Law: A time to change - or die: Brian Woods-Scawen has a message for lawyers: the benign atmosphere of the Eighties has gone for good. Sharon Wallach talked to him

LAWYERS have no alternative but to change if they are to succeed, or even survive, according to Brian Woods-Scawen, the chairman of corporate finance in Birmingham for Coopers & Lybrand.

In the summer Coopers will publish its second annual financial management survey of law firms throughout the country, and Mr Woods-Scawen has been discussing the survey's preliminary results with lawyers. The theme of his seminars is how their world will look up to the turn of the century and beyond.

The world has changed permanently since the Eighties, when success came for so many through a coincidental series of benign factors that are unlikely to recur, Mr Woods-Scawen believes. 'The winners and the losers will not necessarily be those of the past,' he says, 'and the gap between success and failure has widened.'

The winners will be broadly the top 25 per cent of firms; the rest will have to run even faster just to stay abreast. 'The pace of change is such that as firms lose their market position, others will just as quickly come to the fore. Only those firms that recognise change and respond to it will succeed, and the penalty of failure is much higher than formerly,' says Mr Woods-Scawen.

The road to success has altered dramatically. 'The chances are that if it worked for you in the past, it won't work now,' he says. Whether death comes suddenly, via bankruptcy, or through more gentle decline, it will nevertheless come.

Mr Woods-Scawen says: 'I tell lawyers, slightly tongue-in-cheek, that there are only four things to get right: clients, market, people (including partners) and profitability. That comes last because it is a consequence of the other three. All clients, not just the multinationals, now know what they want. They know how to buy services, and that is something that, once learnt, they won't forget.'

He stresses the importance of specialisation on the part of the lawyer, rather than what he calls 'personal enthusiasm'.

Also vital is the international dimension. Even for small companies, dependence on the UK market is dangerous, and this applies equally to their lawyers. 'Just offering a client a phone number of someone in Frankfurt who can do his work in Germany is not good enough. The quality of advice will reflect on the referrer. I'm not prescriptive about the model of international connection. It could be a full-scale office abroad, or membership of an international grouping, but the essential thing is to be able to deliver the same quality service there as here.'

Another factor is that as advice becomes increasingly specialised, the client wants it better co-ordinated. 'Managing the totality of the client relationship will become increasingly important. You could say it's a return to general practice, albeit at a different level.' Poor co-ordination exists within some of the largest law firms, Mr Woods-Scawen notes.

Understanding how the market is changing comes next on the list of things to get right. Some firms have been swift in identifying new services - such as compulsory competitive tendering and other issues in the public sector - and responding to them, Mr Woods- Scawen says. 'The winners will not just be meeting expectations, but exceeding them. You have to know what the clients' expectations are and this means talking to the client, maybe for the first time, and being frank. In the vast majority of cases this doesn't happen.'

He cites the case of a client who may feel that he has been edged out, that his professional advisers have taken over. 'So he doesn't feel good, notwithstanding that he may have had excellent technical advice, and next time, you may be sure he will go elsewhere.'

The third concern is people: first, the question of who is entering the profession. 'There are greater challenges than ever for the brightest of the generation. All different parts of the economy want them, so the legal profession must fight hard. And increasingly, young people are looking for firms that are innovative. What the firms must do is respond to their lawyers' personal needs and remember that they are real people and not just providers of technical advice.'

Much is currently heard about the 'partner bulge'. 'Nowadays, everyone is saying that partnership is not a season ticket for life,' Mr Woods-Scawen says.

The most successful firms will be those that identify these issues in advance. Firms that do not keep their partners on their toes, but instead let them assume their positions are unchallengeable, will not only lose their most promising younger lawyers, but will also provide a recipe for self-destruction, he says.

Profitability has two components: partners' take-home pay and funds for investment. 'Under pressure, the latter goes first,' Mr Woods-Scawen says. 'This has many consequences: no recruitment, no investment in developing areas of law, no spending on capital goods, no international links. In fact, it prohibits you from doing everything you need to do to be profitable.'

Some firms in the traditional top 15 will not find it so easy to cope with changes as others, and we will see them decline, Mr Woods-Scawen believes. 'They will be slow to identify the need for change and will then do it the wrong way. Most programmes for change fail because they are tackled wrongly. But that's true of the whole world, not just the legal profession. I've seen it happen in many firms. They embark on a programme of change across the whole firm, they start with the board of directors, they focus

on systems and procedures (which are just responses and not the drivers of change), they appeal

to the brain rather than the heart.'

Mr Woods-Scawen's advice is to start at the bottom, with one small unit. 'Make that a success, then everyone sees that it has worked and wants to be part of it. You will then be able to instigate change across the board.'

The keys to success work for the entire profession and not just the commercial firms, Mr Woods-Scawen says. 'Many of the issues are valid for the general practitioner, as well as the legal aid practitioner facing imposed changes such as franchising.'

He is aware that much of what he says is self-evident. 'These issues of clients, markets, people are not at the frontiers of science. It's not desperately difficult. But emotionally, change is hard to accept. It is very threatening, and it takes exceptional people to welcome it gladly.'

Resistance to change may be widespread, but according to Mr Woods-Scawen, solicitors are having no difficulty recognising that their financial performance has deteriorated and that they are being challenged strategically. 'I have come across almost no resistance to the message and the advice we are giving firms on the ground,' he says.

(Photograph omitted)