pickering
2013Chadwick Lawrence
2014Pannone Solicitors
![Page 62: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/62.jpg)
Slater & Gordon has grown at 32% CAGR from $45m to $418m and completed 38 acquisitions since listing
© 2014 Beaton Capital 622006
Maurice May & Co
2006Reid & Reid
2006Gary Robb & Assoc
2006Paul J Keady & Assoc
2008D’Arcys Solicitors
2008McClellands
2008Edwin Abdo & Assoc
2008Nagle & McGuire
2008Crane Butcher McKinnon
2008Blessington Judd
2008Secombs
2008Quinn & Scattini
2009John Micallef & Co
2009Carter Capner
2009Long Howland
2010Trilby Misso
2010Kenyons
2010McGlades
2010Stewart & Nobles
2010Adam Leylands
2011Rob Powe
2011Keddies
2012Russell Jones & Walker
2012Conveyancing Works
2012Bussoletti Lawyers
2012David Nagle Lawyers
2013JSP Solicitor
2013Clark Toop & Taylors
2013Marrons
2013Fiocco’s Lawyers
2012Hilliard & Associates
2013Gibson & Gibson
2013Taylor Vinters
2013Fentons Solicitors
2013Goodmans Law
2013John Pickering
2013Chadwick Lawrence
2014Pannone Solicitors
![Page 63: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/63.jpg)
Slater & Gordon has grown at 32% CAGR from $45m to $418m and completed 38 acquisitions since listing
© 2014 Beaton Capital 632006
Maurice May & Co
2006Reid & Reid
2006Gary Robb & Assoc
2006Paul J Keady & Assoc
2008D’Arcys Solicitors
2008McClellands
2008Edwin Abdo & Assoc
2008Nagle & McGuire
2008Crane Butcher McKinnon
2008Blessington Judd
2008Secombs
2008Quinn & Scattini
2009John Micallef & Co
2009Carter Capner
2009Long Howland
2010Trilby Misso
2010Kenyons
2010McGlades
2010Stewart & Nobles
2010Adam Leylands
2011Rob Powe
2011Keddies
2012Russell Jones & Walker
2012Conveyancing Works
2012Bussoletti Lawyers
2012David Nagle Lawyers
2013JSP Solicitor
2013Clark Toop & Taylors
2013Marrons
2013Fiocco’s Lawyers
2012Hilliard & Associates
2013Gibson & Gibson
2013Taylor Vinters
2013Fentons Solicitors
2013Goodmans Law
2013John Pickering
2013Chadwick Lawrence
2014Pannone Solicitors
![Page 64: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/64.jpg)
The outside investment
debate
![Page 65: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/65.jpg)
The debate
© 2014 Beaton Capital 65
Those in favour say…
1. Access to capital
– improves access to justice
– enables economies of scale
2. External investment stimulates innovation
3. Governance of firms is enhanced
4. Broader range of services, beyond the traditional, is better for meeting clients’ needs
5. Wider ownership attracts, retains and motivates the best people, irrespective of discipline
![Page 66: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/66.jpg)
The debate
Those against say…
1. Competing duties to the Court, clients and shareholders are irreconcilable
2. Ethical standards are diluted
3. The risk profile of firms is disproportionately increased
4. The profit motive is emphasised even more than it currently is
5. The standing of the profession is compromised
© 2014 Beaton Capital 66
Those in favour say…
1. Access to capital
– improves access to justice
– enables economies of scale
2. External investment stimulates innovation
3. Governance of firms is enhanced
4. Broader range of services, beyond the traditional, is better for meeting clients’ needs
5. Wider ownership attracts, retains and motivates the best people, irrespective of discipline
![Page 67: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/67.jpg)
Chicken Little is probably wrong
© 2014 Beaton Capital 67
![Page 68: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/68.jpg)
In times of turbulencethe biggest danger
is to act with yesterday’s logic.
Peter Drucker
![Page 69: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/69.jpg)
Options for traditional law firms
© 2014 Beaton Capital 69
1. Differentiate……Differentiate……Differentiate
– Reposition as specialists on work, client or sector logic
– Diversify into adjacent services
![Page 70: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/70.jpg)
Options for traditional law firms
© 2014 Beaton Capital 70
1. Differentiate……Differentiate……Differentiate
– Reposition as specialists on work, client or sector logic
– Diversify into adjacent services
2. Reduce the firms’ fixed costs substantially
![Page 71: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/71.jpg)
Options for traditional law firms
© 2014 Beaton Capital 71
1. Differentiate……Differentiate……Differentiate
– Reposition as specialists on work, client or sector logic
– Diversify into adjacent services
2. Reduce the firms’ fixed costs substantially
3. Re-engineer the firms’ business model
![Page 72: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/72.jpg)
Options for traditional law firms
© 2014 Beaton Capital 72
1. Differentiate……Differentiate……Differentiate
– Reposition as specialists on work, client or sector logic
– Diversify into adjacent services
2. Reduce the firms’ fixed costs substantially
3. Re-engineer the firms’ business model
4. Investigate consolidation
![Page 73: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/73.jpg)
Options for traditional law firms
© 2014 Beaton Capital 73
1. Differentiate……Differentiate……Differentiate
– Reposition as specialists on work, client or sector logic
– Diversify into adjacent services
2. Reduce the firms’ fixed costs substantially
3. Re-engineer the firms’ business model
4. Investigate consolidation
5. Beware the lateral bubble
Better, not bigger…
![Page 74: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/74.jpg)
BigLaw and NewLaw business models a continuum
© 2014 Beaton Capital 74
Top talent
Technical excellence
Lawyers selling & producing
Personal brands
Sustaining technology
Leverage full-time lawyers
Tournament for partnership
Few owners
Partnership
High hourly rates
BigLaw
![Page 75: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/75.jpg)
BigLaw and NewLaw business models a continuum
© 2014 Beaton Capital 75
Top talent
Technical excellence
Lawyers selling & producing
Personal brands
Sustaining technology
Leverage full-time lawyers
Tournament for partnership
Few owners
Partnership
High hourly rates
Requisite talent
Fit-for-purpose standards
Separate selling & production
Corporate brands
Disruptive technology
Flexi-work practices
No tournament
Corporate ownership
Non-lawyer shareholders
Fixed fees
BigLaw NewLaw
![Page 76: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/76.jpg)
BigLaw and NewLaw business models a continuum
© 2014 Beaton Capital 76
Top talent
Technical excellence
Lawyers selling & producing
Personal brands
Sustaining technology
Leverage full-time lawyers
Tournament for partnership
Few owners
Partnership
High hourly rates
Requisite talent
Fit-for-purpose standards
Separate selling & production
Corporate brands
Disruptive technology
Flexi-work practices
No tournament
Corporate ownership
Non-lawyer shareholders
Fixed fees
BigLaw NewLaw
![Page 77: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/77.jpg)
BigLaw and NewLaw business models a continuum
© 2014 Beaton Capital 77
Top talent
Technical excellence
Lawyers selling & producing
Personal brands
Sustaining technology
Leverage full-time lawyers
Tournament for partnership
Few owners
Partnership
High hourly rates
Requisite talent
Fit-for-purpose standards
Separate selling & production
Corporate brands
Disruptive technology
Flexi-work practices
No tournament
Corporate ownership
Non-lawyer shareholders
Fixed fees
BigLaw NewLaw
![Page 78: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/78.jpg)
We are just in the beginning of developing a 21st century answer to what it means to be a lawyer. Right now we have a 19th century answer and in many ways we do not want to throw the baby out
with the bath water.
David Wilkins, Harvard Law School
![Page 79: George Beaton: Outside Investment in Law Firms from ClioCloud9 Conference](https://reader033.fdocuments.net/reader033/viewer/2022051516/55a5184f1a28abdc7f8b4803/html5/thumbnails/79.jpg)
• Independent corporate advisory firm based in Australia and Hong Kong providing strategic and financial advice
• Specialised in advising professional service firms on:
+ Strategy
+ Mergers & acquisition
+ Owners’ exits and divestments
+ Balance sheet and capital optimisation
+ Governance
• Offices in Brisbane, Hong Kong, Melbourne and Sydney
• http://www.beatoncapital.com/
• Benchmarking, analytics and high-end market research house serving professional and financial services firms in the Asia-Pacific region
• Services include:
+ World-class benchmarks
+ Advanced analytics
+ Customised research
+ Evidence-based advice
• Pioneers of Beaton Benchmarks™ and the BRW Client Choice Awards
• Winner of Prime Minister’s Award for Business-Community Partnerships
• http://www.beatonglobal.com/