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How The Model Works for Law Firms
The Lawyers Inc. plan enables the fee earning team which currently exists in your firm to remain together while re-structuring. The model helps your team to expand and become more profitable, while preserving your Firm’s name and reputation. Each firm re-structures as a ‘pod’ under the Lawyers Inc. umbrella. By joining Lawyers Inc. you and your current equity partners will share up to 80% of your future billing. In return, we provide all the back-up services and support for you to seamlessly continue to trade without all the burdens associated with running a law firm. This frees up your time to concentrate solely on the servicing of your clients’ needs and expanding the client base.
The model’s flexibility encourages each pod to independently pursue a sustained program of growth, the pace of which, is determined by the members of the pod.
The above diagram and following scenario should help you to easily follow how this works in practice:
Let’s suppose, AB and C are the Equity Partners of A,B,C and C., and employ the assistant solicitors D,E,F,G,H. The Equity Partners decide to join Lawyers Inc.
The Equity Partners, ABC, (we call ‘Consultants’) each set up a limited company which must be 100% owned by them. Each company will execute two Contracts:
The first Contracts are separate and identical Consultancy Agreements between Lawyers Inc. and new Co. A, new Co. B and new Co. C respectively entitling them to receive up to 80% of the gross fee billing of their legal team (which we call a pod) in the future, subject to the deductions set out below. ‘The pod is the new entity which links all the former fee earners of the old firm.’
The second Contract, we call an Internal Agreement (IA), is an Agreement between the new companies A, B and C detailing how the gross fee income proceeds are to be divided between them.
The former non-equity fee earners, in this case, D, E, F, G and H sign fresh contracts of employment with Lawyers Inc. and continue to work with A, B and C. Lawyers Inc. will charge back to new companies A, B and C the salaries of those employees. The only other expenses which A, B and C may incur include:
- the rent of any offices where required
- expenses including a laptop, digital dictation machine, practising certificate, scanner/printer and mobile phone (total average approximately £1,000 pa per lawyer).
A Consultant may request Lawyers Inc. to retain the service of non-fee earning support staff such as a favourite PA or receptionist but that would be re-charged.
Lawyers Inc. provides everything else you need to practise including:
- Triple A rated Professional Indemnity Insurance
- Online precedents and legal database
- Cyber compliant IT systems
- Accountancy services
- File management systems
- Secretarial support
- Reception support
- COLP/COFA Management
- PR, marketing services and virtual media support
- Invoicing and credit control
- Personal Support Lawyers
- Bespoke Website
Prior to the commencement date, all lawyers receive full training to use all the administrative, secretarial and IT back-up provided by Lawyers Inc. This ensures each lawyer is comfortable with any new software in their relevant discipline.
Following execution of the contracts, ABC and Co. will reconstruct, triggering run-off cover. Thereafter, the new Pod, ABC and Co. part of Lawyers Inc. will seamlessly continue to practise under the auspices of Lawyers Inc. (the commencement date). In effect, the firm has successfully re-structured, becoming a new Pod.
From the commencement date, all billing will automatically follow the procedures set out by Lawyers Inc.
It is important to note that all the Consultants are paid monthly based on client bills paid. Lawyers Inc. will continue to pay your previous associate fee earners on the same basis as before. These will be then charged back on your monthly statements.