Critical Mass
The founder of dispersed firm Nexa Law, Eliot Hibbert, explains why he pursued the consultancy model and what’s next for the growing enterprise
As with many good business ideas, Nexa Law was born on a golf course. It was a couple of years after the Legal Services Act came into force (2014 for those of you in doubt) and corporate lawyer Eliot Hibbert was at Oswestry Golf Club with his client, entrepreneur John Roberts. The pair had been chewing the fat about various law firm models as one of Roberts’ ventures was a consultancy-based business that he had managed to scale successfully. Hibbert could see how it might work in law – a few early movers were already doing it, Keystone Law and Gunnercooke for example. Like many lawyers of his generation, Hibbert was starting to tire of the repetitive officebased nature of traditional law.
As a corporate lawyer, he would sometimes sit at his desk twiddling his thumbs during a post-transaction lull and feel like he was just warming the seat – there was little work to do, but he was contractually obliged to be present. “I didn’t like the office politics and I never got much out of ‘the water cooler’ moments – you know, some people like being in the office, and like talking”, he recalls grimly. In 2016 he and Roberts decided to take the plunge and established their own firm, Nexa Law – a dispersed firm aiming to major on corporate work. Hibbert would be its first fee-earner; his wife Victoria, also a lawyer, would be the practice manager; and Roberts put up 26 per cent of the investment needed to launch. Other investors included Hibbert himself, at 20 per cent, 8 per cent from another of Hibbert’s clients, the founder of a recruitment company, John McCauley and a further 26 per cent from an unnamed member of the legal profession. Latterly, the founder of Peregrine Law Nigel Clarke has taken a 20 per cent share after Nexa acquired his firm last month. “At that time, there were a couple [of dispersed firms] coming into the market and it was becoming more, not more commonplace, but you were beginning to hear a bit of buzz about it”, Hibbert remembers. The firm took around 18 months to build up a head of steam, slower than Hibbert expected it to be. “We had quite a quiet 18 months and then a sort of manic subsequent 18 months”, he says, “and now there’s no sign of it slowing”. The ambition is for the firm to have 100 consultants by the end of this year, with a lot of that recruitment focused on London.
The Peregrine acquisition has taken it up to 38 to date but Hibbert says it has a lot of momentum and with Clarke focused entirely on recruitment, he’s confident it can be done. “We’re getting regular enquiries now. It becomes easier the more you’ve got. We try to keep quite a lot of content flowing through LinkedIn and on our website, particularly when new people join”, he explains. “It also helps when you get good people. We had a couple of good wins fairly early on; an aviation barrister from Ashfords joined and we had the head of litigation at Lupton Fawcett join, then somebody from Foot Anstey.
Once you get that quality of people, you get more traction and viability. Before that people look at you and think ‘I don’t know who they are’ – it’s a hard task but it does get easier as you go on.” TALENT SEARCH While there are a number of dispersed firms for would-be consultant lawyers to choose from, Hibbert likes to think that Nexa has something unique to offer. “I’m very much of the view that there’s a spectrum of all the new model law firms. They all operate slightly differently, and they’ve all got their niche. For example, I always think of Keystone as very much London-centric with older partners”, he says. However, Nexa’s major selling point to its consultants is the percentages they receive. They get 75 per cent of the fee for work they generate themselves, 70 per cent for work referred to them by the firm, 65 per cent for work referred to them by another client and 12.5 per cent if they make a referral. The firm also offers consultants 5 per cent of everything billed by a consultant they recruit to the firm for as long as that person is working there. Importantly, there is also no cost to join and no minimum billing requirement, although lawyers must be eight-years qualified and able to generate their own workload. Hibbert says the original aim in having the 5 per cent incentive for successful recruitment was that the existing pool would “selfgenerate”, however he admits it’s mainly his own marketing efforts that brings in new consultants to date. “We have one particular consultant who’s really good at marketing, and he’s taken it a bit by the horns to try and get some lawyers onboard because he sees the benefits of the referral fee”, Hibbert says. “But lawyers being lawyers, a lot of them don’t think about it”. They do think about the cultural benefits of being in a dispersed firm though. As one of the newest recruits Femi Ogunshakin said in recent feedback to the management team, Nexa is a way to “get away from the politics, stress and demands of working for a traditional firm”.
Another, Ilesh Chandarana, said: “Nexa Law provides the ideal infrastructure to work effectively as a solicitor by enabling me to work independently, seamlessly and without bureaucratic distraction to get the successful results that our clients deserve”. Hibbert believes the alternative model is as beneficial for clients as it is for the consultants. By stripping out the overheads – there were no premises until this year, but Peregrine Law has space in a flexible office complex in Waterloo – the fees are cheaper. Hibbert also believes the service is better. “The clients deal with the lawyer, they don’t deal with a legal assistant or a newlyqualified, they’re dealing with someone that’s eight years PQE”, he says. “They’re getting one-on-one attention and they’re getting a better price because we stripped away a lot of the overheads, so we haven’t got the big national offices all-round the country, we haven’t got partners’ cars to pay for, things like that”. He says because a lot of the firm’s work comes from longstanding clients of the individual consultants, the lawyers have close relationships with them too. “The credit control takes care of itself because the lawyers want to get paid and they want to maintain good relations, so it means the clients tend to pay quicker”, he says. While the firm started out aiming to major on corporate work, as more consultants came on board so did more practice areas.
The firm is now a pretty broad church of disciplines, with specialists in food and drink, catastrophic injury, debt recovery, personal injury, private client and property, although Hibbert’s ambition remains to grow the corporate capabilities of the firm in the City.
INFRASTRUCTURE
Tech has been key to making Nexa as frictionless as possible for both the consultants and the clients. Hibbert claims to have received no complaints at all since the firm was established three years ago.
The firm’s IT support is provided by Concise, a tech company in Northwich, which the consultants have a direct line into if they need it. They also all have access to a VOIP phone service so they can make free calls via the internet. Hibbert swears by Leap, the firm’s case management system, which he concedes is expensive but pays for itself in increased efficiencies. “You’ve got apps, you can have it on your laptop, it’s really modern and up to date and it really does help if you need to work on a train, or in a coffee shop or anything”, he enthuses. He says when he was setting up Nexa part of the inspiration was work he’d done for a mortgage company that worked on a consultancy basis. “The best consultant they had there lived in Tenerife. He worked six to 12 and then went to the beach for the rest of the day”, Hibbert says. “So what I thought was that if you got the technology right and made it that anybody could work anywhere in the world, then it’s a winning formula.” That said, few of Nexa’s consultants are currently based overseas. There are three from Peregrine who work out of Israel, Switzerland and France respectively, but Hibbert sees the potential for the future and is even considering moving to the 24/7 service from Concise to iron out any issues with time zones.
More than the lifestyle impacts though, Hibbert believes the right IT set up is the key to the model’s success. “We don’t want lawyers to be on the phone complaining that the IT isn’t working properly, we want them to be able to work seamlessly around the world”, he says. He says the firm is “strict” on compliance, and IT helps there too. “We’re very security conscious so we do things like encrypt the laptops. We have our IT set up in a way whereby if a consultant lost their laptop, it can be shut down immediately and recreated straight away.” Moreover, external suppliers and outsourcing helps to keep things streamlined and reduce staff overheads. “We don’t need to take on loads of employees because then you just slip back into being a traditional law firm”, he explains.
PEREGRINE LAW
The appetite to be different was also a motivating force in Nexa’s recent acquisition of London corporate firm Peregrine Law in early February. The deal saw Nexa take on the firm’s founders, Nigel Clark and Ben Walmsley, as well as their 12-strong team. Linklater’s-trained Clarke has joined Nexa’s board and moved away from feeearning to focus on recruitment. “He was the managing partner of Minter Ellison’s Sydney office”, Hibbert says. “So he’s got a really good focus to go into the London market and persuade people that they’re better off being with us than in the traditional partnership.” Hibbert says he’d known Clarke for several years before doing the deal. They would meet and discuss the market regularly and gradually Clarke became drawn to the idea of legal disruption. “He wanted to be involved with a new model law firm and he liked the fit”, Hibbert explains.
He says the acquisition was less about adding numbers and more about the geographic strategy. He wants to see more consultants in London and to start seriously competing for corporate work against firms just below the top 50. “We’re not trying to compete with the magic circle boys but I don’t see why we can’t compete below that level”, he says. “That was what Peregrine was set up to do really, provide City services at a better cost”.
