Blowing up the model
Adopt the spirit of a pioneer to explore what new trajectories your business could take, says Michael Burne, founder at Carbon Law Partners
When a model is bust, don’t tinker with it, says Michael Burne. Blow it up and start again. It might take you some time, but you will have a foundation to grow a culture that will make you different.
In his case, he came to the conclusion that the practice of law is breaking. ‘It doesn't work for lawyers and it doesn't work for clients anymore. Many firms are struggling to keep pace with technology and to find people to buy into the equity to succeed those that wish to retire.’
‘So I resolved to start from a blank sheet of paper and think about the model that might best create the right culture but have a fairness in the reward mechanisms that isn't present in more traditional practices.’
To the horror of his father, he had quit his job as a solicitor in one of the firms in the magic circle, but did fulfil his promise of becoming a chief executive by the age of 40. However, the financial services business that he was leading didn’t float as intended.
Instead, he put together a plan to raise £10 million to create a new type of legal practice, which was foiled by the financial crash. By 2014, however, he was ready to launch Carbon Law Partners, named after the organic creativity of the sixth element in the periodic table.
‘We start with our mission,’ he says. ‘To create and develop the conditions for exceptional people to flourish. We want you to be you. We want you to stand out, not fit in. It Is the act of coming together, human to human, to create the right environment, whether as a lawyer, as a supplier or as a customer.’
‘We are not linear and functional here in the traditional sense. When it comes to challenges like AI, which others might struggle to afford, we are more organic, so we can work collaboratively with other people.’
As well as talent, he looks for seven qualities in recruits: passion for learning, entrepreneurial spirit, commercial acumen, trust in collaboration, delivery of results, customer focus and high standards. ‘It’s a synthesis of them as humans,’ he says. ‘We don’t judge 7Q one by one as competencies. We do it through conversations. If we can’t feel the 7Q in them, we’ll say no.’
Culturally, it’s designed as the antithesis of law firms as machines for recycling equity that operate a model that channels a third of revenue to overheads, a third to wages and a third to partners. Burne has turned this upside down, learning from his experience in financial services.
At Carbon, 70 percent goes to the fee earner and 30 percent covers the costs. As a proposition, it suits many lawyers looking to break free as self-employed consultants. As Carbon grows and absorbs more legal practices, it is developing a 50/50 model, where employment can be offered with fairer reward structures and a great culture to boot.
By 2020, Carbon was billing £1 million a year. As a tech-enabled practice based in the cloud, it came into its own during lockdown and revenues are now up towards £10 million.
Where does Burne seeing it go next? ‘I want it to grow as large as the culture allows and find tomorrow’s custodians who will honour what the business stands for. We are pioneers here who have disrupted our profession. We want to stay open to ideas that can take us off on new trajectories.’
