Brief encounter: bates wells & braithwaite

Bates Wells & Braithwaite is a firm with just 100 staff. It has a host of familiar names among its clients, and most of them are charities. Its profits, though respectable, are nowhere near the same as could be gleaned from commercial clients of the same pedigree.

With up to half of its income coming from charities, the firm is in no position to turn its back on the sector which has become synonymous with the firm's reputation. And neither, it seems, would it want to.

Yes, it is a commercial practice, and yes, its ultimate aim, like all businesses, is to make a profit. But charities are especially price sensitive, and the firms that do business with them have to accept what is known as a "charities tax", which effectively means that in addition to the usual lower charges, the lawyers are encouraged to do a large amount of pro bono work in areas of personal interest. While seemingly selfless, this has the knock-on effect of attracting more work.

The arrival of high-profile media and arts lawyer Sean Egan, however, marks a new departure in its charities work. The former partner at Harbottle & Lewis was brought in to develop a niche arts practice in the firm and brought with him a host of theatre work. Clients in the area now include the Hampstead Theatre, Wordsworth Trust Museum, British Council and the Tate Gallery. Bates Wells has highlighted this arts work as a preferred potential growth area, and if its forecasts are correct, it should bring in a wide range of work covering constitutional issues, funding arrangements, copyright and employment issues.

It is the next step for a firm that has doubled in size in the last few years and which has painstakingly built up a reputation in its field, holding lectures and training sessions and writing on the subject of charities law. Head of charities Stephen Lloyd says he gets the vast majority of the work through personal recommendations, and that is the way he likes it.

The firm is undoubtedly driven by its charities department, but it is not its only area of work. It also has busy family and commercial departments as well as a relatively large immigration department, which handles a mixture of high-net-worth individuals and Green Form, legal aid and political asylum work. But its charity clients, including British Red Cross, Save the Children Fund, Action Aid and Charities Aids Foundation, must remain its focus if it is to maintain its status within a niche industry.

But life is no bed of roses working at Bates Wells - with a limited budget, something inevitably has to give. In the main, it is the partners who have to accept lower profits, although admittedly most claim that they are happy to accept this for working in a less stressful environment. But its facilities, too, are somewhat lacking in comparison with other City firms - it has basic IT facilities which are nowhere near as sophisticated as a higher profit margin would allow. Ultimately, it is a trade-off to attract charities work, which can only be attracted by the right price.