Monday’s news that midlands firm Blakemores, with a headcount of 250-plus, is the subject of an SRA intervention – effectively confirming that the SRA believes that the firm’s finances mean it cannot safely continue to trade – may leave principals of smaller traditionally run firms, who are staring at diminishing returns, struggling to plan for the future, wondering what on earth they should be doing.
Blakemores, and its consumer-facing brand Lawyers2you, ticks pretty much all the boxes that a firm planning for a viable future would want to tick.
It could take advantage of economies of scale.
It left its 14 high streets - with their Poundlands, charity shops, pawnbrokers and betting shops - behind to concentrate on a presence in the shopping centres that all those shoppers who actually had money moved to shopping in.
And its lawyers got out from behind their desks to meet the public – accessible people, accessibly branded. In an age when intermediaries have weakened the link between lawyer and client, driving down fee margins, they looked to face-to-face contact to re-establish that link.
In 2011 Gazette blogger Viv Williams wrote in praise of these forward-looking steps: ‘The lack of imaginative marketing and client care shown by many law firms is precisely why Lawyers2you is a good idea.’
It wasn’t just the outward-facing marketing (branded ‘undignified’ by some) that Williams referred to. The firm was serious about using its market data properly – recording and following up leads, looking for the links that could lead to cross-referrals, then making sure that the approach was leading to actual instructions.
Blakemores was consciously trying to pre-empt the challenge from ‘Tesco law’.
Put simply, the nihilistic question hanging in the air is this: with the sums of many old-style firms failing to add up, if the future isn’t this sort of thing, then what on earth is it?
Details are only gradually emerging of what went wrong here. It’s easy to deride the cheesy ‘Lawyers2you’ tag – it might be on the gravestone, but it’s unlikely to feature in the autopsy.
Instead, the failure of a firm like this should lead us all to dissect some incredibly difficult questions facing the parts of the consumer-facing market Blakemores drew its clients from.
If a firm does do a big marketing initiative, in the minds of target consumers is it competing with rival law firms, or with all other big brands? If it’s the latter, you burn a lot of cash in the attempt to establish the ‘brand’.
Does diligent work on cross-referrals and capturing client data deliver a margin that is worth the effort in this market?
Blakemores grew by 20-30% over several years – should a law firm ever look to a fast-growth model?
No one in their right mind will be feeling smug and ‘I told you so’-ish about this news. The alternative to the sorts of things Blakemores tried to do is carry on in a world where margins are falling, the hard core of bank debt is rising, clients buy on price alone, and where a good piece of advice fails to lead to follow-on instructions.
Whether you like the Lawyers2you branding or not (I don’t), and whether you think you should have to stand in a shopping centre or not (I sympathise with the widespread hesitancy here), news like this is terrible news for the legal profession.
And that’s because the question really might be - not, ‘which business model is viable?’, and more ‘is this part of the legal market commercially possible, however you do it?’.
Eduardo Reyes is Gazette features editor
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- The Law Society and Birmingham Law Society today issued a joint statement on Blakemores, stating that they have implemented an action plan to support all those affected by the recent collapse. It added: ‘A dedicated online information hub has been set up for the Blakemores’ 250 solicitors and employees based in Leamington and Birmingham. The Law Society and Birmingham Law Society are also working closely with the SRA to help orchestrate a smooth transfer of client files in partnership with the administrator. A further note will be issued shortly with the intention of offering a speedy process for Blakemores’ clients to transfer their files to other solicitors in the Birmingham area.’