South-west lawyers battle the credit crunch

A decade of benign growth has seen leading firms in south-west England attract national clients. It is getting tough on the high street, however. Polly Botsford reports.

The outlook for the south-west can perhaps best be described as ‘bright sunshine, with a few dark clouds on the horizon’. The business and corporate legal communities have been faring well, attracting new clients and lawyer talent in a prosperous region.

The region is particularly noted for its leading-edge work in the environmental sector, with firms having extensive expertise in energy, renewables, waste and climate change. As the economy ploughs into ever-more troubled waters, however, the south-west is certainly not immune from the consequences, with more redundancies and cost-saving mergers likely.

The past ten to 15 years have seen south-west firms bolster their credibility by representing clients who traditionally would only have considered a London firm. There has been a shift away from sending important cases or transactions to the capital.

Ian Daniels, chief executive of Ashfords, which has offices across the south-west, said: ‘It is increasingly the case that clients are aware of the quality of work outside London, combined with value for money.’ Ashfords has resisted the temptation to expand across the country, though it does have a presence in London. ‘The work will come down here,’ says Daniels. ‘Why open offices where the rents are higher?’

Victor Tettmar, managing partner at Bond Pearce, which has offices in Plymouth and Bristol, agrees: ‘For me, the south-west has become a credible option. That is the real change. This is partly because the very strong firms, such as Osborne Clarke, TLT and ourselves have grown their practices with an outward focus, looking to develop a national client list.’

Bond Pearce has, however, recently closed its Exeter office, a move which was viewed by some as an ominous sign for the region. But Tettmar says: ‘Closing Exeter is about consolidating the Devon/Cornwall business into the Plymouth office. The move is about growth – it’s not about anything negative.’

The flow of work westwards is self-perpetuating too, as Daniels observes: ‘You start picking up work from further and further afield. If you stand in the street long enough looking up, others will start to look up too.’

Yet, despite a significant increase in national clients, most firms in the region still also look after individuals and local small and medium-sized businesses. As Jeremy Ferguson of Chanter Ferguson in Bideford, North Devon, puts it: ‘We are a small firm in a small town dealing with the "everyday".’

The south-west is not a magnet for big company headquarters, but it has a large number of successful businesses, often family-owned, which employ fewer than ten people. Even so, the legal work can be at the cutting edge. Ferguson’s firm, for example, has led the way with a small-claims mediation service and is now training mediators all over the world.

In the far south-west, the local economy has been transformed by migration. Mark Chanter, president of Cornwall Law Society, says that Cornwall is ‘a very changed county’ in consequence: ‘A lot of people are moving down here for quality-of-life reasons. They have the ability now to work from home, spending part of the week up-country, and they have brought more money into the county. We are not simply a county of retirees.’

For smaller high street and legal aid firms across the south-west, however, there is no denying that tough choices will have to be made. Jane Lister, outgoing managing partner at Foot Anstey, says: ‘We are going to see consolidation of offices and more mergers. If you couple that with the Legal Services Act then there will be dramatic changes after ten or so years of benign growth.’

She adds: ‘Residential property and personal injury markets are not what they were. The likelihood of limited growth in smaller firms alongside rising costs will mean they will look at bunching together.’

Lister excludes Foot Anstey from this bleak prognosis; the firm has grown four-fold in the last eight years, and has recently acquired Truro firm Hancock Caffin, and Plymouth-based Serpell Eaton.

Alec McNeill, president of the Devon and Somerset Law Society, agrees with Lister: ‘We are going to see closures and redundancies. High street practices in all parts of the south-west are experiencing a difficult time and it is going to get worse before it gets better. Some firms will find they can’t continue to operate unless they make radical changes to their practices and their workforce.’

Pat Lush, a council member for the Association of South-Western Law Societies and a partner at Whitehead Vizard in Salisbury, is less pessimistic about the health of small and medium-sized firms there. She says that the local legal market is less susceptible to volatility and though firms ‘are watching carefully’ for signs of a downturn, so far ‘the market is fairly static’.

One business line likely to continue to flourish is the environmental sector. Bristol and south-west firms are ahead of many other parts of the country in their expertise in renewables, issues of sustainability and what is known as ‘cleantech’ – renewables driven by technology.

Not only is the south-west home to the Eden Project (Bond Pearce are its lawyers), and the UK’s first commercial wind farm at Delabole in Cornwall, the region is also about to see the construction of a ‘wave hub’, a grid connection for wave energy devices off the coast of St Ives.

Osborne Clarke has worked on a number of cleantech projects, nationally and internationally, such as a carbon storage project by Dutch electricity company ENECO. Burges Salmon acts for the Department for Environment, Food and Rural Affairs (recently advising the government on its schemes for carbon emissions reduction) and the Carbon Trust. Former Burges Salmon senior partner Bob Smyth has been hired by that signor of sustainability HRH Prince Charles. Smyth was appointed HRH Ambassador for the South West 2008, in recognition of his promotion of social and environmental action.

Both Bond Pearce and Burges Salmon, meanwhile, were co-founders of the Legal Sector Alliance, the initiative involving the Law Society, Business in the Community and top-name law firms, which is aimed at encouraging the profession to ‘reduce carbon footprint and adopt environmentally sustainable practices’. The alliance is not yet a year old, but it has developed a carbon footprint model to help firms easily and objectively measure their environmental impact. The footprints will be published so firms can learn from each other.

Guy Stobart, managing partner of Burges Salmon, says: ‘First and foremost, climate change matters. But also this is what people – our lawyers – want, and in an age of high energy prices, this is also cost-effective. As far as I am aware no other profession is doing this, so it is fantastic that the legal profession is leading in this important area.’

Bristol cream

Unlike some northern cities the Gazette has visited recently, Bristol, the region’s biggest city, has not seen a flood of new entrants into its legal market in recent years. Eversheds, notably, came to the market in the late 1980s and 1990s, though it checked out in 2001.

Firms whose origins are in Bristol have increased in both size and reach, however. Take Osborne Clarke, the firm which once represented local hero Isambard Kingdom Brunel (a statue on the pavement outside its smart Temple Quay office reminds us of the 19th century engineer), which is one of the two dominant corporate firms in the city. Since the 1990s, Osborne Clarke has opened offices in Reading and London, with reconnaissance outposts in Silicon Valley and even India. The firm retains Bristol as its head office even though 50% of its work comes from outside the region.

Simon Beswick, managing partner at the firm, says its lawyers prefer to be based in Bristol even if this means a lot of travelling: ‘Our lawyers know they will travel and they will often service all three offices. If you get on a train at a certain time of day, more than likely there will be 30 or so Osborne Clarke lawyers going to meetings elsewhere.’

The other substantial firm in Bristol, Burges Salmon, has deliberately not opened offices elsewhere in the country, but has increased in size and scope within the city. Stobart says that there are huge benefits for clients in retaining a single site, particularly if that site is in Bristol: ‘A single site means we focus on quality of service and it brings a cohesion which helps to deliver that quality. We can be in Bristol because the type of client we have now does not expect to meet us face to face. Most service providers don’t meet their clients anymore – so it does not matter where we are. Plus, being in Bristol delivers cost benefits.’ It also keeps the firm distinctive, Stobart adds: ‘If we moved to London, it would be harder to distinguish ourselves.’

Many of the other Bristol firms tell similar stories of internal growth and outward expansion. Ashfords has increasingly found itself doing national and international work while ‘still being based in a very nice part of the world’, says Daniels. But no one has a real answer as to what is keeping outsiders out. Tettmar surmises that new entrants may be one of the ‘themes for the future’.

The city, and the region, boast some strong industries, such as agriculture and defence, which feed into the legal market. Burges Salmon has an agriculture practice which, believes Stobart, is only set to strengthen: ‘The industry has restructured and there is more connectivity between those producing food and those making it. Agriculture could well become more important as people decide that it should be protected.’

Veale Wasbrough acts for the aircraft manufacturer Airbus, with a UK operation based in Filton, just outside Bristol, and is involved with the West of England Aerospace Forum, a trade association for the 200 or so companies which operate in the aerospace industry in the south-west region.

Most Bristol-based firms have broadened their client horizons, serving national and international clients in a wide range of industries and sectors, from Veale Wasbrough’s education clients, using the firm’s specialist knowledge on the law for independent schools, to Osborne Clarke’s telecoms expertise, acting for Vodafone and Motorola.

The BBC’s presence in Bristol has spawned a sub-industry of local independent production and creative companies, which stimulate intellectual property work in the city. Some of these specialisms have evolved out of Bristol, and others have developed through individual talent moving from London. But alongside these industries, Bristol still has a strong army of medium-sized family businesses. Veale Wasbrough managing partner Simon Pizzey says these have ‘stayed loyal to the region’, adding that ‘75% of our corporate deals are in the west of England’.

Many firms are clustered near the station in the new Temple Quay development, which houses Osborne Clarke and Bond Pearce, which are to be joined in 2010 by Burges Salmon in a made-to-measure site. Ashfords and TLT are only a stone’s throw away. The development is on the doorstep of Bristol Temple Meads railway station, so the site is well-situated for these outward-looking, outwardly-mobile law firms. It also has a local ferry service which takes you (and took me) into the city centre along some of the fantastic waterways in a very pleasant, traffic-free ten minutes.

Some firms in the city say that lawyers wanting to leave London are attracted to Bristol with its obvious quality-of-life benefits and easy commutes. Richard Brown, a partner at Veale Wasbrough and former London resident, says Bristol has the cultural and business attributes of London, but ‘in miniature’. Rosie Torre, an employment consultant with Bristol Law Society, is more downbeat, saying it has not been that easy to lure talent to the city: ‘There has been a steady drip from London, not exactly a flow. In the last few years we have put on a roadshow to try and attract lawyers to the region, because there are not enough coming down to meet our needs.’ This may change as the economy worsens. Torre adds: ‘The rumour is that since the downturn more people are coming out of London, though I have not yet experienced that myself.’

The south-west of England, a region larger than Wales, encompasses a number of town and city destinations: from the commercial hub of Bristol to the market town of Salisbury, from Truro in the south to Gloucester in the north. Cornwall has recently become a new unitary authority with the merger of its district, borough and county councils (the slogan is ‘One Cornwall’ – just a short step away from independence, perhaps?). The structure of the new organisation, and the status of the legal teams at each of the existing councils, has yet to be finalised. Devon may follow the unitary route too.

The region boasts some of the best coastline in the country, with seaside resorts all over the place. This helps to explain why all the lawyers one comes across there, however senior and however busy, all look tanned and healthy. Perhaps this also has something to do with the fact that, according to government research organisation the South West Observatory, south-westerners work the shortest working week of any region in the country (around 33.2 hours). Access to flexible working is widespread and Bristol, the region’s major city, has a high number of companies offering widespread access to mobile working, according to research commissioned last year by Microsoft.

Much of the region has changed enormously over recent years, rebranding itself with the help of a large number of foodies (think Jamie Oliver, Rick Stein or Richard Guest), and successful festivals, such as Port Eliot and Glastonbury. Newquay in Cornwall has an international airport, which is not only frequented by surf-bores and their boards…
Polly Botsford
is a freelance journalist.