the uk employment law market
TRANSCRIPT
in the UK Employment Law Market
© RBP Ltd 2015
Competitive Dynamics 1995-2020
Employment
Law &Employee Relations
Employment Law is a core competency for commercial law firms.
Over 2000 solicitors work in 120 law firms for whom this is a core activity.
Solicitors also run, fund and work in most of the 170 regulatory consultancies here too.
Global law firms have moved on.
The High Street clients prefers consultancies.
But the biggest employment law team is no longer a law firm.
9 of the top 20 biggest firms – are not law firms.
The fight back is happening: here’s how.
A Real First: The facts
on all suppliers of employment law
services for business:
Who’s WhoHow Much?
and Who Cares?
Employment
Law &Employee Relations
It’s Not a Matter of Life or Death
‘It’s MuchMore Important than that…’
ContentsEmployment
Law &Employee Relations
Executive Summary: the worry list 3 If these keep me up at night – I’m doing something right…Market definition 4 How big is this market and who’s got the real clout?Competitive dynamics 5 What do winners (and losers) look like?Macro Economics: Here’s the Thing 7 Who can invest more, better, quicker? Us or them?What clients won’t outsource 8 What are the issues we most need to reassure clients on?What clients will outsource 9 How can we help clients get on with what matters to them?Competitive Axes: advice 10 What do clients mean when they say they want advice?
proof 12 How do you get all the client’s ducks in a row?reputation 14 When do you fight, and when avoid them altogether?capacity 16 Why do some clients want a lot, and some a little?effectiveness 17 How important is IT integration in client service delivery?
Top employment law firms 18 Which of the big law brands are investing here and how?Top employment law firm strategies 19 Which strategies are currently preferred for growth?Employment law firm targeted clienteles 20 How do law firms perform for different sizes of client?Top employment law firms: major client focused 21 Which firms are focused mostly on the bigger clients?
LMEs 22 Which firms focus on the mid-market?Law firms doing only employment law 23 Which firms now do only employment law?Law firm HR branded packages 24 Which firms have already launched branded HR packages?Versioning law firm HR service development 25 What’s new in content marketing and HR service delivery?Law firm and consulting software support 26 How does BPM, CLM and other software work best here?Market segmentation by value (pa) 27 Which types of supplier do different sizes of clients prefer?Law firm market segmentation by value 28 Where are law firm services most effective?Consulting long term market growth & 2020 projection 29 How will the consultancy market sector grow to 2020?Consulting models by volume and value 31 Which key competency works best for the consultancies?Versioning consultancy business models 32 What’s next for the most successful business model?Law firm/consulting business model comparison 33 How come smaller consultancies out spend big law firms?Market Entry: time, cost & M&A 34 If you don’t buy a firm here, what does it cost to build one?Key Suppliers 35-49 Which firms are growing market share over the long term?The NED Shortlist Brand (hyperlink) Collage 50 Where can I click through to see the suppliers web site?
Want Clients To Believe It’s Like This?
Executive summary (the worry list)Employment
Law &Employee Relations
UK business is now as likely to use ...
Macro trends from legal services regulators are in play, but …
In broad terms, for high risk litigation ...
There is no killer application, but …
It is no longer as simple as law firms ...
GCs and HRDs are complex ...
This is a uniquely complex market in IT terms. ...
Global and magic circle law firms are playing a different game ...
Pure HR consultancies are the ...
The most vibrant and contested sector of the market is employee relations for ...
Business models matter: ...
Firms like Irwin Mitchell and ...
Law firm partners are more likely to ...
The mix of services which clients will and will not outsource is ...
A supplier being good at, eg call centres is not inherently ...
Some law firms are already investing version 5 of law firm service …
Most suppliers get much more right than wrong, although ...
Drill and holes: clients want …
Lawyers rarely see the regulatory market below SOX or ...
A rise in law firms specialising in ...
It is enough? Is it in time? Can it make enough of a difference?
What’s working? What’s needed?You decide.
When all too often clients see it like this?
Market definitionEmployment
Law &Employee Relations
OptionsWhen a UK business needs help with employment law, they now have a bewildering range of options:- Get the Personnel/HR/Human Capital/Talent team to tool up;- Get the lawyers on a retainer or a panel to mind your back;- Get the in-house legal team to free-up/back-up HR on contracts and contentious business;- Insure against it going pear-shaped with legal expenses insurance;- Put the systems in place to ensure you manage ‘it’, not ‘it’ managing you…The old stalwart of ignore-it-and-hope-it-will-go-away is simply no longer viable – certainly not for any business with scale orambition. There are enough unions, insurers, no-win-no-fee lawyers, McKenzie friends, paralegals and others to help even the most indigent ex-employee ‘go to law’ – let alone a raft of free guidance from HMG.
In broad terms employers have a choice of two types of supplier – lawyers and consultants. There are different types and sub-divisions within these two broad categories as well, but fundamentally enterprises either tool up with ‘fighters’ or ‘fixers’.
The solution types range from publications, training, and insurance to advice lines, case or project support and several different types of outsourcing. There are distinct differences in preferred solution format according to the size of firms facing the problem. There also is a surprising similarity of procurement requirement across all businesses from owner managers to global GCs. There is no market substitution between the compensation and benefits expertise of the global lawyer and the advice doled out in 15minute segments to SMEs, but there is a solid chain of substitutability and a range of specialists at every point in that chain.
There are now only some 120 law firms employing well over half of the specialist employment lawyers in private practice in the UK. The interesting issues is that there are now 170+ consultancies, independent HR teams, publishers, franchises, and adviceand assistance insurers who offer employment law and employee relations services. There is an increasing overlap between the two in some sectors, and there are some major trends in play. This is also just the services provided commercially to employers,not employees. A few do cover both, of course, but in the main the employer services specialists are the focus here.
Macro trends………………
SegmentationsThe market at a headline level is clearly encouraging alternatives to law firm services. Barriers to market entry are also lower for a mid-market HR consultancy than a global law firm, for example, but the devil is in the detail. It is unwise to believe too that the top law firms are in crisis – the good ones are really doing fine – more than fine. The headlines will mislead unless you segment between global law firms and the nationally based major firms; boutiques and franchises, etc. Pressures on consumer led services and commercial ones are radically different too. Equally, clients have to be segmented between the global players, the major enterprises, the large and medium enterprises (LMEs) as well as the SMEs and micro businesses.
No hype: just facts…
It’s Not a Beauty Parade
It’s Due Diligence
Employment Law & Employee Relations
Competitive dynamicsEmployment
Law &Employee Relations
Market sizeThe top 121 law firms in 2014 made ...
Segment performanceExternal spend on employment law and employee relations combined will ...
Growth ratesThose law firms prioritising employment law services are ...
Leading players…the magic/silver circle firms are the leading law firms in terms of UK revenues with ….
Industry reshapingThe global and magic circle law firms are ...
Returns and investment intensityMarket entry is still …
Industry performanceThis is a market which even for mature or pressurised sectors can …
New entrantsSustained law firm investment in new business models remain …
Substitutes & buyer powerGCs are common not just in global businesses, but ...
Complex academic and economic approaches
distilled…
This Is Not What Success Looks Like
Competitive dynamicsEmployment
Law &Employee Relations
Directional FocusMentor does not compete with Lewis Silkin: but ...
Supplier powerMagic and silver circle law is ...
Intensity of rivalryRivalry is high both intra-industry and inter-industry...
ComplementorsThe next door market is not GRC environment or compensation and benefits predominantly –although both matter…
ITPayroll and enterprise software developers should ...
Core servicesEmployment Tribunals test the ...
ReactivenessLawyers have been really ...
Critical resourcesGood lawyers are plentiful. The market opportunity is ...
Competitive axes: adviceEmployment
Law &Employee Relations
There are effectively 5 main issues clients want covered when looking at outsourcing employment law and employee relations:
AdviceProofReputationCapacityEffectiveness
Advice
Being able to advise on employment law is a widely variable skill set. Everybody claims to be the best at what they do - but forsome clients talking to a solicitor straight away will be uppermost – while for others that’s serious overkill.
Most advisors ensure …
Based on decades of extensive client research and
experience – the client drivers come first…
Employment
Law &Employee Relations
but there are just so many choices now
Competitive axes: adviceEmployment
Law &Employee Relations
Five representative suppliers for mid-market clienteles are illustrated opposite in terms of how their services match or exceed client benchmarks. Broadly speaking clients expect the subject coverage to be a ‘given’; they want ...
Subject coverageThere is currently an over supply of lawyers and paralegals in the UK – finding people …
Technology EnablementClients expect mid-market suppliers in particular to be …
Named Adviser or Call CentreA call centre is not inherently better or worse than any other form of advisory delivery. Buyers will be (rightly) sceptical about …
Accessibility/Hand-offsAn acid test for advisory services is …
TailoringAdvising team leaders and line managers ...
Employment
Law &Employee Relations
Yes it’s time to hurry up…
Law firms doing only employment lawEmployment
Law &Employee Relations
3 HR Legal Part
Abbiss Cadres A major
Analysis Legal A Cheshire
Archon Solicitors A specialist
Averta A 9 fee
Brahams Dutt Badrick French Led by
CM Murray A city and major
Collingwood Legal Led by Paul
Crossland A 5 fee earner
DC Employment A regional
Doyle Clayton Claiming to be
E3 Employment law 3 partners in
Fox An employment
GQ Employment Law An
Kidwells/Legal Shield OK, they do
Menzies A Bristol based
Mulberry’s Offering employee
Quantrills One of the earliest
rRadar A
Springhouse Law Led by Ben
Tactical A Twickenham basedThomas Mansfield A firm for
Long term market growth and 2020 projectionEmployment
Law &Employee Relations
The economics: boiled down and simplified
Key suppliersEmployment
Law &Employee Relations
Company/Firm Name
A brief description of the company and its service profile to act as an aide memoire only. The chart shows market share trend over the period 1995 to 2020 as defined according to their divisional focus on employment law and their market as defined above.
3HRplcAbbey ProtectionAbbiss CadresAcuity/M&AAdare (Ire)Addleshaw GoddardADP-OneClickHRAdvanced Computing/LaserformAdvanced Contracting/HRPlusAdviser PlusAffinity HRAgility UK…
…
DWFDynamo LegalE3EagleHR/HCREBS LawECAEclipseEducation PMLEdwin CoeEEFEffective HRELASEllis WhittamEMIS SenecaEmpire HREmplexEmployeaseEmployeasilyEML/Simplaw Employment Advocacy servicesEmployment Law ClinicEmployment Law Consultancy, The
Employment Law EssentialsEmployment Law ConsultantsEL Consultants (NI)Employment Relations ServicesEmployment Services PartnershipEncompass Development GroupEpoQ/Law AssureEvershedsExari…
…
LawspeedLewis SilkinLexis VisualfilesLighthouse RiskLimeHRLinden managementLinklatersLloyd/LELCLSGMacfarlanesMagenta HRMagenta Moon Matheson & Horan/MHAssistMayer BrownMentor: RBS
MenziesMichelmoresMills & ReeveMischon de ReyaNabarrosNetLawManNorthgate: First Business/Moorepay Norton RoseNorwelOlswangOsborne ClarkeOutsetUK…
…
WKUK-Croner/IRPCWorking with schoolsWirehouse Employer Services LtdWragge Lawrence GrahamXactXpertHR/IRSZylpha/XpressDocs
Structure follows strategy: 120+ law firms 170+ consultancies all tracked
Finding Support on Employee Relations Matters Just Got A Lot Easier – But Who?
20
SuppliersEmployment
Law &Employee Relations
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25 year market share trends for
70 firms: All the financial
facts boiled down to one simple
chart.
Employment
Law &Employee Relations
says
who?
says NED: trusted, experienced, insightful, independent, due diligence experts and non-execs
Version 1 Hand Offs and Partners
Version 2 Content Marketing
Version 3 Retainers and Reliance
Version 4 Intelligent Design
Version 5 Client Pull
Do’s
Don’ts
Employment
Law &Employee Relations
Perspectives
There are no right and wrong answers here – just what you are comfortable with (or comfortably uncomfortable with).
You can jump from V1 to V3 or even V5, it is just much harder than it looks.For some large law firms, opting out of ‘day-to-day’ employment law is already complete; ditto some high street firms. V1 is not inherently ‘inferior’; it follows from the strategy of the core business. If day-to-day employment law and employee relations is key to your business, however, you need to aim for V5.
Just be prepared for the next summit to be bigger than the last each time.
Law Firm Service Development
Practical perspectives on: Where next?
What now?How Fast?How Big?
The Do’s and Don’ts
Employment
Law &Employee Relations
The NED Service or The Report?trusted, experienced, insightful, independent, due diligence experts and non-execs
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If you know you need to make a move, but you want the facts to make an evidence based decision and about where, when and how, the Business Intelligence report delivers. From the market economics to the Who’s Who and the key issues GC’s expect, its all here. You get:
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‘Doing nothing is really not an option any more. Croner is on some heavy hitter GC panels already. Ellis Whittam employ more employment law solicitors than Allen & Overy. Citation just bought £6m worth of new clients in the mid-market to cross sell to actively. Irwin Mitchell are fighting back hard; Kennedy’s, HCR, Capsticks, QS, Brodies, Pinsents and dozens of others are changing the game too. It’s not ‘disruptive’; it’s not ‘survival’; it’s quite simply good business sense and worth the effort: start here.’
David R Johnston LLB MBA CEO RBP [email protected]
Employment
Law &Employee Relations
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