Comfort in numbers: is there any point in joining a franchise?

With competition hotting up in the legal sector, firms are looking for comfort in numbers, writes Elizabeth Davidson. The options available include joining a franchise like face2face or QualitySolicitors, a network like highstreetlawyer or a marketing venture like lawyers2u. (Pic: Amanda Holden at the launch of QualitySolicitors’ legal access points – the idea is to have 500 such LAPs in WHSmiths stores). This is the first of a two-part article.

Individual firms will want to investigate the benefits and drawbacks before jumping in. How useful is this route for firms that do legal aid work? How do these networks and franchises deal with members who do publicly funded work?

In the pink
Franchising group, Face2face, launched in September 2011 and has two firms on its books plus more ‘in the pipeline’ – but none of these are legal aid. Martin Wyatt, marketing director, says the group’s policy is not to work with legal aid firms although it would be interested in former legal aid solicitors interested in starting afresh.

The franchise offers its members what is essentially a ready-made business, branded under the name of face2face. Members are given mentoring, training, an IT infrastructure and a centrally-organised compliance system.

QualitySolicitors, on the other hand, says a quarter of its members offer legal aid. QS offers its members its distinctive fuscia-pink branding, and the chance to be part of its central marketing campaign, which includes TV adverts. A spokesperson said: ‘We certainly would encourage member firms to market the fact that they do legal aid, alongside all of the other private work that they undertake. Legal aid provision can be hard to come by and is an essential tool for the most vulnerable of society. These individuals may not always need legal aid and, if circumstances ever change, they will remember those that helped them in their hour of need.

‘QualitySolicitors is working hard to develop alternative costing models and client packages which will allow many of those who currently qualify for legal aid to continue to instruct us after the cuts have been made.’

Highstreetlawyer is a network of independent law firms and offers members marketing services and extras such as discounts from preferred suppliers. It started recruiting firms earlier this year, has 12 members and aims to have 50 members by the end of this year.

Most of its members do commercial or private fee-paying work, and it passes any legal aid enquiries it receives on to someone more suitable (firms can not pay referral fees for publicly funded work).

However, managing director Gary Yantin says: ‘We would not preclude firms that do legal aid. We are looking for conveyancing, small commercial work, family, matrimonial, and our target areas at the moment are Manchester, Birmingham, Bristol, Leeds, northern Home Counties, St Albans, Watford.’

Yantin continues: ‘I think each firm has to identify for itself what suits it best. I can see three or four very strong networks emerging over the next few years in the market.

‘Firms need to become strong in one particular niche, for example, 24-hour delivery or online services. They can’t stand still and do nothing.’

Making a stand
Lawyers2u is a ‘Laspo-compliant national joint marketing venture’ expanding nationally from its Midlands base, according to its chief executive Guy Barnett, also managing partner at Birmingham firm, Blakemores.

It runs stands, or ‘law-hubs’, in places ‘with heavy footfall’ such as shopping centres, manned by three representatives seven days a week, offering free legal advice on any issue. The client’s details are taken by the representative and sent to a call centre staffed by paralegals who give an initial 15-minute consultation. Barnett says about 20-30 per cent of the work is converted into instructions and referred to Blakemores or other law firms on its panel.

It is currently working with ten firms outside the Midlands, who pay a monthly fee.

Barnett says the company handled just under 50,000 enquiries in 2011, and currently has 20 stands for Blakemores and 20 for other firms. He expects to have 60 stands by Christmas and 150 by the end of 2013.

‘We’re designed to be flexible, depending on what the firm wants – some take just one or two leads per month in a specialised area, while others are large firms taking hundreds of leads.’

Although Blakemores has a large legal aid practice, Barnett says he sees little point in firms marketing their legal aid services.

‘There is no benefit. I would market to get more work. I’m turning people away.

‘Legal aid firms don’t need to market for more legal aid work, they need to diversify their portfolio of services, and bring in fixed price options for clients who won’t get legal aid next year. They should be gearing their services around junior fee earners doing fixed price work and marketing those services. People will need to save up to pay for these services or find the money from somewhere else. Maybe insurers will enter the market more, for example, the Co-op could push a household insurance policy which includes legal insurance.’
Guy Barnett

Barnett recommends against any firm putting more than 20 per cent of its business in legal aid.

‘The government is cutting £350m for its legal aid budget, like it or lump it. We have a large immigration practice and do £1.6m a year of legal aid in this area. They are getting rid of immigration – luckily 90 per cent of what we do is asylum so we are not affected too badly. I’ve just spent £100,000 on a purpose-built centre – all that would have had to go.

‘Firms can’t nowadays afford to put all their eggs in one basket. You can’t just do legal aid work because your livelihood is dependent on the whim of a politician and their minds can change like the wind.’

Law firm management consultant Andrew Otterburn, of the Law Consultancy Network, says he expects more law firm networks to emerge in the next few years, but strikes a cautious note.

‘The basic concept of networking is very good, there is a lot to be said for firms, particularly publicly funded firms, which tend to be quite small, having associations with other like-minded firms, and pooling their ideas and so forth.’

Otterburn says: ‘However, I would be a bit sceptical and advise caution before joining one of the big networks such as QualitySolicitors. They can be useful but if you are going to join one you should make sure you are a part-owner of it so that you have influence over the direction it takes and the image it projects on the market. I would be careful about giving up your brand for someone else’s brand, which might target a different market than the one that is suitable for you. You should make sure you don’t pay other people to build up their brand.’

 

 

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