Will national franchises be the future for high street firms?
As law firms edge ever closer to the time when they will lose their monopoly on the provision of legal services, they are finally putting their heads above the parapet and revealing their survival strategies.
Up to now many have been reluctant to show their hands, fearing that their innovations might fail or that their rivals will copy them.
The latest lawyer to tread boldly into the brave new legal world is Guy Barnett, the managing partner at Midlands firm Blakemores.
This week he told the Gazette about the launch of his new national law firm franchise, Lawyers2you, which will expand the model that Blakemores has used since January 2010.
It is similar to the model used by QualitySolicitors, but as Barnett points out, ‘we did it first’.
Lawyers2you places marketing stands in high footfall locations, such as shopping centres, to provide consumers with easy access to legal advice.
The stands are manned by paralegals who direct people to information brochures or a call centre to help with the legal issues. If a solicitor is required, clients are put in contact with the local franchise member.
Like the strategy used by QualitySolicitors, which has started to place marketing stands in branches of WHSmith, Lawyers2you takes the law to where potential consumers are likely to be, rather than waiting for clients to walk through the doors of a law firm.
It is this focus on the consumer that is seen as the key to survival. Making the law more accessible for clients is central to Barnett’s mission.
Importantly for a successful franchise operation, his view is shared by the managing director of Kiteleys, the first firm taking part in a trial of the franchise arrangement.
Mark Kiteley says: ‘For us it’s all about reaching out to clients and making it as easy as possible for them to speak to a solicitor.’
This focus seems to underpin the criteria on which Barnett will select member firms, with the ethos not just about surviving and making money, but also about providing a public service.
To be considered for membership, firms must do legal aid work. ‘We are committed to the access to justice campaign,’ says Barnett. Indeed, he says, his best performing stand, which provides 10 to 15 leads a day, provides only free legal advice to 70% of clients, without it turning into paid for work.
Barnett’s approach seems more cautious than that of QualitySolicitors. He is trialling the new arrangements with five firms before launching it nationally in January 2012.
The new franchise, which will be launched officially at the 360 Legal Group’s conference next week, will not be accompanied by the huge media campaign that QualitySolicitors has embarked on.
However, Barnett does have big plans for his franchise. As soon as the rules permit, he hopes to secure investment to take his model not just throughout the UK, but to Europe and America, which should help ingrain his brand in the public consciousness.
QualitySolicitors founder Craig Holt often draws the analogy between the legal services market and opticians – while there used to be small opticians in each town, there are now three big brands that the public tend to go to.
Perhaps, with QualitySolicitors, Gary Yantin’s HighStreetLawyer.com and now Lawyers2 you, we are seeing that trend working out.
Comments
Franchises Have Systems That Work
Franchises are more successful generally than individual firms because they have systems. The knowledge on how to run the business profitably is replicable and the system is what makes franchises successful.
Is Quality Solicitors a franchise? Not yet, but as it grows in intellectual and brand power it will probably enable firms to benefit from systems of work that are replicable and successful across all its members.
The legal marketplace won't be as simple as three major high street players.
Just as there are online spectacle companies doing business direct, so there will be online law firms. There will be subscription based legal firms, (just as there are contact lens subscriptions).
What the future holds is diversity. And diversity means opportunity for some firms to steal market share because the clients will be ready. The more legal services that are offered the more likely someone is that will be ready to buy,
Diversity also means that "just satisfied" clients may look elsewhere for more easily consumed and better value legal services. So satisfied clients need to be worked on through great servicing to become loyal clients.
Making law easily consumed, value for money and well packaged is really what franchising is all about. But there's no monopoly on it. Any law firm can create it's own systems that are successful. Some inspiration can be found in Michael Gerber's E-Myth revisited book.
And the other benefit of having a system is that you can sell your company when you want to. Just hand over the manual about how you make your money and you'll be snapped up.
Brandchising!
Whether you want to call it franchising, branding, licencing, collectivisation or consorting one thing is clear. The BRAND is coming to legal services. Whilst each model has its distinctive nature and will appeal to its own audience, small law firms who choose to remain independent and outside of the protection of a larger organisation will need to have a very good reason for doing so and a robust strategy for survival.
What each brand has realised is the need to understand the customer and deliver a service that the customer expects and deserves.
Best of luck to Lawyers2You, Kitelys and the other firms engaged in the trial.
Franchising
Looks like there are 3 distinct trends in the smaller firms, those that have all but given up on retaining their own destiny and affiliated already with companies who will control their destiny, those that don't even see the threat coming and those that are thinking "out of the box", using social media and good search marketing to level the playing field. the 3rd category is entirely possible, but to date there are few adopters. Time to wake up.
Brandchising - tacky
The schemes to date are just the setting up of factory style 'dumbed down' legal people. Nothing new, and quality clients do not want such outfits. Delivering actual quality is never at the forefront of the schemes.
With size comes corner cutting and dumbing down and loss of skills AND MISTAKES.
Not what the profession needs when PII is as high as it is now.
ABS etc will not dilute as the hysteria suggests it will, as firms can get loans/investment now, but throwing money at a firm is not the right way. Smaller firms are not surviving nor will they, as many are overworked, desparate and have taken their eye off the delivery of quality. Get your house in order in terms of quality first and foremost. Then employ quality solicitors (actual quality people not just adopting a name), and not too many paralegals, and your firm will stay viable, grow, as will revenue.
Suddenly aim to get massive, and you'll fight in the current factory model pool... for the same fish...and your brand will get tarnished long term..
I agree with this to an
I agree with this to an extent...
There are essentially two types of clients looking for legal services: those willing to pay for the bespoke legal advice of a solicitor (and the quality that comes with it) and those that want a cheap, "good enough" legal service.
While the former pool is smaller it is also more high value. It is currently (and will continue to be, in my opinion) dominated by high quality local solicitors that have established themselves in their communities through consistant quality of service and word of mouth. This market is currently overpopulated, highly competitive and difficult to break into.
The other pool is far larger, and only going to expand with legal aid cuts. It is also currently underprovided for. What the franchises, like the brands that will join them in this market, will offer to this pool is economy of scale, tried and tested processes designed to maximise profit margin and best business practice. The quality will not be as high, but then again, you get what you pay for. For the majority it will be good enough. It has to be if they want to suceed.
What these franchises, and all firms, must do is strike the balance correctly between quality and economy for their target market.
I also agree that by venturing into the larger, lower quality pool small solicitors firms are doing themselves a disservice (unless they are part of a brand) as they will not be able to leverage their quality or match the economy of scale of other entrants.
There is not one solution to how to handle ABS, and it may be that your firm decides that its current path is the right one. Fair enough. But what you cannot do is not even consider the other possibilities around you. Reject them, hate them, but at least consider them objectively.
They might surprise you.
They might not.
Franchising
I have a friend working in one of these franchise firms.
The problem is the cost of investigating the shopping centre referrals the vast majority of which don't stand up.
Nevertheless it spins well.
Cheaper justice requires a widespread simplfication of law and procedure and judges tempering law with justice. In short the "rule of just law".
Digital technnology engenders binary thinking across society and this impacts on the law. People refer to it as tick box and complain of a loss of discretion by every one from ticket inspectors and police officers right up to judges. In fact it's the loss of the subjective element, justice, in our judicial system.
Those attending a highstreet booth want justice. What they get is power structure.
Re:
Franchising is a good and bad thing, its good because you gain lots of money but its bad because different franchises might run things differently, treat staff, customer differently
High Street
How many though will truly understand the franchise model? Andrew Tilsiter
Iran Sanctions
Nice blog on law society.Thank you for posting the great content…I was looking for something like this…I found it quiet interesting, hopefully you will keep posting such blogs….Keep sharing
Will national franchises be the future for high street firms?
Of course not. It breeds low quality, and the majority of the public are smart. Very.
Good luck to the businesses you mention, though please can 'innovators' try and keep the marketing ideas from being tacky.
Yes the public are smart....
.........and that is exactly why they are demanding better service than many firms currently provide, (perhaps even know how to provide!?), better availability and more transparent pricing. I could go on!
As long as 'Anonymous', and doubtless others too, feel that a national franchise "breeds low quality" then the better that is for those entrepreneurial solicitors expressing interest in joining the likes of the recently launched new national law firm franchise, face2face solicitors.
Solicitors who want to be their own boss, offer something different in a different way and build their own business based of exceptional client service delivering bespoke soltions to discerning clients face-to-face using the very best infrastructure in the new legal landscape should check out this exciting opportunity and disprove the likes of 'Anonymous'. 'Anonymous', please happily carry on – at least as long as you are still in business.
If you are keen to start your own law firm, get up and running sooner with lower capital outlay, enjoy preferential PII, be fully supported with ongoing business mentoring and training then check out www.face2face solicitors.net You'll be helped every step of the way to build your successful law practice with likely realisable value when you want to exit. Just another benefit of running your business within a national brand franchise.
who do you think you are fooling
What a load of tosh spouted once again by those who are seeking to get rich by hanging on to the coat tails of the profession.
Some customers will always go for the cheapest option - particularly in conveyancing. They ring around and then go with the cheapest quote - they do not stop to ask the reason why the quote is cheap and frankly they do not care. There are firms out there who already do streams of work at very cheap prices and their service is on most of the occasions good enough .How does a large organisation such as Coop or even a franchise undercut these cheap rates without providing an even poorer service? Answer: they can't.
Take wills and probate- the Coop and most will writers charge more than the average high street lawyer. Again the Franchise either has to charge more to pay the franchise fees or has to decide to make less profit whilst the "brand" gets rich at his expense. .You may be able to import cheap glasses in bulk from china but the same does not work for legal services.
Other work that requires more of a personal service may not be so easy to commoditise. I know too many clients who for example have used panel lawyers instructed by insurers at the other end of the country but then soon realise they would prefer to have somebody they can talk to. The Coop and the large ABS will not succeed here; the franchise might but again he has to be more expensive so to pay the franchise fees and the quality is not necessarily any better.
Legal services are too expensive in many areas. The hourly rate for litigation allowed by the courts for a senior lawyer in the south is £220, up from about £130 14 years ago. However, gone are the days when each lawyer needs their own secretary and other technological advances mean costs could be much lawyer if lawyers were not being so greedy. Reduction in cost does not always equate to poorer service, just a better way of working. Lawyers need to be clever in the way they price work and not stick to rigid hourly rates.
Frankly those who post supporting ABS and notsoquality solicitors are all a bit tedious. They are of course in the employ of such organisations or have nothing better to do - perhaps wanabe or failed solicitors.
Most firms get their work through recommendations which is why it is so hard for new firms to make an entrance unless the owner is well known in his own right. The next important source of work is the internet. Comparing legal services to buying cheap glasses just demonstrates the ignorance of those who advocate franchises. Franchises will not be able to provide cheap legal services on the scale that specsavers can glasses and frankly if they can then those who choose to do such work are welcome to it
what about the internet
with 60% of all future business for law firms set to be from the internet, the real future is online legal services.
Will national franchises be the future...zzzzzzzzzzzzz
Of course not, as do any in the past or now offer actual quality. You don't rebrand if you are any good.
The public are not stupid when spending the amount of money that legal fees are.
Calling something premier or quality is not enough.