Money Matters

With the economic crisis looming all around us and recovery nary in sight, many lawyers and firms have been hard hit. Down-sizing, retrenchment, pay cuts, wage freezes are all becoming a very common refrain. Even stories of some lawyers having to moonlight as taxi drivers do not raise brows anymore. It has become almost a badge of honour to be able to say to one's counterpart: 'What! You had a wage freeze only? My firm has cut salaries by 20%. Now, try and beat that!'

The prognosis for a recovery is gloomy for Singapore and the future looks increasingly uncertain as Singapore is in a more dire position than many of its counterparts. Although the United States is forecasting that a recovery is round the corner (barring another '9-11' unspeakable crime), Singapore may not follow suit as we are in a unique and, unfortunately, more vulnerable situation. The cost of doing business here is simply too high, resulting in many businesses moving their operations to next door Malaysia, Thailand or Shanghai. The latest news of Taiwanese shipping giant, Evergreen Marine, and its subsidiary, Uniglory, seeking to shift its operations to Malaysia, is just the latest in a series of such business relocations.

What this means is the loss of more jobs. But the gravity of the situation has yet to hit home with many Singaporeans, who are still turning up their noses at lower paying jobs, still refusing to accept a job if it means extra travel time, 'pooh-poohing' the idea of going for skills retraining and blatantly asking their MPs for financial aid, with their maids in tow.

The point I want to emphasise is: lawyers are not untouched. We can no longer hide behind our degree scrolls and say: 'We shall never face structural unemployment because we are well educated or because we are professionals'. Already, the cracks are beginning to show. Look what is happening to conveyancing. And with companies like TrustOne providing do-it-yourself will-making and will-custody kits to the public, lawyers can expect to see another area of practice disappearing. Indeed, our future clients will obtain most of the information they need from the internet. Lawyers will thus have to move away from being bogged down from the routine. This will focus attention on our ability to provide the extra value.

It all used to be so easy - setting up a firm, putting up your signboard, hiring a few lawyers, servicing clients and balancing the books at the end of the month. Today, lawyering is no longer an iron rice bowl, and running a business is like surviving a bad bout of flu; there are so many new strains of the virus, whoever can find the latest antibiotic and has the stamina to sit it out will be better off than his languishing neighbour.

All of a sudden, we are surrounded with somewhat new and foreign words such as 'multi-disciplinary practices', 'globalisation', the need to 'diversify', the importance of a 'strategic' plan, 'marketing' know-how, the use of IT to 'leverage' one's business, the list goes on, and is enough to intimidate a person into hanging up his robes.

In my speech at the Opening of Legal Year, I emphasised that the Law Society is committed to helping our members respond to the present difficulties and to give them the means and tools to survive this downturn. But members must first accept that the situation is grave, that upheaval is inevitable and that change, and the willingness to change, must come from within. Only then can we swing into action. Change, after all, is chance, which favours the mind that is prepared.

For starters, we ought to talk about some basic bread-and-butter issues regarding running a practice and the art of being an employee. There are numerous ways of running a business, countless schools of thought on the hows and whys, and an endless parade of the latest marketing 'gurus' who all claim to have the secret ingredient to putting your business back on track. I want to share a few commonsense strategies that we, whether running our own practices or simply seeking to maintain our employment and our employability as lawyers, ought to take note of.

Know Your Basics
Billing hours and fees billed do not reveal the true, bottomline performance of a firm. The figures on the invoices billed out to clients may look very impressive, but they don't mean a thing if overheads and operating costs are sky-high, resources are inefficiently utilised or if clients are failing to pay up.

Human Resource Management
Ever wondered why staff turnover is high and morale low, resulting in more lawyers leaving the profession or others playing musical chairs and firm-hopping in the hope of finding the elusive 'perfect' firm? Get the house in order, and order will reign. Every company has a certain 'culture', whether it is deliberately cultivated or otherwise. Edgy, 'hip' firms will attract the young, open-minded sort; old school types will attract the more staid and conservative lawyers and so forth. You cannot fit a round peg in a square hole. So size up your candidates, outline your expectations, think about fit rather than grades alone, and you can save yourself, and them, a lot of grief.

Quality Work
Know your stuff. It cannot be over-emphasised. Dressed up offices and excellent PR can only do so much. It is substance that counts at the end of the day. Do your job well. Go the extra mile for your client. Hone your skills and excel in your chosen area of specialisation.

This is where I would like to say a word about 'full service firms' if such a thing is possible. Rather than drawing clients to a firm with the words 'full service', clients are wont to view such claims with scepticism. 'How knowledgeable and capable can my lawyer be in my area of work if he seems to have his finger in every other pie?' 'Would he be able to devote all his attention to my conveyancing matter if he's also handling civil claims and divorce cases?' This may be the train of thought running through a client's mind.

Size
Bigger is not always better. The correct size of a firm determines quite largely its financial success. Firm size must be vis-à-vis one's client base and the type of legal services offered to that client base. A firm that is too large for its market will be burdened by high costs and will eventually fail. If firms wish to expand, they must do so for sound business reasons and get their sums right before embarking on it; otherwise the problems of growth will far outweigh any advantages.

Differentiate
Today, there are 40,000 brand items on supermarket shelves. Messrs Tan & Tan. Messrs Tang & Tang. What is the difference? Why should a client choose one over the other? It is all a matter of differentiation. How does one differentiate and stand out from the other 765 firms here? Contrary to popular thinking, it is not on the basis of price, creativity, quality or customer orientation. It is not easy to differentiate, and definitely harder to teach it. There are whole books written on this topic alone. What comes to mind about differentiation, in a nutshell, is one's ability to be different, to stand out from the crowd, to make an indelible impression.

You can avoid your demise if you can prove that you are adding unique value to what you are selling or make sure you re-organise yourself in ways which ensure not only the retention of your clients but the expansion of your client base with an emphasis on quality and good service. And we can because we are in the most versatile of all professions.

All that said, the Law Society will not overlook the immediate needs and welfare of its members in trouble. That is why we have the welfare fund in the first place. But then, funds are not inexhaustible. And it is far better, as the old saying goes, that we teach you how to fish than merely feed you the fish. So, rustle up the moral courage, take a deep breath, and cast your line into the water. You never know what is waiting for you at the end of the line.

It is a tough brief for me as leader of the Bar, but I always relish a tough brief. Today's economic climate does not augur well for those who sit idle and lack the vision.

The Council of the Law Society recognises the dreary climate, and modernising our sales and seeking tax incentives is one sure way for the profession to stay ahead in the market place. If we do not, other providers - perhaps less ethical and of poorer quality - will attempt to fill the vacuum.

Given the substantial sums at stake, the client will be the judge of our services. Money matters.

Palakrishnan, SC
President
Law Society of Singapore

Your President Listens Members of the Law Society will continue to have the opportunity to meet Mr Palakrishnan, SC, President of the Law Society, at his fortnightly Saturday sessions at the Law Society's premises between 10.30am and 12noon. The sessions for next month will be on 2, 16 and 30 March 2002.