Martin Hoare, managing partner of Gorvins, talks to Jean-Yves Gilg about interweaving business areas, stealing a march on larger rivals, and how comparison shopping will accelerate the race to the bottom for legal services
Manchester-born Martin Hoare was six when the family upped sticks to head south but “for some strange reason” he’s always regarded himself as a Mancunian, he says. So when an opportunity came up to move back to the North West, the commercial property specialist didn’t need to think too long about it.
After completing his LPC in Chester, Hoare trained with Eversheds in London. He returned to the firm’s Manchester office after a stint at Halliwells and Addleshaw Goddard. But in 2010, the desire to do his own thing led him to move sideways and join Stockport-based Gorvins. A traditional full-service firm, Gorvins was starting to develop its business client portfolio. Last December, Hoare was appointed managing partner of the 110-strong firm, succeeding head of residential property Lorraine Lockie.
Boring property work
The joke in the Hoare household is that his wife, also a solicitor, does intellectual property work while he just does boring property work. Life at Gorvins, however, has been anything but boring for Hoare. The 43-year-old built up his own property practice almost from scratch. “The whole purpose of me joining was to go out, find new work, and grow the practice,” he says. “There’s nothing terribly scientific about it: you get yourself so busy that you can’t move, then you get someone else in. There’s an element of trial and error. We got some great people in, got them busy, and we’re now into the next phase.”
The firm now has 15 partners, four of whom are equity, and about 40 fee earners. Revenue is still split roughly 50/50 between private client work and commercial client, and the plan is to make the two sides of the business more interwoven. “They complement each other well,” Hoare remarks. “Having a balanced portfolio with a spread of work is a key plank in our strategy. You need to tailor your offering based on what’s going on in the market but having that full service is essential.”
The firm has a diverse client base but the plan is to grow the owner-managed businesses market, with a “sweet spot” of clients budgeting to spend between £10,000 and £100,000 a year on legal fees.
Teaching clients how to use lawyers can be expensive and time consuming for firms such as Gorvins, many of which are targeting the family-owned business market. These clients have a need for repeat advice across both commercial and private client, and they know how to make the best of their lawyers. “We’re not prescriptive, but these are relatively sophisticated clients in terms of legal purchase,” Hoare says. “They don’t need to be taught how to use a lawyer. Both for clients and for us, it makes sense to have a decent relationship going. This only happens if there is regular interaction.”
Connecting business clients with private client work is the perennial challenge in full-service firms. How does Gorvins go about it? “We need to be intelligent about how we manage the relationship. These are owner-managed businesses, so there are going to be succession planning issues, for instance. In legal terms, it’s the way their shareholders’ agreement, for example, reads into their wills, and just how they set up family affairs generally.”
This combined offering is “quite a powerful proposition”, says Hoare, who observes that several larger commercial firms in the region are now returning to it. Gorvins is hoping to steal a march on its bigger rivals by making sure its offering goes beyond the delivery of sound technical advice. It was corporate sponsor of the Manchester International Festival, a move which it hopes will send a clear signal that it is part of the local community. It has also set up the Greater Manchester Family Business Association, a joint initiative with BDO Accountants and NatWest, to provide a regular forum for family-managed businesses.
In post-austerity Britain, mid-tier businesses are expected to play a significant role in the country’s economic revival. Equally, this cohort of entrepreneurs is business savvy and expects more than just being sold services on a one-off basis. This is where initiatives such as the Family Business Association come in, along with a similar one that Gorvins has set up focusing more specifically on commercial property.
“It’s trying to be more sophisticated than just throwing a bunch of people into a room,” explains Hoare. “There is more focus; events are usually about something new, like a new building or a new restaurant. It’s the sort of thing that works for us and it’s a good way to developing potential relationships.”
People and brands
But this is just one strand in a bigger plan to grow Gorvins as a credible alternative to established firms. The key question is to have an approach that will allow you to convert interest into instructions. “That’s about having the right people in the firm,” Hoare says. “You follow your nose with contacts and you try to persuade them to work with you. It’s the opposite of cold-calling; it’s about your reputation and working hard, and profiling your brand as an exceptional and safe organisation to use.”
Turning your firm into a trustworthy brand with potential clients, not just convincing them you have the technical skills to do the work, is the greatest challenge, Hoare continues. “Once you start working on a certain type and value of work, it doesn’t matter how good you are, so long as your brand is acceptable to the finance director.” Hoare admits there is still some way to go but he says the firm is gaining traction.
There have been instances where prospective clients chose to instruct larger firms, “but you have to accept it and smile, understand that it’s the client’s decision and you just keep working away until the next time when they will come to you instead”. And this is not always a bad outcome. “We must be realistic about what we can do; there are some cases where we got into some conversations but we knew we would be stretched, so it was right not to have got the work.”
Like most mid-tier firms, Gorvins provides partner involvement on work where it simply wouldn’t make economic sense in larger firms. “We need to stay focused on deals that the bigger firms won’t give partners’ time to, but are complicated enough and need the advanced commercial and legal input to warrant a good quality partner on them.”
The firm has also embraced fixed fees wherever possible, which, in practice, means with regular clients. “It’s a lot easier to do with repeat business,” says Hoare. “One of the biggest variables is your client. If you have no idea what your client’s going to do next, it’s difficult to quote accurately.”
Hoare also dismisses the accepted view that fixed fees were brought in on the back of alternative business structures and the Legal Services Act, saying it has been normal practice in larger firms for some time. “Fixed fees are filtering down and the mid-market is now catching up. Fee earners still record their time but that’s just an internal measure.”
Another trend is retainer-based work. Although Gorvins doesn’t offer it as standard, Hoare says there are opportunities for packaging up commercial services on a fixed price retainer basis. Areas such as employment, general commercial work, and property could lend themselves to this approach, he says. It could work for clients who are not looking at spending a large amount in legal fees every year but have a predictable requirement. “This could help smooth out the spend for the year. The question is how you can model it; there could be a menu of the services you can provide under the retainer. We’re only thinking about it at the moment, but you can see why it would be a direction of travel for some specific disciplines like HR.”
Hoare is also hesitant about off-the-shelf fixed prices in the firm’s part of the market. It’s not just that commoditised services providers haven’t made inroads into the mid-tier consumer segment. Buyers of legal services at that level expect an element of bespoke service, he says. “We don’t necessarily see commoditisation happening in our part of the market, provided we keep our access to clients at a certain level of sophistication. It will be difficult for volume providers to deal safely and with any credibility with the requirements in that part of the market.”
Doesn’t that nevertheless create an expectation even with these clients? Perhaps, but for firms like Gorvins, there’s a basic business reason why this is not a sensible option: costs. “We can’t do that,” says Hoare, “but look at residential conveyancing, which is a price-sensitive area: we have a sizeable team, we’re not the cheapest but we’re not the more expensive, and we pitch a value for money proposition.”
What’s more, clients are probably more educated about value for money than the commoditisation lobby gives them credit for. “My sense is that consumers are getting increasingly sophisticated,” Hoare comments. “The whole online thing where you can get a couple of quotes at the touch of a button after just a few clicks, that was just accelerating the race to the bottom.”
For Gorvins, this realisation has also been a useful lesson about the firm’s own financial mechanics. “We’re getting better at understanding our bottom line from a cost point of view, so we’re driving enough business not to have to fight over every single morsel. We know if we go below a certain price point it’ll lose us money, so we know now internally what our cost is.”These are brave conclusions for a firm of Gorvins’ size. They also seem to reflect a wider new awakening among mid-tier firms that the sirens of commoditisation could be a short-term distraction with disastrous long-term consequences. It doesn’t mean that these firms can sit still, but at a time where economic indicators remain uncertain, it sends an uplifting message of confidence for this part of the legal services sector.
This article was first published in Solicitors Journal on 6 September 2017 and is reproduced by kind permission