Beyond competitors: Partnering with another legal services provider

Key takeaway points:

1. A strategic alliance needs to offer corporate clients a unique proposition that answers their need for something different

2. When choosing a firm to partner with, ensure you have a shared vision about fixed fees, legal services outsourcing and management information

3. Ensure this vision is shared by everyone within your firms

 

Since we announced the strategic alliance between DMH Stallard and Riverview Law, there has ?been a lot of interest in it from all parts of the UK legal market. The Times described it as “a prime example of British legal services starting to adapt to the market”. But, why did we do it and what are we going to do with the alliance now that it has been formed?

The answer to those questions starts with the changing legal market. Everyone agrees that it is now changing very quickly. That change isn’t being driven by new entrants, as many believe, but by a shift in supply and demand. There are too many lawyers and too many law firms for the work available and, because of this, clients have greater control over how their legal services are delivered and how much they will pay for those services. This fundamental change has meant most ?law firms are under increasing pressure to find new sustainable models for the profitable delivery of legal services in this new environment.

It is against this background that new entrants have entered the market. Most new entrants have focused on the retail and volume personal injury market – business to consumer (B2C). This is almost certainly because the B2C market is very fragmented. Some new entrants already control or have access to distribution channels that allow them to originate large numbers of clients relatively quickly and cheaply, and that is their route into this market. Others in the B2C space are building a brand to attract consumers away from traditional law firms.

DMH Stallard’s market is essentially business clients. We were intrigued when we saw Riverview Law launch in February 2012 following a clever six-month PR campaign, as it was the only new entrant focused on the business to business (B2B) sector at that time.

A striking feature of Riverview Law is that it was founded by entrepreneurs – Karl Chapman and Adam Shutkever. Entrepreneurs don’t think like lawyers. They don’t carry the baggage that law firms do when it comes to running a business and they have the luxury of being able to start with a blank sheet of paper when considering how to deliver legal services into a changing market. That is what made Riverview particularly interesting to us.

These factors also made it very interesting to businesses that wanted something different compared with their existing law firm providers. Riverview Law was seen to be different right from the beginning, as evidenced by its fixed-fee proposition for all work, whether it be a one-off assignment or an annual or multi-year contract. As a result, it quickly attracted work from companies of all sizes.

Journey of transformation

DMH Stallard is a mid-market law firm based in London and the South East. We act for large companies, often FTSE 100 companies or equivalent, where we expect to do a large chunk of what they would regard as their predictable and routine legal work. That doesn’t mean it is simple, but it is work that needs to be done regularly and frequently throughout the year.

We also act for SMEs, ideally fast-growing businesses that have a high demand for legal services. We generally deal with all of their legal work, some of which will be predictable and some of which will be one-off assignments. In addition, we work for private individuals, but they often tend to be the owners and directors of the corporate clients that we act for. This is particularly true of SME clients, where their personal and business lives are often blurred.

We have been on a journey for the past ten years, transforming ourselves from a traditional law firm into a modern business that provides legal services to clients and aligns its offering with their needs. Our focus is on efficiency and the power of management information to reduce the cost of legal services to clients. However, our difficulty, as a mid-sized law firm, is getting our message across to more companies in what is a very fragmented market. Indeed, one of the paradoxes of the legal market is that buyers see all law firms as the same, whereas all law firms believe that they ?are different. For those of us who are different, this poses something of ?a problem.

Signing the strategic alliance with Riverview Law and joining forces with a new entrant run by entrepreneurs was the natural next step on our journey of transformation. The alliance gives us access to different ways of delivering ?legal services and something new to ?offer. It also evidences the fact that we really are different from other law firms.

As Riverview was started by entrepreneurs, rather than lawyers, it invests in sales and branding, as most other fast-growth businesses would do. This is intrinsically different from the way most law firms organise themselves. The alliance therefore also gives us access to a sophisticated sales and branding operation, which is critical in this fast-changing market.

Riverview had different but complementary reasons for entering into the alliance. After its launch, it attracted significantly more interest from businesses than it had anticipated and won more traditional ‘event’ work (one-off assignments) than it had ever expected.

It became clear that Riverview needed a law firm with a delivery capability that could support its customers. It spoke with several law firms before DMH Stallard but, in each case, they didn’t really get the value proposition – even if the managing partner got it, many of the partners didn’t understand it.

Riverview’s CEO Karl Chapman and I initially connected on Twitter and I suggested a meeting. When we met and started talking to each other, we rapidly realised that we had exactly the same approach to the legal market, the same approach to clients and the same approach to running a legal business. We spoke the same language and, as I said to Karl, it was like meeting an old friend.

We had each, of course, started our journeys from very different points. DMH Stallard had started as a traditional law firm that wanted to change, as we didn’t believe the old way of doing things was going to be sustainable in the long term. Riverview started from the point of view of entrepreneurs who believed that legal services could be delivered in a different way that created more certainty for customers and was much more customer-friendly. Both of us had arrived at the ?same conclusion, and our shared vision was critical to our mutual decision to ?enter into the alliance.

Value proposition

Working together, DMH Stallard and Riverview Law now provide a unique solution for clients who want their legal services delivered differently. That is the simple proposition behind the alliance. It is a proposition targeted at the business community, who want something different from their lawyers but haven’t yet been able to find it, or sometimes even define it.

It is already working. DMH Stallard and Riverview Law are already cooperating together and winning new work. We are doing this in three ways.

The first is a joint sales pipeline targeting FTSE 100 companies, or equivalents. Riverview is already working with FTSE 100 companies in their own right. With large companies, we expect to win multi-year legal advisory outsourcing contracts, where we take a large part of a company’s legal work and do it for one annual fixed fee. We are currently talking to several FTSE 100 companies about delivering their legal services through ?the alliance.

The second approach is focused on SMEs. Many law firms are finding it hard to rapidly increase their penetration of this market due to the cost of acquisition in a traditional law firm model. Riverview, however, has invested significantly in social media, which has driven many new enquires, as has its free library offering. Channel partners also provide access to a large number of SMEs.

All of these initiatives reduce the cost of acquisition significantly. Riverview is working with many SMEs already and DMH Stallard has been providing legal services to these clients in relation to corporate, litigation and property work.

The third channel is overseas. Riverview already has a New York office, which is aimed at attracting US work into the UK, principally litigation and M&A work. This will be a very big source of work in future and we have already seen some early wins.

DMH Stallard and Riverview are independent businesses and remain so. DMH Stallard will, therefore, continue to work with its existing clients as we do now, as will Riverview.

The real purpose of the alliance is to find new clients that we can both work for and new opportunities with existing clients. There may be occasions when DMH Stallard and Riverview could both do some of the work that we win together. If that’s the case, we will agree between us who is best to do it, in conjunction with the client.

There may also be occasions when we need to join forces with a global law firm on particular projects when we need specific additional skills. We will do that when necessary, provided that the firm supports the fixed-fee model and shared vision that are key to our alliance.

A perfect union

The legal market is changing very ?quickly. Clients want something different but they believe all law firms are the ?same. Riverview Law has a strong brand and sales operation, it is seen as very different to most traditional law firms ?and it has a proven delivery capability of its own.

DMH Stallard is strong on innovation and efficiency, is seen as entrepreneurial, and has an established delivery capability, particularly for more complex work. Both of us believe in fixed fees, certainty and the power of management information.

Put all those things together and it creates a perfect combination, a truly different option for the delivery of legal services that corporate clients are seeking but haven’t been able to find before now.

?Tim Aspinall is managing ?partner at DMH Stallard ?(www.dmhstallard.com)

---