102 - The Power of Partnerships by Blending Rigour & Value-Based Behaviours

My guest today, is Paul Khan, Owner at Redholm Consulting, based in sunny Brisbane, Australia - a veteran and pioneer of support and advisory services to law firms. In his 40-year international career he has been a banker, statistician in pharmaceutical consultancy, a magic circle and big 4 growth specialist, and C Suite (including CEO) of a number of accounting and law firms in the UK and Oz.

Having developed the Owners Agenda a unique small firm diagnostic methodology he now consults to law and accounting firms and SMEs. His application of scientific method, a cut through style coupled with sheer longevity in the business makes him an interesting guest, while being a little different to many we talk to on this podcast. Paul is an approved Queensland government business mentor and public speaker.

In this episode we cover how to yield the power of partnerships by blending rigour & value-based behaviours

As Paul says. “There are many small to medium law firms whose owners are literally trying to ‘decorate their house through the letterbox’ focusing on the wrong portals to effect real change”

Useful links :
https://pauljkhan.com
www.linkedin.com/in/pauljkhan

Proudly edited with finesse by Mike at Making Digital Real ✨

Transcript

Welcome to the Law Firm Owners Podcast. I am your host, Dan Warburton. If you are a law firm equity member, partner, CEO or MD who wants to increase your profit while reducing your workload, then you are in the right place.

It's the skills that I needed to become a leader. Yeah. I'm so happy that I've met you in my life.

You've spoken about the revenue increase. It went from like 70,000 to nearly half a million. What percentage increase is that? It's over 400% in that range.

Our monetary returns have been insane. And what we have made in extra profit as compared to what we spent on you is incomparable. You've just trebled the firm's profits in one year.

Yeah. Are you getting what I'm saying? After working with Dan for a few months, my income is up, my happiness is up. This has changed my whole life.

Welcome to the Law Firm Owners Podcast. I'm your host, Dan Warburton. And here I have an absolutely fascinating individual.

His name is Paul Khan. He is the principal owner of Redholm Consulting, offering professional services advisory and professional services veteran. So he's the owner of Redholm Consulting based in sunny Brisbane, Australia.

He's a veteran and pioneer of support and advisory services to law firms. In his 40 years international career, he has been a banker, a statistician in pharmaceutical consultancy, a Magic Circle and Big Four growth specialist and C-suite, including CEO, of a number of accounting and law firms in the UK and Oz. So we have a real giant with us here.

And he's also developed the Owner's Agenda, which is a unique small firm diagnostic methodology and that he now consults a law firm and accounting firms. So really great to have you here, Paul. Thank you, Dan.

And I'm just wondering, that's one huge journey. How did it begin? How did you get into practicing law? And obviously, that's quite a few years ago. Oh, yeah.

Well, you don't have to be so hard on me. But, you know, a veteran is a veteran, isn't it? You know, I mean, I graduated in 1984. You know, banking, and it's ironic.

You know, most people make their money as they go through their careers. Ironically, I seem to make my money at the beginning when I was in the city in the big bank when it was all crazy. I was based in Oslo for a few years doing pharmaceutical consultancy because I had a sort of mathematical background.

And then I'd like to tell you I had a planned career, but I was sitting at a pub in Chancery Lane and I met a guy who said, you know what? He says, you can sell and you can deal with lawyers and you've got a sort of ability to falsify inductive logic. I can go into that if you want to. You should work with lawyers.

Anyway, so the next thing, I went to Clifford Chance when they were based in a museum in London. And there you are, as one of their first ever heads of business development in their corporate practice when the average tenure of a sort of BD guy was about six minutes, you know? They spat them out. So that's when it all started, yeah.

You know, so as I say, I was a pioneer to some extent, to be fair. Yeah. Amazing, amazing.

And, you know, you've got such a fascinating journey. I mean, there's so much that we could speak about. And one of the things that we were looking at was how to blend the true power of partnership with rigor and value-based behaviors.

So we kind of come up with that title to this together. What was it that inspired you to come up with that title? And there's a couple of things going on, Dan. The one thing is the fundamental changes in people, be that right or be that wrong.

The way that people interact with their employer, their expectations to be a lawyer, you know, the training of a lawyer. And most importantly, I suppose, the fact that there were so many owners of law firms out there, in my opinion, who compromised all the time. You yourself have said quite clearly for a long time that, you know, the power of partnership is about, you know, delegation, using your time properly.

And if you look going way back, you know, people like Maester, I mean, you know, he's a bit of a bore these days. But you know what? The fundamental drivers of profitability only work when the culture works. So when I talk about, you know, the sort of rigor, yeah, if you work for the big bore, if you work for Lynx and Clifford Chance and others, I was in Bellgalley as one in New Zealand.

You look at those firms, why would you ever compromise on quality? You don't. But if you're then going to, you know, take your skills to the mid-tier, you realize that there's a sort of, there's a tension, you know, trying to apply that level of quality for boutique firms that I work with, you know, you want to be the absolute best. And at the same time, dealing with the changes that have gone on in society, especially post-COVID, you know, you end up in a situation where people are compromising all the time on their values.

They're allowing the worst sort of behaviors in some of the firms. And they think that because they have a headcount plan, that they have to make these compromises. When you say compromises, what do you mean? Well, what I mean is, you know, if you think about, well, actually, I'll give you a practical example.

Sadly, it's through an accounting firm. He eats better, but great, yes. So one of my clients, it's a firm, sort of multi-site firm.

And I always called him because they had a toxic couple of personalities. And they were so desperate to fill their numbers and they were so desperate to service their clients that, you know what happened? They brought them in. They knew it was wrong, but they thought it would work.

And the sort of ripple effect of these two toxic characters was so bad that effectively it was starting to sort of shut down the firm in terms of the way it worked. And, you know, and then you think about, so why did you take them on? Well, you know what? Because we thought they lived our values. Well, no, we thought they did.

They ticked a box. They went to an interview. They told you they were nice people.

But until you actually put in a protocol or a framework that not only just values fee ownership or hitting your budgets or hitting your targets, that actually those values turn into behaviours that are authentic for your culture, you'll end up with compromises like this all the time. And that compromise was a two to two and a half year programme of having to change the culture. So that was basically because the firm didn't have a culture of valuing rigour to begin with.

And then they went and admired with that missing. That's right. You have to be authentic to who you are, you know, and, you know, empathetic leadership, servant leadership, all the stuff we talk about today.

It's fine. The simple fact is if you are a hard-nosed law firm looking to make lots of money and you want people to work really hard and you'll reward them accordingly, say so. Now, when I was at Clifford Chance, I found that my boss at the time, and, you know, shout out to Kevin Geary if he's still with us, he was an ex-Coopers strategy partner when Coopers used to be Coopers and Iber.

And he said to me something that stayed with me all my career, which is number one, if you are ever compromised on quality, you'll be a second-rate firm. So you always wish for quality, yeah? The boutiques I work with have got that tier one standard scaled down to their, you know, to their size. The other thing he said to me was, you know what? If I have to work weekends and I have to work bank holidays because I can't find the right people, so be it.

Because what I won't do, I will not compromise my brand because my brand is going to cost me so much money, so much time, so much angst if I get it wrong. So he'd rather, you know, hold out to the right people, even if it means, to some extent, making a bit less money because there's nothing more destructive than where we seem to be today where, you know, it's all about, you know, it's almost the reverse of what JFK said, isn't it? It's, you know, tell me what your country can do for you, not what you can do for your country. Everyone comes in and tells me, you know, what can the law firm do for me? And that pendulum swung so much.

And, you know, we need to sort of swing it back and it's a sort of win-win situation. And the third thing he said to me was, when you, and again, so I'm not trying to say this is my own philosophy, I've just adapted it. He said, you know, if you've got £100 to spend and you've got two people in your headcount, get one person and pay them £75.

Because what you'll find in professional services where change is hard is that you get people who are absolutely the best you can afford would always be the people to deliver. So when you've got that sort of rigor of culture and rigor of being authentic to the culture that you have, if you then start taking on people and compromising, no matter how hard the market is, it's destructive. And that's really what I've been doing over the last few years.

Yeah, great. So what I'm hearing from this is don't try and hire on the cheap. Hire properly, pay decent people their worth, and in the end, you're going to succeed so much better and longer.

And to some extent, that's the sort of high-performance culture thing. And whereupon I talk about a high-performing culture, not a high-performance culture. Because if you look at smaller law firms, et cetera, this sort of PwC, Big Ball, sort of Magic Circle approach, you're only as good as your last sale.

Every year, 5% of people have to go because we raised the bar, we raised the bar. But a high-performing culture are people who join because it's the right place for them to be. And I judge a good culture in the smaller law firms I work with, Queenstown and quite a few in Australia as well, a couple in the UK.

I judge their success by the limited size of their HR manual. And by that I mean not because they don't have to tick all the compliance boxes that we all do, and it never ends, right? But if you have to put in more rules and more regulations, it shows that people haven't got each other's backs. So what we focus on is putting into effect values frameworks that actually reward the appropriate behaviours.

So in simple terms, what we've been doing is saying to people, I don't care if you're the biggest rainmaker we've ever had, you're not going to get your full bonus if you act like a bit of a dick, you know? Sorry, that's my Aussie coming out there. And so, you know, and this all started when I was in the States because I don't know how long you've been around, Dan, but values sort of came shooting out in the 90s. McKinsey started it and Boston Consulting, you know, values, values, values, I get it.

But what they never discussed was behaviour. And they never had a carrot and stick, you know, type of approach to, should I do the right thing? What does the right thing look like? How am I going to be judged on doing the right thing? And how do, you know, all of those values that I love talking to people about, how do they ever, ever, ever end up actually adding to the bottom line? Because we measure and we record and we value the behaviours. Yeah, well said.

I had one of my clients was doing a lot of the billable work and, you know, he was a law firm partner, only a two person firm, but he was exhausted doing all the billable work. And what we discovered was that he wasn't making clear requests of his team members and wasn't agreeing deadlines because he didn't want to micromanage. Now, why was he avoiding that? Because he wanted to make sure the firm had a good culture.

But through trying to maintain this good culture, he took on all the weight onto his own shoulders, making sure he didn't stress anybody out. And it meant that he greatly limited the performance of his entire firm. And I think that happens all the time.

I mean, but, you know, when we have sort of hostages to our own organisation, you've got to worry where our business is going. I worked in, when I was in pharmaceuticals, I was sent out to New Jersey. I won't talk about the firm.

It's a massive pharmaceutical firm and I met the COO. And Values had just been introduced to this organisation at the time. The guy was ex-Marines.

He was a colonel in the US Marine Corps and he was a COO. And he used to walk around and he used to say to people, give me the values. And people would go, what, what? And if they didn't give the values, he'd make them do 10 press-ups.

You know, give me the values, get down on the floor, you know? And they never forgot them. And they had them on their desk, whatever. They had no idea what they meant.

And, you know, I'm fed up of reading websites talking about values and the rest of it. It's like, when you come to my firm, this is what I stand for, you know? It may not be work-life balance. It may be something else.

It may be work-life balance. But the point is, this is who we are. This is how we operate.

This is our proposition to people who work. And it won't be... How do you get people across a firm to embody values then? I think you have to do it, well, A, we talked about the recruitment side. Absolutely.

But if you're walking in and trying to say, well, firstly, I think you need to assess whether those values that you already have are the right ones to be fed. You know? And a lot of them don't really embody them. I mean, you know, a high-performing culture, as far as I'm concerned, should always have things like, you know, an obsession with clients.

I speak to so many people that never talk about clients anymore. And like, why are you here? You know, we're all in this for our clients, right? Yeah. I hope, yeah? And so I think a framework review of the values, involving the staff in that as well, and then getting them to work out what type of behaviours around the business would actually exhibit those values in terms of client delivery and also in terms of internal sort of glue and culture, yeah? So what they're talking about is actually leading conversations to have the employees and the team members come up with the values themselves.

Hey, we've all been in partnerships. I mean, you know, there's a thing called steering the conversation, right? Yeah, yeah. I think what we tend to do is to try and get the partnership itself to come out with what real values they mean.

And I'm quite hard on partnerships on this. It's like, don't give me a list of stuff. You know, this is the way you behave.

This is the way you behave. This is what you do. Let's get some values together that actually mean and exhibit what you actually are.

Yeah. Not some sort of motherhood statements, you know? Yeah, the reason why I say that is because I find that when you tell people what to do, they're a lot less likely to follow it. Whereas if you guide them in a skilled coaching style dialogue to create something for themselves and feel like they're part of creating it, they're much more likely to embody it.

I think that's absolutely right. I mean, going right back to putting change into the firms, you know, 20, 30 years ago, you know, the idea that, you know, a partnership is about permission as far as I'm concerned, you know? The more permissions you get from the partners as an employed member of staff, the further you can go. But why not sort of accelerate that whole permission structure by having a values set and a framework that not only actually monitors the behaviors, but at the same time rewards them? Yeah.

So what we try to do is to say, look, if, you know, if you are a person committed to your fund, if you're a person who goes the extra mile, if you put the firm first occasionally, if you look after your fellow people, there's money in it for you. You know? And so I get a lot of the Gen Z, you know, I do a fair amount of interviewing on, I do second interviews occasionally on, you know, on behalf of clients. And part of the, you know, the Gen Z reality of course is, you know, that they want to know about the values, they want to know what your business is about, they want to know that they're aligned to something that they can believe in.

And the flip side of that is just saying, yes, yes, yes, the flip side is saying, well, actually these are the values we have. And if you believe in those, then you'll do the right thing anyway. And if you do the right thing anyway, guess what happens? There's money behind it.

So, you know, we have a rewards framework that, you know, hit your targets, do various other things, but mainly and most importantly, your corporate citizenship based on our own values and our behaviors has to be part of it. And we found that's worked really well. So talking about remuneration and incentives, there's the classic take that if you give billers a percentage of what they bill, then they start ignoring the rest of the team.

They think of themselves and they just look at racking up lots of hours of billing. Then there's the other take, which is, well, if you give a flat bonus that you share across the entire firm, then even those that slack will get the bonus. What kind of remuneration and checklists do you find is good to run people through to make sure that they get that bonus? There's sort of two answers to it.

I think it depends on the type of culture that the partnership or the ownership is trying to create. If it's one of those, you know, high-performing, fee-based, we need to sell type of cultures and that's all it stands for, then it's probably on a sticky wicket. Then the other one is those organizations that are plodding away.

But as far as I'm concerned, the ones, and I'm very selective, so I only work these days with this sort of boutique organizations where they got it right or they want to get it right. There's a lot of mediocre firms out there. But for me, I think the question is, how do we put something together for you as an individual that aligns to what we're trying to achieve in a win-win situation? So what we've done, we've tried to say, look, there's a massive package for you.

There's rewards for hitting your budget. There's also rewards and small financial kickers for hitting your quarterly targets so you smooth the way that you run your fee. So that's on a personal individual basis? Yeah, on a personal individual basis.

Instead of saying everyone gets a three-times multiple. Yeah. We've tried to say to people, you know what? This might be the multiple, you know, that works for you.

I know people talk about their salaries these days, but some of the cultures that we've been creating are ones where we actually have that open conversation in a massive room. We say, look, you've all come on a different journey. You, you know, you came over from country X. You were earning Y. This guy's come over here.

He's come from the States. He was earning five times as much as you. Let's bring that all together.

If you want to talk about your salaries, let's talk about, yeah, and opening people's eyes. But I think more is that a balanced scorecard that basically goes to stakeholders, goes to clients, and has, you know, client service, client obsession, client delivery as part of those behaviors and observed behaviors means that you can actually reward that financially. Yeah.

And finally, I think in a world, certainly in Australia, I know things at home in the UK are pretty similar. I mean, we're dealing with young people at the moment who struggle to get a, you know, a deposit to get for a house, you know? Oh, yeah. So we're also saying, look, you know, let's take something from the investment bankers.

Let's put retention bonuses. Let's, you know, we want you to stay. You guys seem to want to be off next week.

Well, we're going to try and get the right hire. But if we get the right hire, one of our incentives is, you know, in three years' time, there's going to be a cash pile for you if you stay with us and you hit your number. Yeah.

So we've tried to put this into a sort of, you know, five, what I call it, like five ways to earn in our firm, as opposed to here's your budget, et cetera. And on top of that, there's a discretionary bonus. And most importantly for me as well is a bonus for the support staff and the practice support group as well.

So that they have to exhibit the right behaviours. And they have to be just as obsessed with their own clients, i.e. the partners, the lawyers, as the lawyers, the partners are with their own clients. Yeah, got it.

So what I'm hearing you've found has worked isn't just one bonus. It's actually three, four, five different bonuses applied to each. So one might be where the clients that they work with get called on a quarterly basis to check, did you feel like you were listened to? Did you feel like your work was delivered on time? And they heard, right, great.

So they pass that one. So then they get that bonus. Then it's look at their billing targets.

Did they hit their billing targets consistently? Great, that's that bonus. And then if they've met those two, then they might get a firm wide bonus that everybody else gets as well. Yep, absolutely.

And why shouldn't you? I mean, you know, at the end of the day, you know, one of the things that our boss of mine said, which I've stayed for a long time, one of the partners I work with here in Brisbane, said that, you know, we do not work in the business. This isn't the Hunger Games, you know. There is success for everybody and there's enough for it to go around.

So, you know, don't feel by, you know, hoarding the work or anything that you're doing you're not going to pay that. Success is that. And again, that's a value, you know.

Success is to be shared. Success is not, you know, I'm not looking over my shoulder at that other guy's fees. Maybe that's the wrong sort of firm, you know.

But the sort of firms that I want to work with, that I get involved with, we sort of spread that stuff out. We've got people who just want to really, really do well and serve their clients. And if you do those things and you're a good lawyer and you've got the right attitude, guess what? The financial rewards follow you.

Yeah, absolutely. They follow you. With one of my clients, she was just starting off on offering bonuses, which was whenever anybody hit their hundred hour billing target per month, anything above that, they got 30% of whatever they billed extra.

Sort of threshold budget, yeah? That's it. But the problem was, was that we could see that eventually that would lead to people not operating as a team. So what we're doing is we're moving that to an overall bonus where everybody gets 15% of the entire firm's monthly profit divided between everyone.

But to warrant that, they need to hit their 100 hours each billing targets so then that ensures they get that work done. But also they need to meet a checklist of values. Are they turning up on time? Are they leaving their team members feeling valued? Are they, you know... All those behaviours really, isn't it? Are they living the behaviours? And if they are, then they can benefit from the bonus.

Yeah. I did some work about 10, 12 years ago for LexisNexis. And we're in their sales function in Australia.

And there's a lot of sales sort of reward processes. And some of them have these gateways, you know? So you go through gate one, if you achieve X, then you can go through gate two. It's not squid game.

It's like different. It's this, not bubble. Go through gate one, get a reward.

Don't go through gate one. You can't get any other reward. Yeah.

And it's harsh, right? But some of that actually resonated with me and I sort of switched it around, which is if you want some bonus in this firm, I don't care if you hit your numbers. If your behaviours are wrong and not aligned and the clients don't like you, all bonuses are off the table. Yeah.

So you do the right thing. Yeah. That's what I've seen is vital to include to ensure good team and teamwork.

But also on the other side, isn't that not everybody is motivated by money and a bonus? No, they're not. And I think that, I think certainly these days, I mean, you know, again, I keep talking about the old days, you know? You segment your client base, don't you? Your marketer. You segment your staff.

You know, you've got, I worked for Moore Stevens, my first ever GM role in Victoria. They're Moore these days. And one of the things that really impressed me, we had a director there who never wanted to be a partner, but he was brilliant.

He was the workhorse of the firm. I mean, frankly, you know, he had the money at him. And I think that, you know, but he never wanted to take that risk.

He never wanted to move to that next level. And I think, you know, he was a classic example. The money just followed him.

All he wanted to do was serve his clients, you know? And you're right. And again, the generational challenges we face, rightly or wrongly, is that they are often motivated by different things. Yeah.

And one of the things I'm taking most of my clients through is first set up a one-on-one call with each head of department. And then in that session, ask them, why are you at this firm? Why do you keep showing up each day? You know, if anything could become possible through you being in this firm, what would you love that to be? And I've had all sorts of stories from one guy wanted a month off in the summer to travel around India. Another one wanted to take up singing lessons, but needed Friday mornings off to do that.

And then other surprise people did actually want to become partners and become, you know, and get pay rises. But the firm owner didn't know that because he'd never stopped to listen or really get into their world and understand them. But then once he knew that, then they can set up structures on a week by week basis to mentor them to succeed at both everything that happens through them hitting their targets and everything that matters to them in their lives.

And this sort of goes back then to some of your posts, et cetera. I mean, you know, at the end of the day, it has to start at the top, doesn't it? You know, sit around that table and, you know, what the hell are you people in business for? You know, all of you, do you actually like each other? Are you happy to spend 20 years together? What really pisses you off about that guy over there? Let's get it all on the tape, right? And then let's tear it apart, let's deconstruct it, and then let's rebuild it again. And let's see exactly what the real values are.

Yeah, and I think you're speaking about here is what most law firm owners avoid doing, which is speaking openly. You're right. And, you know, you've been making this point for a long while.

I mean, my view is that there's ways and means, isn't there, of having those conversations. Yeah. One of the things that I do a lot is, I did it with a very, very successful firm on the Gold Coast.

I give every partner just a simple analysis using my sort of owner's agenda thing. I give them a simple questionnaire, and I get them to all sit down. Then I present the gap analysis in everything from, you know, retirement time, remuneration desires, time off, all the sort of stuff that you've structured.

So I put it into a mathematical model. And then we go back to the owners and we say, well, some have gone back and said, so it's a correlation thing. So you can put a number on it.

You can say, right, there's 10 partners. The correlation between all of you is 0.2. Ouch. Or you can go back and you say the correlation between you is about 0.8. Brilliant.

But the point is, that creates a conversation. From that conversation, we change the business. So, you know, we're both doing the same things with potentially a different methodology.

But unless you have those conversations, and also the other thing is, why the hell are a lot of these people doing it? You may not know Queensland that well. I don't know if you've ever been to Australia. No, I've never been to Australia.

No, no. So in Queensland, I mean, Queensland is pretty much the size of Western Europe, almost. It's so huge.

Crazy. You know, yeah, it's big. I may be exaggerating, but it's bloody big.

If I want to get to Cairns, it's nearly three hours on a plane from here in the same state. But what that has done over the years, and the Queensland Law Society will tell you this, is that there are hundreds and hundreds, if not thousands, of sole trading lawyers. Wow.

You know, on every high street, you know, trying to eke out a living. Some are good, some are less good. But one of the things that sort of taught us is that we sit down with partnerships every year, and we do the sole trader test.

And we sit them down, and we go, guys, it's that time again, right? If you were sitting in the high street with one secretary, and you were just selling your time 40 weeks a year, went home, ate your dinner, and looked after your family without any stress at all, what is the premium you're actually getting by managing all this bloody infrastructure, having all this hassle, and the rest of it? And, you know, how much have you earned in PEP this year? How much would you have earned as a sole trader? And sometimes the differential is minimal. Right. And that's the, like, well, hang on, I can just be down the high road.

They forget. You know, you get all had up about titles and infrastructure and strategy meetings and BD plans. But the simple fact is, if you look at what you're doing and add it all up, you ain't making no money.

And, you know, so there's a sort of, you know, there's a diminishing return in terms of, you know, when does the hassle I face in doing this job actually stop being interesting because I'm not getting the rewards? So we try to map that out, and get people to have that moment and go, oh, maybe we should double our, you know, our earnings, or maybe we should do something else. And it's that sort of light bulb moments that make difference. Which all come out of, first, from the top, getting them clear about why are you here? What do you want to succeed at? What is it you hate about this? Yeah.

And is what you're doing worth the reward you're getting? I think so. And, you know, and also the assumption that you can't do it yourselves. I mean, you know, when I came back from UK, I spent a lot of time reflecting on the role of CEO or COO in law firms or GM.

And I've taken interim positions, but most of the time these days I've turned around and basically made these roles redundant. Because I'm getting to the point now, frankly, you're lawyers, you're brainy people, you should have a decent practice manager, sure. But the idea that you can't involve people like you or people like me to set strategy, instead of paying us, you know, thousands of pounds a year, you know, the sort of, you know, the incremental interim type of approach for these smaller firms makes a lot of sense, you know.

And also as they change, they tend to get stuck in this idea that you can bring in some super person, you know, Superman, Superwoman, who can suddenly, you know, do everything. You know, oh, hello, I want you to be my general manager. You know, we've got eight partners and we're really growing well.

What would you like me to do? I want you to be an expert in sales, marketing, tech, et cetera, et cetera, et cetera. And I also want you to be able to set strategy. I want you to be able to influence us as partners and I'll pay you a hundred thousand pounds.

And it's like, that's crazy. You know, you know, I want you to be, I want you to be a sort of like a godlike COO, but you know, I won't even give you a profit share. And if you think about it, the whole structure is just madness.

You know, that's my view. I mean, there's some brilliant people, don't get me wrong, who are doing COO roles in law. Actually brilliant people.

But if I were to start a firm today and some of the firms I'm working with are just really on that fast growth track, we're avoiding it. We're using, you know, we're using the outsourcing. We're using the skills that are out there and we're selling tenure to people on the support side.

We're not selling careers. We're basically saying, you know, to get from A to B, there's a project. Would you like to help us for two years? I'd love to.

They're great. They know where they stand and it just works. Well, interesting.

So avoiding employing as such and subcontracting for long lengths of time. Subcontracting, but employing on very clear guide rails and clear contracts. Yeah, I mean, when the work is there and there's plenty coming in, then it's better to have reliable team members that really aren't going anywhere.

It's much more suitable to have them employed, right? Yeah, and well, that's the way of the world. I mean, I know, you know, I'm not going to make a political point. The economy is something that, you know, is contentious.

We're not saying don't reward people. But if you think about the most, to me, the most effective people are those consultants who come in who are, I'm quite driven, who are like me. They come in, give me a job, we'll change your business.

But then we're done. And the other thing is, you know, a lot of fast growth law firms, as far as I'm concerned, you know, they're growing, they're growing, they're growing, but then they hit a point where, you know, growth is harder. And they've had some, you know, dynamic COO or dynamic GM or CEO come in and help them.

But then they hit consolidation. And they actually, what they've left with is a change manager. So, you know, you've got to have what you need at the time.

And ultimately, it's all about what the partners need. It's not about providing careers for support staff. You do what you can.

And of course, there are careers, but generally, I think it's a 10-year situation. That's really the reality of the partnership model, given that the partners themselves are the long-term, you know, the long-term players in that particular firm. Yeah, brilliant.

Absolutely fantastic. I have gained some very useful insights from speaking to you today. One final bit of advice.

What would you say to a law firm owner or partner who is just exhausted and overwhelmed, trying to do all their client work and can't really see a way out? Wow. I could answer that a million ways, depending on the science or whatever. I think you have to take stock.

You know, it's a trite question in a way, and I'll answer it the best way I can. Look, you've got to take stock. You've got to look as to why you're doing it.

And are your clients being serviced? And if they're being serviced because you're doing all the work and you have an infrastructure behind you to do that, then you have a problem. And you need to think about what that problem is. If you're servicing them and you haven't leveraged, you know, go back to basics.

Look at David Mason's original equation, you know. You can't raise your prices all the time. People are not working as hard as they used to, who you employ.

The only thing you've got to play with is gearing and leverage. And if you can play with leverage, use your people properly or gear up, because obviously you're in a situation where you don't need to be doing all this and you can get cheaper people to do it. And then finally I'd say relax, relax, right? One of the things I've learned over 40 years is the world doesn't end, right? This is all easy stuff.

If you just calm down and not take it all too seriously, there's far too much emotional stuff going on in some of these films. Well, yeah, but at the same time, I know that many of my clients, they thought, well, how am I going to delegate away the work that I've always done for my clients over many years? How can I palm the work off to somebody else and not lose them as a client? Well, I mean, the rudiments of key account management to some extent, isn't it? Why do people use smaller firms or boutiques? Because they get access to the part, right? That's one of the first things that comes out of surveys, isn't it? Why do you use Firmex? It's a boutique, it's a medium, because the partners have got access to them, sure. But it's also about educating your clients, isn't it? End of the day, you know, why? If you want me to do your, you know, if you want me to do every bit of work for you, it's going to cost you 700 pounds an hour.

If you would rather I use my team to help you, this is why it costs. There is a lack of education of clients as well. And there's also an ego thing that says, at the end of the day, I'm the only person who can actually give advice or actually engage.

And if you think about it, it's what you used to call, we have like a bowtie model in the smaller firms, right? Like you've got all this infrastructure behind the two sides, you know, of the relationship, but they only come in the middle here, like a bowtie. So it's their person and our person doing this. Well, actually, you need to switch the bowtie around the other way.

The partners and the relationship managers on the other side should be using all of their teams to interact the other way around. And once you get to that, I think it's an education piece and partners are a lot easier about this. There's also a trust issue as well.

Wow, yeah. I know that me and you could talk till the cows come home. Paul, it's been absolutely brilliant to host you on this show.

And I'll be putting a link to your website below. And if you're a law firm owner or partner or of any sector and think that a conversation with Paul would be useful, then I guarantee you it will be useful, reach out to him. Well, thank you, Dan.

And I do a lot of work with SMEs as well. And I'm over in the UK for 4th of Feb till about the 24th. So if anyone wants to reach out, I'm more than happy to chat.

Great. Paul, thanks so much. Cheers.

Thanks for having me, Dan. Thank you for listening to the Law Firm Owners Podcast with me, your host, Dan Warburton. If you found this useful, then join my Law Firm Owners Club, which already has over 850 members.

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