Firms face £20,000 bill to join property network

FIRMS will be asked to invest up to £20,000 if they want to join a national network of solicitors' property centres.

The prospects of a national network of centres getting off the ground received a boost last week when two rival property centre groups – Solicitors Property Centres (SPC) Limited, headed by Conquest Legal Marketing's Richard Berenson, and the Solicitor Property Centres Network, headed by Law Society council member Anthony Bogan – announced a tentative agreement to join forces.

The new group, which will retain the title Solicitors Property Centres, will be chaired by Pannone & Partners senior partner Rodger Pannone, and will work on a two-tier level.

Under the scheme, firms will first be asked to buy a £750 share in the national organisation, although another option being considered is offering two £375 shares. When the share offer closes on 31 August, Berenson is hopeful that 500 firms will have taken a share, with the capital raised being put towards funding marketing, research, the directors and IT.

The firms that have signed up will be separated into formal regional groupings. They will then be presented with a detailed business plan outlining how to establish a property centre in their area.

A typical provincial property centre will face start-up costs of £200,000, half of which will be raised by a bank loan.

Law firms will then have to put into the centres “not less that £10,000 and not more than £20,000”, although Berenson believes tax relief and eventual dividends from the property centres should ensure firms do not face negative cash flow.

It is envisaged a minimum of four firms will be needed to set up a property centre.

Wholly owned by the local solicitors, the centres will pay a franchise fee to the national organisation as part of a nation-wide branding exercise.

All centres will be inter-linked and will use software to enable properties to be accessed at any time and at any place, so that buyers will be able look for a house in Manchester from London.

Although both the local and national arms of SPC Ltd will be fully owned by solicitors, the plan still has to get the approval of the Solicitors Property Group.