Does London have a future?  A challenging question. And one that our guest speaker, Stuart Popham, addressed at our 4th Cellar Club event.

Stuart entertained us with a brilliant and thought-provoking description of London’s path to success – from its  founding by Brutus of Troy – to its present day profile as a leading services centre.  The statistics are compelling;  85% of London’s workforce is employed in the services sector, the highest of any capital city in the world, 100 of the Fortune 500 companies are based in London, as are 4 of the 6 largest law firms and 2 of its universities are in the top ten in the world.  Notably, two million of the 7.6 million residents were not born in the UK –  so London is truly a hub, a gateway to, and magnet for, the rest of the world.

But is London’s success sustainable?  Stuart posited two future scenarios;  the depressing first, a City in decline, with immigration restricted, tax breaks removed and Financial Services companies gradually drifting away to other more welcoming locations around the globe:

“A strand of the fabric of London is pulled and the tapestry of the talent starts to trickle away and buyers and sellers start to set up in another place as they try to attract customers…”

The second more positive scenario is of a City which recognises and promotes its strength as a services hub – not in the commoditised areas (we can’t compete with the workforces of India or China) but a centre of excellence for setting standards for the rest of the world in key services sectors – engineering, law, accounting, media & creative and financial.  Achieving this will enable London to continue to attract the best talent and create demand for the workforce on projects all around the globe.

Stuart prompted the audience to discuss  likely outcomes, but before doing that he prevailed upon Government and other opinion leaders to recognise and understand the services industry and not to opt out of vigorously competing with other Cities who want to take what London has.

Stuart’s reputation precedes him and this subject obviously appealed,this being the best attended Cellar Club event yet. It was again held in the Vaults at the RSA – a venue appropriately redolent of London’s history.

Stuart Popham has been described as ‘the most connected lawyer in the City’:  he recently retired as senior partner of Clifford Chance and is currently Chair of TheCityUK, which represents the UK financial services industry.

The Cellar Club is a regular networking event run by Gracechurch, attended by opinion formers and senior decision makers from major financial, professional and advisory businesses.

Last night we hosted the third of our Cellar Club events – this time in a new ‘Cellar’, the rather impressive vaults at the RSA.  For those of you who asked, the vaults were originally designed as river-front warehouses, presumably by John Adam himself.

Despite our own team being decimated by the rather nasty ‘flu virus going around,  we had a good turnout with colleagues from law, insurance, property, recruitment, accounting, media and financial services represented.  Everyone I chatted with seemed to be busy and cautiously optimistic about the business environment.

Giles Watkins*, from Concentium was our speaker.

His excellent talk on privacy matters was a relaxed (but slightly scary) walk through the world of privacy – in particular how businesses need to be aware of and prepared for the risks of privacy breaches and the increasing vigilance and often severe responses of lawmakers  to such breaches.  Giles cited a number of recent examples of businesses sustaining substantial fines and reputational damage following  almost ‘accidental’ leaks of customer information – incidents that could, seemingly happen to any business at any time.  He also pointed out that there is little consistency across jurisdictions as to how these breaches are regarded by law makers.

Giles finished on a positive note by saying that he believes that ultimately the approach you take should be common-sense based but that businesses can benefit from being prepared through increased brand trust and capability for dealing with complex data issues in a more innovative way.

Thank to all for coming:  our next Cellar Club event will be happening in March 2011 – details to be announced soon.

Ben

*Giles recently founded Concentium, a boutique advisory firm operating on the boundary of business and technology helping organisations to close the chasm between the two. Before Concentium, Giles had a 21 year career in top-tier consulting with Ernst & Young, founding and leading Ernst & Young’s Technology Due Diligence and Post-Transaction Advisory practice, which became the largest such practice in the world.

A big thank you to Tony Angel for leading the conversations at our first ‘Cellar Club’ networking event last night. We all enjoyed his talk on ‘Trust after the banking crisis’ and the difficulties we now face regaining and maintaining trust in the post credit-crunch environment.
Of particular interest was his list of seven points to help organisations regain that trust from their customers and employees. Key to these were exhibiting transparency and integrity, backed up by good corporate governance and regulation.
The other interesting point which emerged from a comparison of his times at Linklaters and now at Standard & Poor’s, was the relative involvement of Partners when compared to the Board members at a corporate. It seems that Partners feel more at liberty to challenge the senior team on issues concerning the running of the firm than do their corporate counterparts. While I am sure there were times when these challenges were awkward to deal with, Tony did comment that it gave him an excellent all-round view of the business at Linklaters.
We’re all looking forward to the next Cellar Club in July and hope you are too!?

The legal press has reported that BLP are finalising a deal to outsource the bulk of Thames Water’s legal work, taking on most of the TW legal team as part of the agreement.  In so doing, they will knock out a bunch of competitors, and secure a workstream of several £m for the next 5 years.

John Bennett who has pulled off the coup rightly described it as marking a paradigm shift – but will it start a craze?

There seem to be two opposing views amongst our clients.  The first, maybe the majority view, could be characterised as saying “Why would we want to dilute the quality of our people with all these in house lawyers.  Sooner or later we will have to fire them and use our good people doing all the crap work that comes with the deal”

The other, especially those with more experience of outsourcing businesses say “it will be the way forward and those making the moves now will gain a big early mover advantage.  The churn of people is the natural mechanic of outsourcing – but not all the people will be poor quality.  Along with the work we may get some great people too”

The debate brings to my mind an old adage:

“Some people make things happen; others wait for things to happen; the rest wonder what happened!”

Top law firms are under increasing pressure to diversify their intake.  Figures from the Sutton Trust and others confirm that partners remain predominantly male, privately educated and Oxbridge.  The debate though seems to centre on the CSR imperative of corrective action: Few people have mentioned that clients of these firms are crying out for a dwindling set of skills in areas such as commercial nous, business understanding and acumen, and relationship building.  No one doubts or questions the outstanding legal and technical credentials of partners from our leading firms, but broadening the DNA pool might turn out to have competitive advantage in areas increasingly depleted.

It seems like a good time to ask.  Most of our clients are beginning to emerge from recessionary trauma: intact but trimmer.  During the tough times, we have all been glad of any work to come our way.  But now there is a growing sense that rebuilding requires focus and that the focus should be on our most important clients.

The problem is that very few firms had well run key client programmes before the recession – even fewer now.  Back then, the obstacles were largely the result of success.  We were all too busy and making good money without the additional burden.

Times have changed. We need a programme that works, and window dressing to tick the “key client” box will not suffice.

There are many reasons why key client programmes fail to deliver.  In a moment, I’ll reflect on our view of the key ingredients for successful programmes.  First though, an observation- something strange has happened!

Most key client programmes fail because they become, or even start as, a burdensome process which fails to bring the client’s voice into the organisation.  In the end, if your key client programme doesn’t make your clients feel more valued, it’s not working.  Numerous clients tell us just that.  They are indifferent to or oblivious of their advisers’ key client programmes.

Here’s the weird thing.  Many of those self same firms also conduct some sort of client research – not always good quality and too often compromised because it’s not independent – but nevertheless they do it.  Somehow the feedback doesn’t link up with the key client process.  They are treated as seemingly different things.

So let’s tear up the old way and put in place some new wineskins here.  The figure shows what we have in mind.

Develop an approach where the key client programme drives proper intelligence gathering.  Part of that (though by no means all) should be independent feedback from the client.  That feedback should be giving the key client team clarity over:

These questions will not be honestly answered if it’s someone within your firm asking them.

And getting the feedback itself is not sufficient. Your firm needs a means of engaging the client team and doing things differently and better than your competitors.

And so our view of the critical success factors:

It’s a short list – and to deliver to it is a longer list of activities. 

But looking at that list, let’s ask again the question we started with:  What state is your key client programme in?

The vast majority of law firms have a resource at their fingertips which has the potential to transform their business and help provide sustainable long-term profitability, growth, dynamism and competitive edge. This resource is the Marketing/Business Development function. But the legal sector is singularly guilty of choosing  not to use it properly. As a result, law firms suffer from a lack of drive, commercial principles, long-term goals – and most importantly – the brightest and best business people, because these individuals see a better future in more attractive sectors.

Treating marketing as a “back office” operation leads to exactly that – a glorified events and brochure operation staffed by people who carry out the partners’ bidding. The whole thing might as well be outsourced to a local printing and design company for all the value it adds.  So, we might have reasonably expected the legal tectonic plates to shift when the recession shook – with tumbling profits acting as a catalyst for change, “necessity being a mother of invention” and all that. However, instead of finally taking marketing seriously to combat the downturn, the painful reality is that Boards have put it, rather than dead-wood partners, first in the line of cost-cutting fire, and adopted an air of resignation to the economic slump, believing they are helpless. What a missed opportunity. Several firms went to the brink and many suffered deeply – but few, if any, saw the meltdown as a sign to fundamentally change the way they market themselves. The prospect of firms’ having private/commercial owners in the wake of the Legal Services Act has, so far, similarly failed to overcome the inertia. Stagnation lies in wait.

Surprisingly, there are ways to turn the marketing function into the central driver of a legal business – and we’re not talking about extra expense. Rather, root-and-branch changes in thinking and structure are the starting points. Firstly, marketing should not be regarded as a ‘support’ department, but incorporated into the hub of the business to advise on the overall strategy downwards. So put your marketing director on the Board, not just the Management/Executive Committee. The articles in the following link analyse the remaining steps: http://www.grch.net/files/legal_sector_special.pdf.

Hello world!

We’re excited to launch our first official Gracechurch blog.

This blog is still under construction. Soon we hope it will provide you with a deeper insight into our work and who we are – we’re very excited to be out here talking to you!

Keep on the lookout for posts from our team members in the future. If you’re interested RSS feeds are available for all posts or specific categories.

Thanks so much for visiting our blog.

Enjoy!