There will be people looking at Co-op Legal Services’ interim financial results with the same glee as football fans savouring Manchester United’s defeat on Monday.
United were the big spenders, the brand leaders, the swaggering, bold, competition-crushing favourites, brought down a peg or two. Victory for (relatively) little Everton was a triumph of plucky endeavour over ruthless ambition. The Co-op has shown similar market-dominating fervour, announcing plans to recruit 3,000 staff members and cherry-picking the best players, such as Christina Blacklaws as head of its family division.But the financial figures for the first half of 2012 are nothing to write home about. Profits (ending at £700,000) were bound to fall in a year when recruitment (the biggest cost to most businesses) was so high on the agenda.
But with more staff, greater public awareness (even advertising legal services on those questionnaires at the till in Co-op stores) and an alternative business structure licence, turnover grew more slowly than during the same period in 2011.
Like United, success in this market is not simply a case of purchasing the best players and building the best facilities. The legal profession is a potential minefield for new entrants, from costly negligence claims to a reliance on other markets (housing, in particular) for work.
For the Co-op especially, legal services is a risky business. This is a name trusted and liked by most, with an assumption amongst the general public that it operates with ethics as well as profits in mind.
It will take only one contentious litigation to sour that reputation for anyone on the losing side to Co-op’s lawyers, harming the brand in a way that selling a dodgy apple could never achieve. Products can be marketed and sold without too much risk; services require significant investment and a constant grip on delivery.
Follow John on Twitter