Family Fortunes

Stowe Family Law is a firm with big ambitions. With 31 offices already and further expansion planned throughout England and Wales, it is unashamedly seeking to be the leading provider of family law services in the UK. The firm takes its name from family law superstar Marilyn Stowe, who founded the practice in 1982. From humble beginnings – her first office was in a converted cobbler’s shop in Leeds – she grew the firm to a 30-solicitor team, before selling it to private equity house Livingbridge for more than £10m in 2017. That private equity ownership proved a magnet to Ken Fowlie, who joined Stowe Family Law (Stowe) as chairman and chief executive officer (CEO) 18 months ago. Having spent more than 20 years at Slater & Gordon (S&G) – which listed on the Australian stock exchange in 2007 and, in 2017, became backed by a distressed asset hedge fund - Fowlie is more comfortable than most when it comes to external law firm investment. “I’m interested in and open to different ownership structures to support legal services,” he says. Back in the 1990s, as a fresh-faced young Aussie lawyer, Fowlie made his name acting for victims of asbestos-related diseases. He was heavily involved in class actions as that part of the market was first taking off; and in the mid-2000s, he was an early adopter of another trend: the use of litigation funding. “Serving the individual in a way that is innovative and creative – that’s what’s motivated me for a large part of my career”, remarks Fowlie. “Working to deliver legal services in an innovative way, that meets the needs of ordinary folks”. When Fowlie left S&G, where he had risen through the ranks to become managing director from January 2018 to January 2019, he saw Stowe as a chance to “continue that journey of working with people who are trying to help individuals solve legal problems”. He adds: “I had led and managed family law teams at S&G and seen the possibilities. I always thought there might be an opportunity to think differently about how we deliver legal services to people at a vulnerable point in their lives, in a way that’s effective and that people can afford.”

BIGGER AND BETTER

Technology inevitably plays a big part in Stowe’s business strategy; but so does rapid expansion and a physical presence at the heart of local communities. That’s why the firm has opened 21 new offices since Livingbridge took over; and recruited 117 new members of staff. But in stark contrast to the aggressive acquisition strategy of S&G – which culminated in the ill-fated purchase of law firm and claims processing business Quindell in 2015 – Stowe’s growth strategy has been different. The firm has opted entirely for organic growth, rather than hoovering up existing firms. “Organic growth is hard,” admits Fowlie, “but we think it provides the best opportunities for people within the organisation. We are attracting really talented people to the firm.” The financial firepower for this accelerated growth is clearly one of the benefits of being owned by a private equity house.

But how does the relationship work? “People are often interested in what the impact of… capital injection is. But there’s more mystery surrounding it than there should be,” the lawyer insists. “Livingbridge’s strategy is essentially to see an idea, and a team of people who are committed to it, and to support it.” Fowlie explains that Stowe’s management team approached the private equity house and was able to demonstrate how the firm had expanded under Marilyn Stowe. It convinced the investors that with more financial support, they could accelerate and expand their strategy, broadening the firm’s reach and offering services across the UK. “This is a firm that’s run by its management team,” stresses Fowlie. “For want of a better expression, there’s a lot of ‘fake news’ about what it means to be owned by a private equity firm.

The management team bring forward the plan and strategy for the firm and implement it. “But Livingbridge do not just provide financial support; they also bring their expertise. They are represented on our [top] holdings board. They support the management team with constructive challenge and bring their expertise to the table. “Working with private equity is actually a real positive because you do get the benefit of that experience, and access to their resources. For example, they can offer decades of experience with specialist teams in recruitment, marketing, or M&A [mergers and acquisitions]. We interact with them formally, and also informally on particular issues. But it’s led by the management team; as hopefully any good firm is.” But does this mean the private equity house never says ‘no’ to a management plan? “I’m not saying that everything the management team wants to do is enthusiastically embraced.

But it’s more a case of them bringing their expertise [to decisions]. It’s a collaboration rather than an antagonistic relationship. We are all aligned in wanting the organisation to succeed, by delivering outstanding services to our clients. We’ll achieve that by being a brilliant place to work, and providing a service that is something that the community wants,” Fowlie asserts. Any private equity house will usually have a timeline in mind for its investment. But Fowlie insists that this is “not the main focus of our conversations”. He adds: “Rather than a defined period of time, when we have delivered on these plans, that will be a logical point at which to think about what the next phase is… that will open up a range of other options for us. But it’s a long way off –there’s so much more for us to do. I’m focused on the next three years.”

VIRAL LOAD

This has not been a year for sticking rigidly to business plans, however, with covid-19 tearing up even the most carefully crafted strategies of every law firm in the country. Stowe was no exception. “At the outset, we saw demand fall precipitously in March,” Fowlie recalls. “It was a very uncertain time for all law firms. We did need to furlough some fee-earning colleagues and support staff. And we also asked people to make a salary sacrifice, to make sure we had the cash resilience.” Fowlie declines to reveal the precise percentages, but the salary sacrifice was shared “across the board”, with the exception of the lowest paid members of staff who were not asked to participate. The directors gave up a larger percentage than other staff. By June, however, the salary sacrifice was brought to an end, and in July the firm started bringing people back from furlough. “By the end of the summer, all hands were back on deck and we started recruiting more staff again. So the measures were quickly reversed. We brought it to an end as fast as we could, and we’ve now added to the workforce,” smiles Fowlie. Stowe had invested in the Proclaim online case management system in 2017-18; it had a cloud-based telephone system and had also invested in a video conferencing platform before the pandemic struck.

Funnily enough, this ended up getting a lot of use. “We hadn’t put that in place in anticipation of the whole workforce working remotely in March, so it was under a lot of strain,” admits Fowlie. “But it did prove resilient”. Some areas of the law are clearly better suited to remote working than others – particularly when it comes to interacting with clients. “In family law, people generally prefer to engage face-to-face, as the issues are often inherently personal, and sometimes quite intimate,” explains Fowlie. “But what’s interesting is that people do adjust and make allowances. We’ve been able to continue to practice and deal with challenging situations, even without having as much face-to-face contact with clients as we would like. But it has added another layer of complexity to things”. It’s not just the clients who have been affected by the pandemic, the lawyers have too.

And no two lawyers will have had exactly the same challenges – with different homeworking environments, caring responsibilities and social interaction within households. “People have had very individual experiences”, comments Fowlie, “and it can be hard to get visibility around that.” This was helped by the firm’s highly “distributive” leadership structure, with 16 regional managing partners who have relatively small teams. “There’s been a lot of effort by our people leaders in trying to listen and respond to the challenges they are hearing about, for example, by providing resources that people don’t have, and making sure that people feel encouraged to raise their concerns.” Stowe had invested in agile working technology ahead of the pandemic because, like many other firms, it had recognised that lawyers were increasingly seeking flexibility in the way they work. “In many ways, the pandemic accelerates existing trends,” observes Fowlie. “We have recognised that desire for greater flexibility and control over how lawyers work, and we wanted to be able to support a ‘work from anywhere’ culture. We viewed that as our destination, but we were only in the early stages.”

OFFICE POLITICS

The rise of remote working now poses other questions for law firm businesses – particularly when it comes to their use of physical office space. Stowe has an extensive network of offices in generally more affluent cities and towns across the country, including Harrogate, Chester, Wilmslow, St Albans, Tunbridge Wells and Winchester. But are all these physical premises still needed? Fowlie is convinced that having a client-facing office in the heart of local communities is just as important now as before the pandemic – if not more so. “We still see in clients a desire to be supported by a local provider – lockdown hasn’t changed that”, he asserts.

But he acknowledges that the way that firms use office space, and the type of space they need, could change dramatically. “Until now, we’ve tended to see the office as something that has got to equally service the needs of clients and colleagues in the same space. But after the pandemic, we can now see that how we use space can be tailored to different needs,” he suggests. So there might be a need for a client-friendly, town centre office that also provides space for lawyers to work in on occasion; but also the occasional use of bigger venues with facilities for meetings and team-building exercises. “You don’t necessarily need to take out long leases. You can use other providers, and there will be more options in terms of how we interact with landlords,” he adds. Having held key leadership roles at S&G before joining Stowe, Fowlie has learnt the hard way that managing a law firm is not always a straightforward task. What have his past experiences taught him about the skills needed to be a good law firm manager? “The experience of S&G in the UK is reasonably well-known,” states Fowlie. “I was there at some key moments.

What that taught me was the importance of being yourself, being authentic and communicating authentically. And also, in any leadership role, it’s important to be personally resilient. I learnt it was important to try and be my best self as often as I could, and that would help me to lead effectively and make better decisions. Resilience is especially important in an environment like professional services, which can be tough at times.” And he adds: “It’s important to have a really clear direction of travel – where are we going? – and to be a consistent and effective communicator.” But the tastiest nut to crack is learning how to get the best out of the wealth of talent around you. “Law firms are people-based organisations populated by very smart, capable people,” Fowlie points out. “You need to create those feedback loops, so that the firm is always benefiting from the collective wisdom. Then your strategy can be shaped by the collective intelligence.”