Keeping clients on a single track
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16 December 2013
The internet is not the only place where a shopping revolution is taking place. Legal services are seeing a mini-revolution as firms launch one-stop shops.
Law firms are queuing up to broaden their services and provide a multidisciplinary approach. They are recruiting from other professions or forging links with firms of consultants to offer advice on everything the client needs to know about employment, international trade or e-commerce.
It seems that in the run-up to multidisciplinary partnerships (MDPs), lawyers are increasingly aware of the need to take a broad view of the service they should provide to clients and make sure their clients know it.
One-stop shops are not new. In the trademarks field, delivering the whole gamut of legal and business services under one roof is a well-established idea among lawyers.
Former Clifford Chance taxation partner David Reid left private practice to set up professional multidisciplinary practice New Bridge Street Consultants in 1984, offering legal, accountancy, actuarial and tax advice.
However, the trend for multidisciplinary advice currently unfolding among law firms represents a novel approach for lawyers.
Dibb Lupton Alsop is launching a one-stop shop human resources consultancy next month, and has recruited several high-profile consultants to advise clients on employment motivation, management change and employment relations (The Lawyer, 13 September).
Charles Russell announced plans along similar lines in July and is forming a partnership with a human resources firm to set up an employment consultancy later this year (The Lawyer, 26 July).
And last week Birmingham firm Wragge & Co formed what it called a "unique cooperative arrangement" with a firm of consultants to provide a one-stop shop offering legal and financial advice on international trade finance (The Lawyer, 13 September). Under this arrangement, the lawyers will refer work to the consultants and vice versa.
Field Fisher Waterhouse is setting up a similar operation called Incubator for entrepreneurs entering the e-commerce business, via a website linked to the firm's IT and online law group (The Lawyer, 6 September).
Supporters of one-stop shopping point to the benefits of all-round service for clients and claim the days of a firm providing pure legal advice are over. However, opponents label it a cynical marketing exercise which will erode professional objectivity.
McKenna & Co (now CMS Cameron McKenna) considered a similar initiative in pensions about 10 years ago, offering financial and legal advice, but rejected it, saying it would damage its independence as solicitors.
CMS Cameron McKenna partner in charge of employment, Simon Jeffreys, says: "If we are giving people legal advice and then we say, here's our friendly neighbourhood consultant, then our objectivity takes a dent. I would worry that our client would not view us as independent.
"We give legal advice, that's what we do best. If you're doing a mergers and acquisitions deal and you say 'come to us for everything' - corporate finance, legal advice and accountancy - are they all going to give as fiercely independent advice as they would have done?"
Jeffreys refuses to rule out the possibility that CMS Cameron McKenna might set up a similar initiative in the future, but he is sceptical about the motives behind current developments. He says: "The obvious reason for doing it is to make more money."
However, firms which have set up one-stop shops claim the trend is more an organic growth process than just a business opportunity.
Dibbs' partner in charge of human resources David Bradley says the firm's employment law practice is the "bedrock" of the consultancy. Last week he told The Lawyer he "always thought that a consultancy arm would allow us to offer the whole package to clients".
Charles Russell's partner in charge of employment David Green says the firm decided to launch its employment law training company after workshops in legal and human rights training.
Green says: "This is something we have all enjoyed doing, it gives us much broader experience and the client has got a lot out of it. The whole point of employment law is giving practical advice."
On the launch of the consultancy, Green says: "We intend to use this as a pilot scheme and, if it is successful, some of our other departments may follow suit. MDPs don't mean merging with an accountants, if these things fly then we might merge with other companies."
Field Fisher Waterhouse's partner in charge of the IT and online law department Michael Chissick says: "The reason we are doing this is that never in my career have I seen in an area of practice such an influx of new and exciting clients, and we are expanding heavily on the back of that."
Employment partner at Eversheds' Cardiff employment law practice Viv De-Feu predicts that more law firms will broaden their range of services.
Eversheds started employing human resources consultants five years ago, establishing a one-stop shop offering employment advice. Eversheds has three human resources consultants and is in the process of recruiting a fourth, who will be based in its Norwich office, and has five part-time associates.
According to De-Feu, these consultants frequently receive job offers from other law firms, showing a high level of interest among rival firms eager to copy the Eversheds' model.
De-Feu says: "It's all part and parcel of lawyers waking up to the fact that you have to provide a broad range of advice, in our case this was driven by a need to offer better advice. We know the client's needs best because we have advised them and we know the wrinkles. For the client the comfort factor is a real plus. Because we have provided them with good solid advice we have strong links with them."
De-Feu adds: "In employment law, all legal advice has to be tempered by best practice human resources advice, particularly in the area of harassment, bullying and email abuse."
But perhaps De-Feu hits on the real reason why firms want to broaden their approach when he explains further. "We are all paranoid about driving our clients into the arms of other professionals and that's one of the reasons we are doing this.
"There is always an insecurity that a client will go to another profession when they ask you to provide a service and you can't offer it .
"Clients will be looking to their lawyers and saying, 'well, you've given us advice this far, what can you do for us now?'"
Tax partner Colin Ives at accountants Smith & Williamson believes the process can be traced back to the fears and hopes surrounding MDPs.
"I see MDPs coming in at three levels. Global MDPs set up by magic circle firms, MDPs between high street firms and associated businesses, and the middle field where MDPs may work in industry-focused businesses where I think they will work best. It makes sense for a property law firm to set up with an architect.
"But there is a danger that you are limiting the scope of people you can deal with because of conflict of interest.
"I think law firms are changing now because of defensiveness and paranoia.
"If they don't do the work, it will go to someone else. This is fine, if the lawyer can say hand on heart that by referring X to Y the client is getting the best person for the job."
David Temporal, managing director of Temporal Management Consultants, says: "The reason is the growth imperative. I always liken a law firm to a shark, it has to keep moving or else it dies.
"A firm is always looking around for new areas in which to grow and to expand its client base, and this is an obvious area.
"At the end of the day clients want the firm which can provide the best service."
In an increasingly competitive marketplace, lawyers want to watch their backs. Broadening their range of services is one way of warding off rivals, be they accountants, human resources consultants or internet experts.