Full Disclosure:​

The Business of Law Firms​

By Jaysen Sutton​
📩 Sign up here to receive a new edition of 'Full Disclosure' directly into your inbox, every week.​
Click to expand...

Hi Reader 👋🏽,

One aspect of being a lawyer that is commonly missed out is unrelated to the legal work or the commercial advice. It is the fact that you are joining a business.

This is what we mean when we say the ‘business’ of law firms.

This point is important. Law firms want to hire people who aren’t there to just do the work. They want people who care about the law firm they are working for.

As you progress, it’ll become more important to think about this role in relation to how you market yourself, the relationships you build with clients, and the time you spend generating new work for the firm.

How does this show up in an interview?

Really, it comes down to a few things. One is your motivation; when you answer questions about ‘why are you applying to this firm?’, a firm is looking for enough specificity that demonstrates you have really thought about why you want to apply to this firm.

If it sounds like this is just one firm among many that you are interested in or that you don’t understand the firm you are applying to, you won’t make it to the next round. This is the unfortunate reality; given how competitive the legal market is, a law firm needs to know you’ve really thought about this, otherwise they won’t feel confident you’ll stay at the firm long enough to justify their investment.

The second part to this is understanding the business of law firms. I wrote this post last year, which I think will give you foundations.

  1. Think of law firms just like any for-profit business. They need to make more money than they spend. Their sales come from selling the services of the lawyers who make up a firm to clients. Law firms must manage their sales alongside the cost of staff, which is a law firm’s biggest expense given their business model is predicated on individuals delivering legal advice.

  2. Lawyers in law firms are specialised. They organise themselves around practice groups, such as funds, finance, or litigation, which refers to their area of legal expertise.

  3. Law firms position their services in different ways. You can learn a lot about what a law firm is trying to signal by reviewing the marketing copy on its website and recruitment page. For example, a law firm may pride itself in its ability to fully service the needs of clients across the globe, while another may champion its focus on delivering legal advice in a selection of client industries.

  4. Lawyers ‘sell’ legal expertise to clients. The primary benefit of this legal expertise to a client can take many forms. If I’m going to buy a company, I may value the security of having a safe pair of hands to take me through the process. Other times, I may be after the creativity of a skilled lawyer, the certainty that comes with outsourcing legal compliance, or the persistence of a lawyer to negotiate a deal on the most favourable commercial terms.

  5. Law firms must compete with many similar law firms to attract you to apply to their firm and retain you once you have joined.

  6. The traditional law firm partnership structure lent itself well to retention because lawyers progress up a pyramid structure, towards a higher income, level of responsibility and title. Today, law firms must grapple with the availability of information surrounding alternative career paths, the likelihood of moving firm, and the increasing number of lawyers evaluating their long term career needs.

  7. Lawyers traditionally deliver legal services by selling their time. On a basic level, the ‘billable’ time spent on a client matter is multiplied by the rate of the lawyer(s) to determine the cost of working on the matter. Because a law firm’s ‘sales’ is generated from the proportion of time that lawyers spend billing their time, law firms closely measure how time is spent.

  8. Ultimately, people buy legal services, which is why law firms speak so much about client service. As lawyers become more senior, it becomes more important to build and maintain client relationships to sell the legal services provided by a law firm.


Have any thoughts? I'd love to hear your perspective below!

❓Contact [email protected] with any queries.