Marilyn Stowe Blog

Marathon woman (From Solicitors Journal)

From my latest Solicitors Journal column “Family Business”, 20/01/2012.

Firms that focus on short-term gain rather than long-term stability are playing a dangerous game, says Marilyn Stowe

Many would see it as a natural business instinct to welcome the decline or demise of a competitor. For me, there is little sadder news than hearing about a firm closing, downsizing or being forced to merge. This month has been characterised by such announcements, some particularly close to home which came as a shock. It seems the entire profession is suffering from the ‘January blues’ in more ways than one.

So why do I feel so genuinely saddened by such news? Mainly at the thought of those in my sector who are losing jobs. There is also the loss of keen competition, which I believe invigorates a market and stimulates work in the area. And also because it provides a salutary reminder to us all: ‘there but for the grace of god go I.’

Our London office finally opened at the beginning of the month. Within days, I had professional headhunters emailing me. Was I interested in acquiring an entire set of fee earners from another firm, who could bring their work with them?  If so, could I give them a call to start the ball rolling? One company told me they only had a conflict of interest with one family law firm in London. The rest were fair game. I rejected their offers.

False economy

I accept that fee earners and their departments are often dissatisfied and want to make a move. But the growing phenomenon of poaching key fee-earners or entire departments and excusing it as a ‘lateral hire’ is happening with increasing frequency. While some firms may see it as financially desirable, a fast-track to an immediate and much larger turnover, it seems to me a false economy. You cannot expect to buy and retain loyalty, nor expect that the same will not be done to your firm. Furthermore in my field, when the short-term work is done, the new fee earners will need to be kept well-fed, which can be far from easy in a market where work may have declined.

The fall-out also often leaves firms at loggerheads, causing massive arguments that aren’t easily forgotten and can lead to litigation. All in all, it seems to me a dangerous ‘cannibalism’ of our industry and I often wonder what the legal sector will be reduced to if firms continue to pursue short-term gain over long-term stability and success.

As a keen runner I do regard business as a marathon, not a sprint. Hours of running have taught me you have to maintain a decent pace to finish the race, but it is best to keep a steady rhythm. If you overdo it, you may drop out with exhaustion or suffer an injury. Marathons are run best when you conserve energy beforehand, take advantage of opportunities and, ultimately, fight your way to the front of the pack. Too often perhaps, it seems some law firms over indulge in the spoils of a strong market and sprint to grab a few yards, failing to make provision for the long run and inevitable downturn – especially those whose clients do not provide repeat business.

Bold but sensible

There is no doubt we are going through some of the toughest of times any of us have ever experienced, but I am a firm believer that the economic climate also presents significant opportunity.

An obvious but much-overlooked quality is to stay bold, but financially sensible. With the launch of our new office in London we waited until the timing was right, safe in the knowledge that we hold a strong business platform which has allowed us to grow gradually and successfully during the past three years. Time will tell.

Perhaps the most important thing is to remain in touch with your fundamental values and the qualities that helped your firm to thrive in the first place. Clients appreciate honesty and quality, and staff want to be valued and feel they have a solid future. I don’t forget that the public always knows who is good and who isn’t. There are no quick fixes.