After admission as an attorney of the High Court of the respective judicial province, newly minted attorneys follow the well beaten paths of associateship in law firms, legal advisor roles in private and public entities or some go to the bar to pursue careers as advocates. These are lucrative, viable and familiar options, however in the last eight years the trend of legal consultancies has grown and we want to shed some light on how they operate.
In order to run a legal consultancy, it is preferable that one is an admitted attorney who is enrolled on the non-practicing roll of the High Court. Most consultancies operate through a private company which is regulated by the Companies and Intellectual Property Commission (CIPC) and the Company's Act.
Most attorneys who run consultancies have been trained in law firms, therefore they are attuned to the concerns of clients on the quality of work and managing clients matters in a professional manner. Those who have a big law firm background still carry that strand of understanding that they acquired during their training.
What are the benefits?
It is not to say that consultancies are better than law firms, but rather that they offer clients an alternative. A number of consultancies, especially globally, such as Axiom from the USA and Spoke from the UK use an on-demand model, whereby a client is only billed for the work done. Consultancies run a lean model, with low overheads and therefore there are fewer costs, apart from actual time spent on the matter - to pass on to clients. This becomes an advantage to clients in that they can outsource specific, tailored work to consultancies and keep specific matters e.g. litigious matters for law firms.
Using a consultancy may work out to be more cost effective than having a fleet of in-house attorneys when looking at the cost to company (salary, bonus, medical aid and pension contributions) of an employee versus from the cost of a consultant doing the work. A consultant must earn every hour they charge for, whereas monitoring the efficiencies of employees can be a little more difficult.
Legal consultancies also tend to be agile and technologically savvy to help streamline certain services, thereby bringing down costs, e.g. using secure online data storage facilities rather than renting out big office space filled with filing cabinets.
At times, consultants can work closely with law firms to provide niche expertise on certain sectors, to plug in when additional capacity is needed, e.g. for an extensive due diligence investigation or for secondments when a firm's attorney is on maternity leave or sabbatical. What binds us all is the desire to deliver work of the highest quality to a client by whatever means necessary. Legal consultancies give attorneys the opportunity to exercise their entrepreneurial flair, through the value of their skills. It allows them to have a better work-life balance as they keep flexible working hours.
The greatest benefit for clients, apart from the financial savings, is the attentiveness they can receive from legal consultancies. Small to medium sized companies, or even large corporates are vying for each others attention in law firms, whereas in a consultancy specific attention is paid to every client. This guarantees a faster turn-around time at a quality that the clients are familiar with.
Although the Law Society does not regulate the activities of legal consultancies, a consultant is a non-practicing attorney and the Law Society regulates all attorneys whether or not they are on the practicing or non practicing roll.
Position of the Law Society of South Africa
As it currently stands, the Law Society of South Africa has made it clear that they do not regulate the activities of legal consultancies. However in view of the changes and global advancements in the way that business is done with respect to outsourcing the needs of different clients, it would be good for the Law Society to do so as a sign of inclusiveness.
We are looking forward to the Legal Practice Council, which has been founded in terms of the Legal Practice Act, we hope that they will encourage a more inclusive and innovative legal fraternity.
What if something goes wrong?
In three years of running a consultancy and working with other consultancies, the frequent concern of clients is what will happen if something goes wrong, since the legal consultancies are not regulated by the Law Society and do not contribute to the Attorneys Fidelity Fund?
To overcome this fear, it will be prudent for the client to ensure that the legal consultancy has Professional Indemnity Insurance of a value that gives them security. Legal consultancies are not covered by the Attorneys Fidelity Fund which pays out for claims against attorneys who are professionally negligent, however, Professional Indemnity serves the same purpose.
One must also not misunderstand the meaning of the term non-practicing attorney. Although the Law Society does not regulate the activities of legal consultancies, a consultant is a non-practicing attorney and the Law Society regulates all attorneys whether or not they are on the practicing or non practicing roll. Therefore any misconduct or unethical behaviour of an attorney can be reported to the Law Society for their investigation and eventually that attorney may be struck off the roll.
This should give clients comfort in that they are not dealing with a dubious character, but they are contracting a qualified, professional attorney to handle matters on their behalf. The needs of businesses are changing so dynamically and every company must find a legal partner that meets these needs quickly, professionally and affordably.
Quick Tip: Clients must keep documents in an orderly manner so that when approaching the attorney, everything is organised and allows the attorney to find what they need quickly. Thus saving on time and ultimately money.