On trust: Doing the right thing

One is a much-loved stalwart of the British high street famed for its blockbuster Christmas ads. The other is a five-lawyer employment law boutique based in Abingdon, Oxfordshire. 

What do they have in common? An employee ownership trust.

In February, Crossland Employment Solicitors became one of a small but growing number of law firms to have adopted the ownership model most famously used by department store giant John Lewis.

Crossland is run by Beverley Sunderland, a high-profile employment lawyer who regularly pops up in the national and local media, including on LBC radio and the BBC. In June last year, her firm broke the ‘furlough fraud’ story that one in three furloughed employees had been asked by employers to carry on working while on furlough.

The story was based on the firm’s survey of more than 2,000 employees and was quickly picked up newspapers and radio stations. “I was at home with wet hair when I got a call from a researcher on the Jeremy Vine show”, Sunderland recalls. With two lively border collies in the house, she decided to do the interview sitting in her car. “That was fine until it started raining” she jokes.

A winding road

How did Sunderland get to the point where she had created a thriving business that was ready to be transferred into a new ownership model? The firm was founded in 2008, but Sunderland’s career in the law began back in 1988, when she qualified as a solicitor and initially specialised in property law rather than employment.

Sunderland worked at Wedlake Bell for a while before joining national travel agency Going Places as an inhouse lawyer and property specialist. “In the early ‘90s, employment law didn’t really exist,” observes Sunderland. “If you wanted to get shot of someone, you just wrote them a cheque for £12,000 and that was it.” But that all changed with the arrival of the Employment Rights Act in 1996.

“At Going Places, I was the only inhouse lawyer for a company with thousands of shops around the country. Then this new employment law came in and we started receiving quite a few claims. I said to my boss, this area of law really interests me and I think it’s going to grow; can I recruit a property lawyer, and then I can focus on this employment area?”

Sunderland’s boss agreed to her suggestion. “So I bought books on this area of the law, and I really got to develop along with the law itself.”

What was it that so attracted her to employment as a specialism? “Employment law moves so much more quicky than normal litigation,” she enthuses. “You can have a hearing within six months, and it can be in the appeal court a month after that. That means there is constant case law coming through and you have to be on top of it. Every day is a school day.”

She disapproves of lawyers who don’t properly immerse themselves in the area, but still accept clients. “There’s nothing that makes the hairs stand up on the back of my neck as when someone says that they ‘dabble’ in employment law,” she frowns.

Crossland acts primarily for HR departments, but also for some employees, “because it’s important to be able to see both sides and understand how the other side will argue things”.

“I like to guide my clients towards being fair,” Sunderland remarks. “As employment lawyers, we become problem solvers and tacticians. Not because our clients are doing anything wrong, but sometimes employees have their own agendas.”

One common trap that employers can fall into is lack of communication, she observes. “Sometimes when I’m talking to an employer and they are worried about an employee – perhaps they are too abrupt with people and fire off emails – I will ask, have you actually sat them down and told them this? And the employer often hasn’t done so.”

Sunderland appreciates the importance of proper communication with difficult employees, because – by her own admission – she was a rather difficult employee herself. “When I was at Going Places, I was a cocky young solicitor. I would say to people, ‘if you come and ask my advice first, that’s fine; you’re at the top of my list. But if you don’t ask my advice, you’ll be at the bottom.’

“Then one day I was summoned to my boss’s office. I was so full of confidence that I thought I was going to be promoted. Instead, he said, ‘Beverley, my senior leadership team are terrified of you. You need to calm it down. If you don’t, there’s not a place for you in this organisation.’

“I cried for days, because I just hadn’t seen myself as that person. But my boss did me a huge favour. And that’s why I feel able now to say to businesses, you need to go and talk to this person and tell them that this is how they are perceived, because they probably don’t realise it.”

Walking the walk

When it comes to advising employers, Sunderland has something that not all lawyers can boast of: experience of walking the walk. In 1998, she left the law for a while after being “enticed to the dark side” as commercial director at Wensum Plc, a supplier of corporate clothing and uniform whose clients included airlines and the royal household.

When Sunderland’s boss suffered health problems, she handed temporary control of the reins to Sunderland, telling her “‘it’s all yours – don’t mess it up too much”.

“I had to get used to things quickly,” recalls Sunderland. “I was used to people coming to me for advice, but suddenly I had to be much more client-focused and adapt my style. But it taught me a lot; about the importance of practicality, the chain of command, understanding where the shareholders fit in, and the board of directors and so on”.

She adds: “One thing I learnt is that you will never, ever please all of the people all of the time – and so don’t even try. There’s no point in pandering to the loudest voices.” Sunderland recalls having to deal with an employee who had been stealing money from the purses of other staff. “I remember having to make a decision not as a lawyer, but as a manager”, she explains. “I told the employee there were two choices; go through the formal processes, or walk right out of the door.

“And now when I’m talking to managers, I try to offer a practical solution. I’ll say, this is what the law says and these are the risks if you don’t do it. But you are dealing with a human being and these are your choices... Having lived through that, it makes me a better lawyer.”

By 2000, Sunderland found she missed the problem-solving element of being a lawyer and went back to being a solicitor, joining what was then a fairly small employment firm, Doyle Clayton. “I was planning to take it easy, but within a year I was made partner,” remarks Sunderland.

She opened the firm’s Reading office and oversaw its expansion to six solicitors; but she had a growing itch to set up her own firm.

“I explained [to the partners] that I would like to be my own boss, but I wouldn’t poach any staff,” she says. The firm agreed to release her, and Crossland Employment Solicitors was born – though in the early days, it was “just me in a serviced office with an answer machine and a computer”, she recalls.

The team has now grown to four solicitors and a barrister, plus an office manager. Clients range from one-man bands, to a Formular One racing team – and a FTSE 250 company.

Owning the future

Sunderland admits that her decision to set up an employee ownership trust was not entirely original. She took inspiration from her former firm Doyle Clayton, a practice that has grown to four offices and nearly 50 lawyers, and became owned by an employee ownership trust in 2019. Other law firms to have also taken the plunge include south west firm Stephens Scown and London firm Hodge Jones & Allen. So how does the structure work?

Sunderland explains: “Until 22 January, I owned all of the shares in Crossland. Then I set up an employee ownership trust. I sold all my shares to the trust and the trust then pays me back. During that time I will continue to work. At the end of that time, the firm is owned by the employees. So I’m no longer the major shareholder.”

There are three trustees: Sunderland and her colleagues, Barry Ross and Kevin Charles. “The day-to-day running of the firm is still done by me and Barry [as the directors]. But the broader oversight is now by me, Barry and Kevin [as the trustees]. It’s a good idea to have three trustees, because then two can outvote one. I’ve relinquished all control. I’m no longer a shareholder, simply an officeholder and a trustee.”

Sunderland adds: “It will be three or four years until the debt is paid off [from the employee ownership trust to Sunderland]. The firm’s profits go towards paying off the debt to me. Then the profit is there to be shared among the employees; and you can differentiate on how much is received, depending on job title. You can also give up to £3,600 a year in tax free bonuses to staff.”

What will happen to Sunderland when the debt to her is finally paid off? “Then it will be for me to have a discussion with Barry and Kevin and say, do you want me to continue in some form, for example as a consultant, or carrying on as a director? But I have no control and no say. So if they say, ‘we’re sick of you Bev’, I have to disappear into the ether,” she states.

With an eye on retirement, there were other exit options available to Sunderland. One would have been to sell the practice to a law firm that wanted to add a bolt-on employment practice to its client offering. “The drawback is that I would have had to work for a number of years [as an employee], because they would have had a lock in”, explains Sunderland.

“Another option would have been some sort of management buyout. You could say to the team, you raise the capital, pay me off and I’ll go. But it’s a relatively young team with families and mortgages, so that didn’t really seem fair or viable.”

When Sunderland heard about employee ownership trusts, it seemed like the perfect solution. “It’s an excellent exit strategy for people like me, who have founded a firm and want to do the right thing for their employees,” she asserts.

Looking ahead

So what does the future hold for Crossland? Keeping the current standard of client base is important. “We want to continue to deal with quality clients. We like all of our clients,” Sunderland beams – but has she ever had a client she doesn’t like? 

“In 2008, I had just set up and had a mortgage to pay,” she replies. “My husband had retired and I was the main breadwinner. But with one of the first clients, who came to me on recommendation from another law firm, I had to say, ‘I don’t want to act for you anymore’.”

Sunderland reveals that the client had “sought to suggest that things had happened that hadn’t happened”, and she realised that his values did not align with her own. She told him to pay his bill and collect his file.

“I used to keep a photocopy of the cheque on my wall, to remind of the importance of high standards,” she reveals.

Like many who work in a small law firm environment, Sunderland appreciates the close connection to colleagues. “I like knowing the staff on a personal level. We’ve had four babies since we’ve been going. And we don’t have targets; the mantra is doing the best for the client. We operate as a team and we’ve always operated in a paperless way,” she says.

While the firm might recruit another lawyer if the right person came along, there’s no desire to expand for the sake of it.

“We’ve been the size that we are for the past five or six years,” reflects Sunderland. “We want to be small – but perfectly formed.”

Rachel Rothwell is a freelance journalist