The Blog
The Education Legal Services Sector
Posted: 19 October 2016
It is a problem for lawyers, compliance consultancies and regulators alike that consumers of legal services don't easily agree on when an issue becomes "legal". The Competition and Markets Authority (CMA) summed it up as:
"the legal services sector is characterised by incomplete or asymmetric information;
in particular that consumers are often unable to judge quality
before (or after) they choose to buy a legal service"
Head Teachers and school business managers are like anyone else in this regard. Most will have lawyers on their Governors' Board, but still see them as expensive (probably), unpredictable in costs terms (certainly), and generally to be avoided if at all possible. This dichotomy is pervasive.
Meanwhile, the sheer number of compliance events that school and colleges have to deal with daily keeps rising. It's a busy, pressurised, compex people driven industry - so what do you expect?
Buying law:
In all areas of legal service provision now, work is being disaggregated - and the Education sector is no different. Professional buyers of legal services are happy to use lawyers for what they're good at, but expect them to either charge less for the more transactional work or to butt out altogether. Buyers will then either bring that work in-house (where it is critical to the enterprises' processes, and typically automate it heavily), or outsource it to GRC (governance, risk and compliance) specialists.
Futurists in legal services see this as the end of lawyers or equally catastrophic in its implications, whereas it is in fact fairly simple market economics in play here as elsewhere. This is not the Uber disruption of taxi markets or the search engine company building cars, but simply shrewd buyers voting with their feet.
Disruption:
There is disruption, and it is painful. Conferring autonomy on schools to manage their own people, property and procurement risks inevitably undermines the role of centralised monopolistic teams. Many of these cover all the compliance issues in great depth and offer everything to everyone. The dependency here was all on the LEAs and it worked only on compulsory basis. Now that the School Leaders have the power, dependency is now on them, and these LEA teams can only expect to see more and more challenges ahead. Several ex-LEA teams are independent now and counting on being able to work beyond their old geographic constraints as a route to success. Traded services teams ditto. Meanwhile the GRC suppliers are cherry picking the services and clienteles, and continue to undermine this old monopoly.
Based on the benchmarks these new independent suppliers provide, we estimate that the Education sector as a whole in terms of legal, governance and risk management services used to be worth in the region of £1.2bn pa. It has already dropped to c£0.8bn as the structural changes progress in the education sector generally. This is the scale of the decline challenge facing the suppliers to the public sector here. It is painful and all but impossible to get ahead of this declining curve.
Legal Services from Law Firms
Law firms are not seeing these declines as they have always been the outsourced last resort for litigation and major projects support. Where they do face a challenge, however, is that (a) their historical ability to dominate the procurement frameworks is diminishing, and (b) the new breed of GRC suppliers make it their business to reduce the need to rely on expensive legal solutions at all. Law firms are, in effect being relegated to the brand protection litigation (safeguarding) and major projects (academy and MAT conversions, etc). This is lucrative work, albeit issues such as TUPE and academy conversions are also now becoming increasingly commoditised. With almost a third of schools already independent in some shape or form, the end is in sight in terms of the regular supply of these major projects. Law firms then have to choose. Some will redeploy their employment law and property specialists elsewhere (probably in health or 3rd Sector work). Others will dig in and aim to compete head on with the GRC consultancies as (a) it is worth it on its own merits, and (b) it preserves the little high value contentious work that remains for them as and when it still arises.
That firms like Clifford Chance, Allen &Overy, Linklaters, Freshfields, Norton Rose, Hogan Lovells, Herbert Smith and CMS are already absent from these league tables means that 10 of the top twelve law firms have better things to do. They can and will tackle education law projects when they arise, it's just that they do not put them in their priority list and are not devoting time and resources to building a specialism here. They will undoubtedly have the technical capabilities, but maybe not the in-depth relationships that working in a sector continually develop over time. Of the law firms who do focus here, they are able to grow at comparable levels as the GRC market suppliers, but there is currently a 2 point deficit on these growth rates. As a group of suppliers law firms no longer have the dominance they once did and are already beginning to fall behind (with some notable exceptions, of course).
Law firms have a unique opportunity to help every school and college through the structural changes transforming the sector. The opportunity to keep each of these schools as long term clients is the challenge. Typically firms keep 31-47% of these colleges as long term clients, when the target should be 100%. Getting to 100% requires redesigning solutions and being prepared to tackle commoditised, pile-it-high, paralegal, or transactional work - all terms that many lawyers use pejoratively. The lesson from this market is that this work is now both bigger, more consistent and more lucrative than the historic legal work.
GRC Suppliers
The simple truth is that School leaderships are choosing other suppliers. Legally competent suppliers, but also ones with technology, management systems and niche specialisms which law firms often struggle with. Some lead with HR services, some with financial support, some with IT/SIMS expertise, and in many cases it is the successful fusion of all of theses competencies that makes the proposition very successful. Even before 2002 there were some early pioneers providing compliance services for schools with or seeking autonomy. In some cases Heads here were prepared to pay for external support even when they had to continue paying for the centralised services - a sign that the tide was changing. Brands such as CEFM, EPM and Strictly Education have a long pedigree here and while it took the 2010 changes for their full potential to be realised, they were pioneering the GRC support services for over a decade before then. A large number of regulatory consultancies (specialists in HR and safety for SMEs) support schools with compliance, and one has now bet the shop on the sector to deliver genuinely innovative packages, namely Judicium Education. They are bringing the packaged pricing approach to the sector alongside a growing list of specialist HR and safety teams. From a more finance background, teams like SBS (School Business Services) are similarly doing well, capitalising on the rise of the school business manager profession as much as the growth in autonomy overall.
Even in some of the traditional law firm specialisms there are good alternatives now. B3Sixty is a team of dispute resolution specialists in education, and teams like Premier New Schools and Place Group came through the BSF initiatives to offer project and procurement specialisms. Publishers like Croner may have moved on, but The Key team are filling the gap admirably.
HR and payroll teams are plentiful from Dataplan to Strictly, and from ECC to the Schools HR Co-operative. New teams such as Enlightened HR, Educate HR and SIPS Education bring fresh energy and ideas, and insurance led teams like Schools Advisory Service have innovative packages too. Meanwhile the full service teams coming out of LEAs include 3BM (London Boroughs), EES (Essex), HFL (Herts), NPW (Newham), One Education (Manchester), Pact HR (Bradford), SPS (Kent) and Schools HR (Wiltshire) bring the full LEA range to neighbouring areas too.
There are technology specialists aplenty too, and what could have been an enterprise sector dominated by the large payroll bands has again been claimed much more effectively by innovative entrepreneurs. School management information system specialists are well represented and some such as Engage migrate into compliance support well. Frontline SLA offer comprehensive support to the hard pressed LEA teams considering a traded services future, and from an asset management background Every are offering a full suite of support for schools in managing contracts, compliance and help desks.
Law firms can and are staking their claim to some of this new suite of services. SAS Daniels are one such; Winckworth Sherwood actively partner with many of the above, and Stone King are developing their own suites on the back of advisory support to NASBM and FASNA membership. Teams like Browne Jacobson are very active with affinity groups; a channel dominated by law firms overall, while in the main GRC teams go direct.
A Market Watershed
We are at a watershed. Soon over half of the schools in the country will be genuinely autonomous in compliance purchasing. School business managers and professional procurement disciplines are well established and tackling legal services as much as the other categories of spend now. While law firms collectively can make £155m pa in terms of support services in education generally, the core repeat business within this (ie excluding one off major projects) is some £58m. The power of GRC suppliers is already £96m and rising. School leaders are voting with their feet. They prefer the solutions which build fences at the top of the cliffs to equipping ambulances at the bottom at the rate of 3:1 now.
"the legal services sector is characterised by incomplete or asymmetric information;
in particular that consumers are often unable to judge quality
before (or after) they choose to buy a legal service"
Head Teachers and school business managers are like anyone else in this regard. Most will have lawyers on their Governors' Board, but still see them as expensive (probably), unpredictable in costs terms (certainly), and generally to be avoided if at all possible. This dichotomy is pervasive.
Meanwhile, the sheer number of compliance events that school and colleges have to deal with daily keeps rising. It's a busy, pressurised, compex people driven industry - so what do you expect?
Buying law:
In all areas of legal service provision now, work is being disaggregated - and the Education sector is no different. Professional buyers of legal services are happy to use lawyers for what they're good at, but expect them to either charge less for the more transactional work or to butt out altogether. Buyers will then either bring that work in-house (where it is critical to the enterprises' processes, and typically automate it heavily), or outsource it to GRC (governance, risk and compliance) specialists.
Futurists in legal services see this as the end of lawyers or equally catastrophic in its implications, whereas it is in fact fairly simple market economics in play here as elsewhere. This is not the Uber disruption of taxi markets or the search engine company building cars, but simply shrewd buyers voting with their feet.
Disruption:
There is disruption, and it is painful. Conferring autonomy on schools to manage their own people, property and procurement risks inevitably undermines the role of centralised monopolistic teams. Many of these cover all the compliance issues in great depth and offer everything to everyone. The dependency here was all on the LEAs and it worked only on compulsory basis. Now that the School Leaders have the power, dependency is now on them, and these LEA teams can only expect to see more and more challenges ahead. Several ex-LEA teams are independent now and counting on being able to work beyond their old geographic constraints as a route to success. Traded services teams ditto. Meanwhile the GRC suppliers are cherry picking the services and clienteles, and continue to undermine this old monopoly.
Based on the benchmarks these new independent suppliers provide, we estimate that the Education sector as a whole in terms of legal, governance and risk management services used to be worth in the region of £1.2bn pa. It has already dropped to c£0.8bn as the structural changes progress in the education sector generally. This is the scale of the decline challenge facing the suppliers to the public sector here. It is painful and all but impossible to get ahead of this declining curve.
Legal Services from Law Firms
Law firms are not seeing these declines as they have always been the outsourced last resort for litigation and major projects support. Where they do face a challenge, however, is that (a) their historical ability to dominate the procurement frameworks is diminishing, and (b) the new breed of GRC suppliers make it their business to reduce the need to rely on expensive legal solutions at all. Law firms are, in effect being relegated to the brand protection litigation (safeguarding) and major projects (academy and MAT conversions, etc). This is lucrative work, albeit issues such as TUPE and academy conversions are also now becoming increasingly commoditised. With almost a third of schools already independent in some shape or form, the end is in sight in terms of the regular supply of these major projects. Law firms then have to choose. Some will redeploy their employment law and property specialists elsewhere (probably in health or 3rd Sector work). Others will dig in and aim to compete head on with the GRC consultancies as (a) it is worth it on its own merits, and (b) it preserves the little high value contentious work that remains for them as and when it still arises.
That firms like Clifford Chance, Allen &Overy, Linklaters, Freshfields, Norton Rose, Hogan Lovells, Herbert Smith and CMS are already absent from these league tables means that 10 of the top twelve law firms have better things to do. They can and will tackle education law projects when they arise, it's just that they do not put them in their priority list and are not devoting time and resources to building a specialism here. They will undoubtedly have the technical capabilities, but maybe not the in-depth relationships that working in a sector continually develop over time. Of the law firms who do focus here, they are able to grow at comparable levels as the GRC market suppliers, but there is currently a 2 point deficit on these growth rates. As a group of suppliers law firms no longer have the dominance they once did and are already beginning to fall behind (with some notable exceptions, of course).
Law firms have a unique opportunity to help every school and college through the structural changes transforming the sector. The opportunity to keep each of these schools as long term clients is the challenge. Typically firms keep 31-47% of these colleges as long term clients, when the target should be 100%. Getting to 100% requires redesigning solutions and being prepared to tackle commoditised, pile-it-high, paralegal, or transactional work - all terms that many lawyers use pejoratively. The lesson from this market is that this work is now both bigger, more consistent and more lucrative than the historic legal work.
GRC Suppliers
The simple truth is that School leaderships are choosing other suppliers. Legally competent suppliers, but also ones with technology, management systems and niche specialisms which law firms often struggle with. Some lead with HR services, some with financial support, some with IT/SIMS expertise, and in many cases it is the successful fusion of all of theses competencies that makes the proposition very successful. Even before 2002 there were some early pioneers providing compliance services for schools with or seeking autonomy. In some cases Heads here were prepared to pay for external support even when they had to continue paying for the centralised services - a sign that the tide was changing. Brands such as CEFM, EPM and Strictly Education have a long pedigree here and while it took the 2010 changes for their full potential to be realised, they were pioneering the GRC support services for over a decade before then. A large number of regulatory consultancies (specialists in HR and safety for SMEs) support schools with compliance, and one has now bet the shop on the sector to deliver genuinely innovative packages, namely Judicium Education. They are bringing the packaged pricing approach to the sector alongside a growing list of specialist HR and safety teams. From a more finance background, teams like SBS (School Business Services) are similarly doing well, capitalising on the rise of the school business manager profession as much as the growth in autonomy overall.
Even in some of the traditional law firm specialisms there are good alternatives now. B3Sixty is a team of dispute resolution specialists in education, and teams like Premier New Schools and Place Group came through the BSF initiatives to offer project and procurement specialisms. Publishers like Croner may have moved on, but The Key team are filling the gap admirably.
HR and payroll teams are plentiful from Dataplan to Strictly, and from ECC to the Schools HR Co-operative. New teams such as Enlightened HR, Educate HR and SIPS Education bring fresh energy and ideas, and insurance led teams like Schools Advisory Service have innovative packages too. Meanwhile the full service teams coming out of LEAs include 3BM (London Boroughs), EES (Essex), HFL (Herts), NPW (Newham), One Education (Manchester), Pact HR (Bradford), SPS (Kent) and Schools HR (Wiltshire) bring the full LEA range to neighbouring areas too.
There are technology specialists aplenty too, and what could have been an enterprise sector dominated by the large payroll bands has again been claimed much more effectively by innovative entrepreneurs. School management information system specialists are well represented and some such as Engage migrate into compliance support well. Frontline SLA offer comprehensive support to the hard pressed LEA teams considering a traded services future, and from an asset management background Every are offering a full suite of support for schools in managing contracts, compliance and help desks.
Law firms can and are staking their claim to some of this new suite of services. SAS Daniels are one such; Winckworth Sherwood actively partner with many of the above, and Stone King are developing their own suites on the back of advisory support to NASBM and FASNA membership. Teams like Browne Jacobson are very active with affinity groups; a channel dominated by law firms overall, while in the main GRC teams go direct.
A Market Watershed
We are at a watershed. Soon over half of the schools in the country will be genuinely autonomous in compliance purchasing. School business managers and professional procurement disciplines are well established and tackling legal services as much as the other categories of spend now. While law firms collectively can make £155m pa in terms of support services in education generally, the core repeat business within this (ie excluding one off major projects) is some £58m. The power of GRC suppliers is already £96m and rising. School leaders are voting with their feet. They prefer the solutions which build fences at the top of the cliffs to equipping ambulances at the bottom at the rate of 3:1 now.
Strictly Education-Bond International Software
A successful part of the Bond International group of software companies, formerly known as Gowi, they focus on school compliance issues under the Strictly Education brand with a solid range of sector specific services.
The Education BDM Toolkit
Head teachers, school business managers and bursars are facing a bewildering range of legal, governance and compliance risks.
Law firms, software houses, HR consultancies and regulatory specialists all offer credible support.
Many claim a specialism in Education law or compliance services, but this is now a specialist market sector where genuine focus and specialisation is essential.
The NED Business Development Toolkit looks in detail at how law firms and GRC consultancies address this market. Historically law firms have dominated, but competition from GRC consultancies has changed the face of the market. The legal services revolution is as present here as elsewhere; possibly more so. You can see why, here. Law firms are also fighting back well; and again, you can see how, here.
The NED Toolkit is designed to help you take action. The Toolkit identifies the key channels, opportunities for action now and go-to-market channels and tactics.
The majority of procurement frameworks are coming up for revision in 2017 and they are listed here. Don't miss out here as failing to address these procurement frameworks can lock you out of key decisions for years.
The Institutes and affinity groups and who they currently partner with are explored in detail. These key referral channels are influential and hotly contested. See how and with whom here.
The brand and market positioning of every supplier is explored in depth. See how the suppliers in both law firms and GRC consulting services compare head to head here. Benchmarks and actionable metrics are shown and marketing lessons set out for each of the following types of firm:
The Top Rated Brands (the only ranking to show law firms and other legal services teams head to head);
The Biggest Brands (the firms no-one gets sacked for using);
The Largest Specialist Teams (not always the biggest firms but those with most skin in the game);
The Premium Players (when only the reassuringly expensive will do);
The Value For Money teams (delivering more from less);
The Best Law Firms, and Best Boutiques are also highlighted with key marketing lessons highlighted.
This Toolkit will ensure your marketing to this sector is top notch, evidence based and fit for purpose in tackling the future. 2017 will be a pivotal year in Education compliance. Ensure you have the facts at your finger tips; start here.
Price: £500 |
File Type: PDF |
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