South West: Return of the general practitioner

Pleasant Weather, rolling hills, a more humane pace of life. The charms of the West Country are luring more and more people eager to get away from the frenzy of larger cities. Whether they are second-home owners, young retirees or down-sizers, these urban migrants are generally reasonably affluent and slightly older. In short, they are the ideal clients for a traditional private client department. The trouble is that, caught between the impending turmoil expected from the Legal Services Act and a larger-than-average ageing legal population, local law firms could face extinction within the next 15 years if they do not address the questions of succession and optimal structure.

An older client base

Milford and Dormor, a three-partner practice active around the Devon'“Somerset borders, has embraced the opportunity offered by the over-fifties market and actively promotes its services specifically to an older client base. The firm was established in 1870 and private client is its largest practice area, with the elderly community accounting for a substantial chunk of business. Wills, trusts, enduring powers of attorney, court of protection are standard work, as well as efficient tax planning. Lawyers even do home visits.

But evidence of the firm's clear focus on this sector is its own investment and financial planning department regulated by the Financial Services Authority, where an independent consultant provides financial advice on pension, investment after retirement and the funding of long-term care.

Providing financial advice is unusual for a firm this size and according to senior partner William Bennett, offering this all-in-one service is a reflection of its commitment to meeting the specific needs of this client base. 'One of our strong points is that we live in a desirable part of the country where many people choose to retire and we are offering them a one-stop shop covering closely connected legal and financial needs,' says Bennett.

The firm has grown a little but Bennett says that since it was created it never had more three partners at any one time. Indeed the feeling, talking to Bennett, is one of quiet immanence, where the local lawyer is part of the community like the vicar, doctor or school teacher, and which could happily carry on exactly as it is for another 100 years.

He and Colin Burdett, the partner in charge of the litigation department, trained with the firm 25 years ago and some of the staff have been with them for over 20 years.

Are they concerned about the impending Legal Services Act? 'We have been monitoring the progress of the Bill closely and there is indeed a risk that some larger organisations will cherry pick particular types of transactions, but, as a firm of solicitors, we are looking at the overall need of a client rather than fragmented services, and we are able to offer a greater range of services.'

Bennett does not deny that the Act is likely to herald 'a period of enormous change' for law firms but he remains confident that the personal service offered by firms like his will be key to them navigating safely through the choppy waters of the Act.

At this stage, like many firms around Britain, the firm has no LSB-specific action plan other than sustaining its marketing effort. This includes active cross-selling, running client seminars and events, or sponsoring sporting event and local opera groups.

But quality of service and a personal approach alone are unlikely to be enough to weather the predicted assault of the Legal Services Act. Milford and Dormor have no succession plan yet, although Bennett says that the situation is under review and that it is considering various options.

Amalgamation and mergers

These days, the challenge for a firm of this size is no longer simply to find a successor to replace the retiring partner, it is a matter of finding the right structure and size which will ensure survival. In the post-Legal Services Act era, where firms that are able to grow and manage their costs will rule the roost, crafting the right succession plan will make all the difference between survival and slow decline, with few options between amalgamating and disappearing altogether.

'With the Legal Services Act coming up, merging is one of the ways in which law firms can compete with the new entities that are about to spring up,' says James Griffin, head of litigation and acting managing partner at South West firm Everys.

The firm whose history goes back over 200 years and has 22 partners across eight offices in the region, is the result of a series of mergers initiated 10 years ago. The latest took place in May 2005 with the amalgamation of Taunton-based Kites.

The expansion into South Somerset was outside the firm's natural sphere of influence but made sense in the context of the impending changes. In the same way that to get into the Exeter market, Everys decided to reach the expected critical size of local players by merging with a firm of a similar size.

'The banks and insurance companies which are most likely to take advantage of the Legal Services Act will doubtless offer their legal services when communicating with their customers on a regular basis.

'As things stand the client approaches us when they have a specific need. To respond to the new competition we will have to be more proactive in our communications with existing clients and forge links with other professionals like accountants who might see their clients more regularly.

'At the end of the day we provide solicitors in each of our offices. If banks try to do the same they are going to find it expensive outside major cities or the legal advice will be undertaken remotely which customers already do not like,' says Griffin.

For firms of this size, courting business clients through their accountants is an obvious strategy to grow the small-to-medium-size business portfolio. But Everys, historically a general high street firm, has not turned its back on private client work '“ in fact, like Milford and Dormor, it has also identified the over-fifties as a specific market and offers a specific Retirement Advisory Service. Going after this market, however, requires more lateral thinking than it used to, and last February the firm appointed an external agency to deploy a more consistent marketing effort with the general public.

'We try to stay in the public eye, so that people think of us first if they have need of a lawyer.' Following the merger with Kites, for instance, Everys has been running ads on the local radio, Orchard FM which covers the area, 'just to raise our profile at first, and get our name out where people have not previously even seen it.'

There are also more unusual initiatives, such as the production of 1,000 jute shopping bags with the Everys logo. 'We took 750 to the Honeton agricultural show, offering them at £1 each for Exeter Leukaemia. We had run out by lunch time, raised money for the charity and now you can see these bags in supermarkets when people go shopping. It's just one way of putting our name about.'

But there is also a more pernicious problem. South West lawyers are growing older. More than 41 per cent of them are over 45, compared with an average of 32.2 per cent in England and Wales, and younger lawyers are far from rushing to the region.

Recruitment problems

'There is a recruitment problem generally in the South West and getting good quality young solicitors is difficult,' says Griffin.

'There is a shortage at the moment, particularly commercial conveyancer, private client lawyer, and good litigators. Young lawyers are attracted to London and the major cities, attracted by the bright lights, high initial salaries and recruitment drives of the bigger firms. We should be able to compete by reference to work-life balance and the location we offer. It is a combination of size of the firm and perception which we must work on.'

Attracting the next generation of lawyers through the normal training contract route has brought mixed results in many West Country firms. Milford and Dormor have stopped taking trainees for now and have welcomed experienced City solicitors who wanted to downscale before retiring.

At Everys, rather than taking on trainees, the firm has offered LPC graduates with no training contract jobs as paralegals, only offering them training contracts later on if they were suitable.

Return of the general practitioner

For Alec McNeill, a partner with Peter, Peter and Wright, recruitment may not be so much of an issue in the case of larger legal centres such as Bristol, Exeter and Taunton, but it is a problem in other parts of the South West where the lack of young talent could result in the general practitioner being placed on the list of endangered species.

Many clients still prefer to have one point of contact in a firm, even if some of the work is done by another fee-earner, according to McNeill, but by definition these 'all rounders' are not going to be newly qualified, they are lawyers who will have been around the block and not specialised in a niche area. 'The only realistic solution is to 'grow your own', but finding younger lawyers who are able to follow this approach is another matter.

'Young would-be lawyers cannot be blamed for being attracted to commercial work in the larger cities,' continues McNeill. 'But that creates several potential problems for firms outside those centres. Graduates who find the right job and stay in a large commercial firm can have a worthwhile career but they end up very specialised. The current system of training is also a problem, allowing graduates to become qualified after as little as 18 months [of CPE and LPC] when it used to take five years, and by forcing them into specialising early on.'

Assuming that some of these younger lawyers are interested in moving to the South West, their excessive expertise could be an obstacle to finding a suitable job. 'There is not enough work in an average local firm for, say, a full-time employment lawyer,' says McNeill, 'so they would have to be prepared to do other types of work or find a job in Bristol or possibly Exeter.'

Which conceals another dilemma: as firms grow, they risk severing the links with their historical client base on the one hand, and fail, on the other, to attract larger commercial clients in high enough numbers.

'There is the risk that clients outgrow their legal advisers,' comments McNeill.

'Many local firms which grew through mergers in the 1980s expanded on the back of the local business boom and gradually moved away from private client work.

'But a generation down the line, the children or successors of successful entrepreneurs, who do not have the same business loyalty as their parents, decide that they will take the legal work elsewhere, to larger firms with the capacity '“ they think '“ to handle more complex work,' says McNeill.

Sole practitioners are unlikely to have an easy ride as they are under serious pressure from the two-to-four partner firms, but this could be promising for good old-fashioned general practitioners. Ultimately however, it could all turn on whether new blood is coming to the area.

Spread the downsizing trend

But all is not lost. If junior lawyers cannot be attracted at the beginning of their career then as they grow a bit older and gain more experience many will consider downsizing, particularly when they start a family.

This is how high-calibre lawyers will be coming to Somerset, Devon and Cornwall. It has already started with Bristol and Exeter '“ it might only a matter of time for the trend to spread to the slightly more remote areas. The only problem is that it is not within the control of law firms, and that in the meantime, some may disappear before the market can regenerate itself.