Practice trends: wills & probate

On 17 January, in a move that will give practitioners a taste of things to come when the Legal Service Bill becomes law later this year, the Co-operative Group announced that it was about to launch a wills service. Not just a bog-standard, one-off service, but one that will include updates informing clients of changes in the law and whether they ought to review their will, as well as storage and living wills.

Lawyers have been watching the development with mixed feelings. Richard Grosberg, head of private client at Nottingham firm Nelsons, acknowledges that for solicitors generally practising in this area, there have been increasing competition and challenges.

'Organisations that decide to provide legal services, such as the RAC or the Halifax, approach it in a way that is not height-bound by existing structures. They look at it as a business opportunity, considering how they can make money rather than how they need to adapt their structure, which is how solicitors have to think,' he says.

Grosberg also remarks that the new entrants have 'deeper pockets' and can readily invest into the market. 'Their expertise in marketing and brand awareness is also an advantage,' he continues. 'But, as solicitors, we have our advantages too: firms have thousands of clients and it is up to individual firms to exploit the client base.'

Making a will or not

According to an August 2006 Law Society survey, 32 per cent of people have no intention of making a will and only 41 per cent have an up-to-date will. On paper, that leaves 27 per cent of the population who are potentially thinking of, but have not made, a will. The Co-op cites a much higher figure, taken from research by Will Aid, that '70 per cent of people die without leaving a will'.

Even taking the lower estimate, this means that one in four people are potential customers for the Co-op. There is little immediate compulsion to make a will, but the assumption that low price might be an incentive has prompted prominent charities, which have a direct interest in securing legacies, to run regular campaigns encouraging people to make a will. Still, there seems to be little evidence that this has made much difference in practice.

But combine the effects of initiatives such as Make a Will Week and Will Aid with cheaper will-writing options and the outlook may be different. People who feel they want to sort out their affairs can buy an off-the-shelf will-writing pack for less than £15, or visit a will-writer, a prospect that appears less daunting than going to a solicitor. This has not gone without attracting criticism from solicitors who claim that vulnerable people have fallen victims to these seemingly cheaper alternatives.

Like in conveyancing, which is under pressure from conveyer-belt organisations, a successful wills and probate department needs to weave the service into the practice in the most cost-efficient way.

At a personal level, dealing with death may not be an appealing career prospect, but according to Geoff Dennis, a newly qualified solicitor with Edgware firm Moerans, who specialises in wills, what makes practice interesting is the process of turning emotional issues into practical advice. 'People react differently to mortality, but once you have explained to them that it is about planning how they can minimise inheritance tax (IHT) exposure, and that the state will decide how their assets are allocated if they don't have a will, they start thinking differently and take the issue more seriously.'

For potential clients who have examined the available options, the advantages of going to a solicitor are well known. Will-writers and off-the-shelf legal advice such as that offered by the Co-op, or simple DIY will kits do not consider the will in the overall context of a client's personal circumstances. As making a will is a key element of personal asset management planning, so the argument goes, it makes sense to take professional advice from a lawyer, who will be able to take the full measure of the personal circumstances and structure a will in the most tax efficient way.

Go 'niche' or remain 'full service'?

It is for those reasons that Simon Shaffer, managing partner at Moerans, believes that his firm is unlikely to be affected by the Co-op's latest move, just as they have not been threatened by will-writers.

'There has always been competition from will-writers, but we don't operate in the same area,' he says. 'The sort of people that uses them wouldn't come to us '“ people who don't have contact with solicitors, or even other professionals, on regular basis.'

Moerans is an example of a local firm that has reinvented itself to remain competitive in the face of strained legal aid and pressure from alternative providers.

'We used to be a classic high street firm,' continues Shaffer, 'but because of the liberalisation of legal services and the reform of legal aid we had to make a decision to concentrate on key specialisms. It is part of our evolution: we would not be able to survive as a traditional high street practice.' For firms on that scale, there are only two options, says Shaffer, grow to seven-nine partners and increase the throughput of work to attain economies of scale, or become niche.

Moerans have chosen the latter route and today focus exclusively on work revolving around asset management: wills and probate, trust, and tax planning, including capital gains tax advice. Shaffer's qualification as a New York attorney also gives the firm a competitive edge, allowing them to advise UK-based clients with interests in the US and take referrals from US firms looking for English firms to represent their clients' interests in Britain.

Nelsons has taken a different tack '“ it aims to offer a complete service rather than go 'niche'. Organisations like Halifax have a lot to lose in terms of brand value if things go wrong, and Grosberg suspects that although they are likely to deliver an efficient service, it will be limited to simple situations matching strict parameters, not complicated or unusual cases. 'In order to deliver the efficiencies, the processes have to be automated. There will be no face-to-face with clients, the relationship will be web-based or through call centres, and then clients will get the document - and probably numerous disclaimers.'

'But the market is not going to expand,' continues Grosberg, 'so firms have to decide what they are going to focus on.' In his case, this means concentrating on clients who want a personal service, being able to offer expertise in different areas and emphasising the firm's expertise in client care delivery at the appropriate level. All this may sound both obvious and nebulous, but it goes back to basic concepts such as being able to take a 'holistic' approach and fully embrace the responsibility and duty of care to clients.

Get instructions

Day to day, however, the question remains: wills and probate is not a repeat business (at least, not frequently enough), so how do wills and probate solicitors get clients through the door with minimum marketing spend?

'I can't remember the last time someone last walked in asking for a will,' says Shaffer. 'Business comes from two sources: either referrals from solicitors, accountants or financial advisers; or existing clients and their family or contacts.' The firm actively markets to its own client base as well as through professional intermediaries such as mortgage brokers and financial advisers. When it comes to converting clients, the solicitor advising them on, say, their conveyancing, will mention the desirability of making a will, whether now or in the near future. A lot of the time, it works, simply because it makes sense, according to Shaffer.

Then there is the soft marketing, like giving occasional talks to local organisations. But the firm does not advertise its wills expertise directly to consumers. 'Preparing standard mirror wills for husband and wife in a high street practice costs more than it brings the firm,' says Shaffer.

For Moerans, the key to success is to secure as much non-straightforward work as possible to make the fee structure viable. In fact, letting the basic work go to Tesco or the Co-op can be seen as a positive strategic development, as individuals who choose this option are unlikely to ever go to a solicitor (and pay professional rates) for this type of service. Far better for firms to court clients who will spend a few thousand pounds on more complex arrangements and making an enduring power of attorney. They are more likely to return.

Nelsons have a similar approach. While the firm does not advertise directly to consumers, there is some 'oblique marketing' going on, according to Grosberg. Last year, they got involved with a local community theatre company about a play on families and ageing, which included a daughter talking to her mother about making a will. Grosberg comments that it is not clear what the practical benefits will be but that, as an unusual outreach initiative aimed at destroying the common views about making a will, he felt that it was worth getting involved.

Development plans

Having established the general direction of travel, the key question is how much the firm should grow. 'You could say that larger City firms with private client departments are better, but that is because they have more solicitors,' says Shaffer. 'And that allows them to attract wealthier clients. For us, the main goal is to remain in control of what we do, so we don't want to take on a client with £20m assets, we will send them to a City firm.'

For similar reasons, merging with another firm is not on the agenda. Moerans has no debts and no cashflow problems, and they don't want to take on somebody else's.

Moerans' succession plans appear modest but they are clear. They are not interested in becoming a big regional player but want to keep the business going. 'Succession planning goes on all the time and we have an active plan to develop young lawyers,' says Shaffer. The firm has two partners, two fee-earners and three trainees '“ with a fourth joining in July; a high ratio for a firm this size. And for the time being, it is a question of stabilising the vessel before moving forward again.

The likes of Moerans and Nelsons have a huge advantage in that they talk to an educated market: clients whose assets are significant enough that it makes sense for them to consider taking professional advice. And this is what the clever firms will continue to push. Hard marketing of wills services is tricky, as there is a risk that a firm will be inundated with unfulfilling, loss-making work with little to leverage. Some solicitors are even questioning whether they should actively take part in projects such as Will Aid and Free Wills. These generate expectations that clients will get a top service for nothing, which is self-defeating. 'Wills,' concludes Grosberg, 'should not be advertised on the basis of price.'