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9 June 2011

Posted by Neil Rose, Editor, Legal Futures

Co-operation: law firms seeing the benefits

Charles Layfield may well be right to say that Pannone’s Connect2Law network is the best-kept secret in the legal world. Or rather, the secret is that it has proven so remarkably successful in the decade since it was set up, with a fifth of all law firms now in the network.

Connect2Law has flourished in a regulatory world where lawyer-to-lawyer referrals are excluded from the requirements of rule 9 of the Solicitors Code of Conduct. This will change under the new code coming in on 6 October, which makes no specific reference to such referrals.

However, it should not prove a particular problem for any firm used to dealing with referrals from non-lawyer third parties, as those higher standards will apply instead.

I would love to know just how much work is actually flowing up the spokes to Pannone and the 20 other “hub” firms, but the bigger picture here is law firms helping each other. Now that is something you never used to see very much.

Opportunities have been lost by the failure of firms to see that bigger picture. Take solicitor property selling, a practice widespread and with a history of success in Scotland (solicitors have almost the whole property market in Edinburgh).

But when the Scots tried to come south of Hadrian’s Wall about a decade ago, they simply couldn’t get enough firms to see the benefit of a collective approach.

That seems to be changing. There were a few who saw the light earlier than most – such as LawNet, which began life in 1989 – but perhaps marketing collectives in personal injury is where it really began, although had solicitors got themselves together earlier, maybe they could have fended off the rise of claims management companies.

The practice is becoming increasingly widespread, and some of the networks like QualitySolicitors, HighStreetLawyer and Face2Face Solicitors are more modern examples of firms that do not really compete with each other realising that they are stronger together (one of the difficulties in property selling was perhaps that it required firms who actually were in competition to work harmoniously).

One thing the likes of LawNet, HighStreetLawyer and Connect2Law highlight also is using that collective muscle to procure goods and services, most notably perhaps professional indemnity insurance. Mr Layfield said their group insurance deal was the only way that firms of one to three partners could access Hannover’s cover.

The consensus is that size will matter in the new legal world, but that does not necessarily mean practices need to bulk up themselves. Networks or other ways of managing referrals potentially offer another way. My enemy’s enemy is my friend (assuming the Co-op and the rest are the enemy).

Small firms looking around for a strategy could do worse than consider whether the combination of a network and clever technology might allow them to continue as they are (to some degree, at least) while offering a better proposition to clients – and make some money out of those consumers they might otherwise just turn away.

As those sages Troy, Gabriella and Sharpay would say (High School Musical, if you don’t know), we’re all in this together.

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