Restructuring expertise: Strategically refocusing practice groups

Key takeaway points:

1. Efficiency is essential, but cost cutting just balances the books – it’s investment that pays off in the long term.?

2. Don’t try to defend a position that’s under siege: look for new ground and remember organic growth usually means standing still.? 

3. If you want to build strengths in areas with the prospect of future growth, don’t be afraid to refuse unprofitable work and anything that doesn’t fit within your plans.?

4. Partners must participate in the growth of the firm with a proper system of appraisals and support.

 

In earlier times, military commanders were taught that, when in doubt, they should march their troops towards the sound of gunfire. It’s a good analogy for dealing with today’s challenging markets and our changing sector. Over the past ten years, our firm has been marching straight for the noise, and I believe anything else would be to stand still.

It’s our ambition to feature at the top of the list in the regional UK law firm rankings and one of the major steps we’ve taken toward achieving that growth has been to refocus our work areas, being pretty ruthless in cutting out what isn’t going to support our ambitions and being single-minded in developing those that do.

Creating real payback involves infrastructure investment in things like business development, IT, client care and training. Ironically, these are the things that many law firms cut first because they are discretionary and the returns aren’t immediate. We’ve taken the contrary view.

Overcapacity and polarisation of the ?legal market means there will be unprecedented levels of consolidation in the next few years and a squeeze on the middle ground where we currently sit. Our firm has grown in fee income, reputation, service range and influence, but competition is increasing and the need for a competitive level of depth in core practices is apparent. We must be able to compete successfully with much larger firms that are likely to deliver disproportionate marketing resources and offer clients teams with higher profiles and greater depth.

Organic growth might deliver our goals, but is likely to be a shrinkage in real terms if others can grow faster. Achieving significant growth demands recruitment and acquisition of who and what you need to succeed. We have done a fair amount over the past decade and have aggressive acquisition plans for the next five to ten years.

When I took over as managing partner in 2001, Buckles was a traditional high street firm with very little commercial work and heavily dependent on residential property, personal injury, routine divorce work, consumer-type litigation, general probate and will writing. We also undertook a lot of legal aid work.

All of these practice areas had served the firm well, but the writing was on the wall with the rise of licensed conveyancers, internet based do-it-yourself solutions, unskilled will-writing companies, reducing rates of pay for publicly-funded work and claims companies. Add in the Clementi report and 9/11 – which put paid to our previously-thriving financial services department when the bottom fell out of the investment market – and we had every reason to come up with a strong strategy and clear direction.

We needed to create work in wholly new areas and to realign our activities in other areas. But our first challenge was to resolve internal issues and underperformance at all levels, including the partnership.

Structural changes

I began by focusing on margins rather than turnover and established a proper board structure with specialist heads of department. We already had a finance director, but we brought in appropriately-qualified directors to lead IT, marketing and HR efforts.

We revamped all of our IT and telephone systems to resolve the many practical issues that were holding us back, including reliable servers to avoid downtime, digital dictation and direct-dial telephone numbers. We also brought in a desktop key performance indicator dashboard for fee earners, giving them the information they need to perform well.

Alongside financial discipline, people are the key to making money in a service industry like ours. I made a series of high-level lateral hires to create an immediate injection of much-needed fee income and to stimulate the shift towards a high-performance culture. It worked but it was a leap of faith, as I was recruiting people at remuneration rates that were higher than the current equity partners.

I tackled underperformance by starting at the top – with the partners – and investing heavily in training, encouraging team working and introducing a staff incentive scheme based on team performance.

We moved offices too, making our way from a sprawling mix of adjoining buildings with three different reception areas to a single site with a purpose-redesigned open-plan setting in a centrally located high-profile redevelopment area, with a £1m fit out to support our developing identity. It also allowed us to group complementary teams together.

We had already taken the step of becoming members of the LawNet network, so we had achieved the ISO 9001:2000 quality standard and became one of the first firms to also achieve Investors in People accreditation. Both are investments in the internal workings of the firm, requiring detailed reviews of our administrative function and work processes, all of which was invaluable in preparing for our future growth.

Strategic refocusing

All of this was a springboard for the strategic refocusing of the business. Building on the abolition of crime, immigration and legally aided work, we have refocused the private client teams, massively reduced our traditional overdependence on property and expanded our commercial offerings by adding qualified mediation skills and new practice areas such as social housing, contentious property, and construction ?and engineering.

Wealth preservation and tax planning

With a large wills bank and well-established client base, probate work has always been a steady source of income. However, our private client team, headed by Duncan Jackson, has been significantly refocused into niche areas such as care home fees planning, wealth preservation and tax.

Family

Having stopped all legal aid work, the family team now focuses on complex financial affairs, arrangements for children, overseas assets and diverse high-value settlements, plus an increasing amount of preventative work as cohabitation contracts and prenuptial agreements ?grow in popularity. The team, led by Lyn Brisley, now has a strong emphasis on alternative dispute resolution.

Personal injury

Although it has been significantly reduced in size, ours is still one of the largest personal injury and accident departments in the area, dealing mainly with claimant work and focusing on high-value clinical negligence claims. Re-gearing has created a much more profitable team.

Commercial dispute resolution

This team has been transformed from a low-level, consumer-type litigation team into one of the largest specialist commercial teams in the area. Led by James Maxey, it has a separate mediation service with its own website (Mediated-solutions.co.uk) to develop this fast-growing area.

Construction and engineering

Construction and engineering is a developing area for us, having recently recruited an expert from a national firm who has built the team from scratch. ?In under three years, we have secured ?a third-tier Legal 500 place alongside much larger and well-established ?regional firms.

Social housing

Gail Sykes joined the firm three years ago to create and develop a new social housing team for us. This was quickly followed by a strategic alliance with niche firm Perrins, which has a leading regional team serving the sector.

Our joint alliance creates a combined team of over 20 lawyers acting for over 65 housing associations and local authorities. This has worked well, with joint marketing, tenders and pitches, as well as work referrals for our employment and private client services.

Company commercial

The company commercial team is led by Nigel Moore, who also joined us from a local competitor. It now acts for a number of national and international household name clients, focusing in particular on corporate finance.

Employment

In 2010, a new employment team head was recruited from a regional competitor and, since then, the team has continued to develop its client base, with many new instructions from clients based outside Peterborough. We have also developed BucklesProtect, a fixed-cost annual protection plan for employers.

The team, having previously been overly dependent on relatively low-level employee work, now advises on the full spectrum of employment law issues for businesses and senior executives.

Property

Traditionally this team was heavily dependent on residential property, which at one stage accounted for around 25 per cent of the firm’s fees. Boosted by the recruitment of another partner from a local competitor, that reliance has been deliberately reversed.

Commercial work is now undertaken for a number of national name clients with property portfolios across the UK, consistently securing multi-million-pound instructions over the past year.

The department still provides a smaller specialist residential property service, but we deliberately look to sell services on quality of delivery rather than paying for referral work.

Agriculture and rural affairs

Two years ago, we established an agriculture and rural affairs team with members from a wide range of disciplines across the firm – lawyers specialising in property, tax, trust and wealth preservation services, matrimonial and other family disputes and corporate services.

Many law firms have traditionally treated agricultural work as an extension of their property department, which can overlook the specialist and complex issues affecting this heavily-regulated sector.

Energy and natural resources

The energy sector is also challenging and complex. Our recently-established team is building on a consultancy arrangement with sector specialist Steven Sprague. It acts for a mix of multinational groups and individual investors and promoters in the UK, Europe and beyond.

Brand building

Across the firm, we now have five teams ranked within the Legal 500’s first tier in Peterborough, two teams ranked as first tier in the region and five named as leading individuals, boosting our credibility in these fields. This also contributes to greater awareness of the Buckles brand, an essential part of our overall business development strategy.

Much of our work now comes through recommendation, as a result of concentrating on client care, building relationships with referrers like bankers and accountants, profile raising and aggressive marketing and business development.

Alongside traditional networking and promotional events, I have secured a massive increase in the firm’s public profile by actively seeking out high-profile roles. In recent years, I have been named managing partner of the year by LawNet and east of England businesswoman of the year by the Institute of Directors; been appointed chair of the Greater Peterborough Partnership and the Local Strategic Partnership; become a director and board member of Opportunity Peterborough, the UK’s first urban regeneration company; and joined the boards of various charitable and fundraising organisations. In 2011, Buckles won LawNet’s law firm of the year award, which has further helped to raise our profile.

Future plans

For the future, it makes sense to focus on growth. We have conducted extensive research in drawing up our next ten-year plan, including an internal analysis of our client base, external research programmes and identifying where we need further skills. As a result, we will be recruiting additional specialists to develop further niche areas.

We have also looked in detail at where – and how – to expand our geographical footprint, researching the demographics, commercial market and economic performance of key trading centres to identify our next moves.

There is a distinction to be made between a relentless focus on managing down costs and the need to make longer-term decisions. Once overheads are contained, the route to increased profits lies in ensuring that the quantity and quality of chargeable work is sustained, with a clear focus on business development. This means being prepared to turn away unprofitable work or work that doesn’t fit within our business plan.

It also means ensuring that:?

• we have the right gearing across teams;

• work is carried out at the appropriate level and cost;

• we make best use of our time; and

• we achieve realistic recovery rates.?

Throughout the recession, we have managed to stabilise profits, consistently maintaining partner profit shares while still investing in projects key to delivering the vision in our business plan. We have overhauled our quality systems so that we are outperforming against the standards of our auditing process and have resolved many historical internal issues. We are poised to flourish as a result.