The largest multi-office practice in the country has set its sights on establishing a national high street presence, possibly with the aid of external investment, after a period of significant growth, Legal Futures can reveal.
Liverpool-headquartered Forster Dean has 29 offices across the north-west and into the midlands, and plans to add 10 a year from 2013 as it is convinced of the value of a personal, high street service.
The firm handles only personal injury, conveyancing and industrial disease work and does not pay referral fees.
Since a management buy-out (MBO) in 2007, when it had 13 offices, Forster Dean has invested heavily in technology to improve its efficiency. Despite more than doubling the number of offices, it has kept headcount largely static – 100 in 2007, 116 in 2012 – while turnover has grown 68% to £8.4m in around the same time, with profits of £2m. The firm projects a turnover of £9m next year and profits up 30% to £2.6m “as we begin to realise the investment made over the past three years”, said chief executive Greg Shields.
The impact of the MBO in separating ownership from management was a key part of the transformation, he said, as was putting the finance team at the centre of operations. The five directors are paid salaries and leave profit in the business. Being a limited company allows them to build capital value, he continued.
There is also an entrepreneurial culture, in which office managers enjoy “independent command and control” of their offices, while all staff are given full details of the firm’s performance.
“People want community based lawyers,” Mr Shields insisted. “We are trying to build an emotional connection with the customer that lasts beyond the transaction. It’s not about treating them as a commodity; it’s about being really relevant in communities.” Two-thirds of new work comes from recommendation.
The ambitions of the likes of QualitySolicitors and Co-operative Legal Services validate the high street approach, he added, while acknowledging that there is room for commoditised providers too. “Not everyone will want [the high street] level of service.”
Mr Shields described the Forster Dean model as highly scalable – “if it works in 30 sites, it will work in 30 more” – and offers a “very understandable and realisable growth platform… I would love to grow it and take it to a national platform”. The firm is considering the options to achieve this, including bank debt (he praised NatWest for its continued backing since supporting the MBO), private equity or sale to a larger law firm. He is looking at the benefits of becoming an alternative business structure.
Mr Shields said the dynamic but uncertain market place – along with the referral fee ban – presented an opportunity for Forster Dean. “There will be winners and losers. Forster Dean will be one of the winners. We can adapt, we will adapt – can others?”
Greg Shields will be speaking at November’s Legal Futures conference, ‘The cutting edge of law’. See here for booking details.