FIRM PROFILE: Underwoods

A bit of healthy introspection is Underwoods' path to expansion

“As Maria Callas was to opera, so Kerry Underwood is to conditional fees,” a lawyer once said of the senior partner at St Albans firm Underwoods. If that is the case, it may come as a shock to some in the profession that his pioneering firm recently took a policy decision to ditch conditional fees.

These funding issues are not merely of academic interest to the lawyer, they underpin his three-partner practice. “Our philosophy is to give the best technical service in terms of lawyers, allied with fantastic client care standards and all at an affordable price – which doesn't mean cheap – through innovative funding,” explains Underwood.

The Hertfordshire firm was set up in 1991 by the lawyer and now has three partners, six associates and three trainees. His co-partners are Robert Males, the firm's finance partner and a member of the Law Society's personal injury (PI) panel, and Marc Jones, head of employment. The workload is evenly split between employment and PI, which combined represents 80 per cent of the total work, with the rest divided between general civil litigation and non-contentious work (conveyancing, wills and probate).

Last year the firm's turnover was £1.5m, 15 per cent up on the previous year, and it is looking at a 20 per cent increase over the next year. The firm is planning to go into a period of relative growth over the next 12 months and aims to recruit four more staff. It intends to develop its pensions practice (“the really big issue over the next 20 years”), education law (“also going too be huge”) and straightforward commercial work.

Underwoods prides itself on being ahead of the rest of the profession and taking risks. For example, it was the first legal practice to run a full-scale advertising campaign on prime time television back in 1991, which cost £350,000. It was estimated in the region of 1.86 million viewers saw the ads. “Underwoods work harder to win because if we don't win we don't get paid,” ran the voiceover. As PI firms increasingly advertise on the television, Underwood is unconvinced that the benefits justify the huge cost.

Internally there are also differences with other firms- it is one of the few secretary-free law firms, for example. There is also an online 'file audit' of the fee-earners, so prospective clients can check the number of client calls returned on the same day and the number of appointments seen on time.

But it is the funding issues that the firm's founder comes back to as marking his practice out from the crowd. “They're hugely important to us, and our clients as well, but it remains something that's not picked up by a lot of small and medium-sized firms,” he says.

Now that the firm is no longer working on conditional fee arrangements, it is concentrating on performance-related work, menu pricing and fixed fees. As an indicator of how important this approach to the firm is, he reckons that 20 per cent of work comes from referrals from other law firms that are not interested in less traditional fee arrangements.

“Solicitors have fallen a long way behind what clients expect,” Underwood says. “The days when people say they should get the same win or lose, with the classical view that the law has no interest in the case, are over. Clients don't see it that way.” It is an observation that he believes is borne out by his firm's experience with lay clients; now he is aiming to build a stronger practice for commercial clients who want their lawyers to share the risk.

“We're in a position of flux at the moment where law firms and the Bar, by and large, are wanting to act in the same old way, and that's becoming increasingly unacceptable to clients,” he says.