I've talked about how Eddie Stobart trucking has entered the legal services market as Stobart Barristers. There has been a discussion about whether this is a good thing or not.
Here is the discussion copied from Linked In:
Is Stobart Solicitors a step too far?
The value, or otherwise, of brands in the legal services market has always been contentious.
There are many who believe quite vehemently that consumers do not want to get their will or their divorce from the local supermarket, never mind a firm better known for haulage. Others, including me, think there is definite value in providing consumers of legal services with brands they know and trust.
However, even I might be a little reluctant to approach a brand I only know from passing lorries on the motorway. Whereas I can relatively easily place brands such as the Co-op or the AA on a spectrum for customer service or quality (even if not specifically for legal services) I have little idea of how Eddie Stobart fits into this.
On the other hand, I don't think they, or anyone else, should be prohibited from entering the market and a lot of the hand wringing going on is just lawyers displaying their usual tendency for superiority and snootiness.
So what do you think? Is Stobart Solicitors a step too far, or will consumers be banging down their doors?
There are many who believe quite vehemently that consumers do not want to get their will or their divorce from the local supermarket, never mind a firm better known for haulage. Others, including me, think there is definite value in providing consumers of legal services with brands they know and trust.
However, even I might be a little reluctant to approach a brand I only know from passing lorries on the motorway. Whereas I can relatively easily place brands such as the Co-op or the AA on a spectrum for customer service or quality (even if not specifically for legal services) I have little idea of how Eddie Stobart fits into this.
On the other hand, I don't think they, or anyone else, should be prohibited from entering the market and a lot of the hand wringing going on is just lawyers displaying their usual tendency for superiority and snootiness.
So what do you think? Is Stobart Solicitors a step too far, or will consumers be banging down their doors?
The belief that the delivery of legal services is becoming increasingly commoditised is a development that is intended to and has the effect of reducing prices. This error of judgment is having a profoundly damaging effect on law firms’ strategic...
1That said, Trevor Howarth's comments on defence firms and particularly lack of concern about scrapping right to choose your own lawyer are alarming.http://www.guardian.co.uk/law/2013/may/08/eddie-stobart-legal-aid ...
1Their challenge, I think, lies in demonstrating how they truly can provide a quality service, and in building a brand that people understand as engaging customers, rather than just the logistics industry.
Stobart (and, heaven knows, I'm not promoting or defending them in any way) as representatives of a large body of 'astute business owners' and managing to run a highly successful logistics business will, without a shadow of doubt, place client care at the top of their values/objectives list. Otherwise, they will have little/no repeat business and no long-term working relationships with their clients. For you to equate 'astute business owners' with 'unlikely to be as diligent in their client care' is both nonsense and arrogant.
I imagine that Stobart (and all astute businesses) know exactly what each piece of work costs them and what the gross and net margins are. So far, I have yet to identify any barristers' chambers which can claim the same, though I can scarcely credit that there aren't any amongst the switched-on commercial sets. As you well know, chambers run their accounts on a surplus/deficit basis and adjust the administration costs to members accordingly to avoid much of either. When a chambers correctly identifies and calculates exactly what it costs to do each piece of work (having allocated proportionate overhead costs to that work too) then it will be able to say what margins/profit it is achieving.
Fundamentally, of course, there's nothing wrong with the surplus/deficit method if the Bar wishes to continue with its traditional, non-business focused ways. However, the new reality of PCT 2.0 will require those who participate to know exactly what margin each case delivers. Otherwise they'll go bust.
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1Remind me again why Stobarts would want to damage their brand by offering a below standard service?
Maybe I am taking a wild stab here...maybe they see a weakness in the current model, a chance to deliver better. One that is better for the client, open, transparent, easy to understand even, brace brace, efficient. None of those mean necessarily a reduction in quality.
1In order that Stobart (or any new entrant) can carry out the necessary obligations of an advocate they will have to use properly trained and qualified barristers/HCAs. So, odds are, they will use the very barristers who are currently in chambers doing exactly the same work as they'll do for Stobart (or any other new entrant). It's amazed me, having listened to members of the Bar, railing against these 'unqualified/untrained/cheap' advocates, at the MoJ roadshow/Access to Justice meetings that they haven't worked out that it will be them who will be doing the work. Who else will it be?
I'm sure that you know how much each piece of work is 'worth' to chambers. That wasn't the question. It was, how much does each piece of work cost? Two different and separate concepts and, I'm concluding from your reply, that you don't know the costs. That isn't, unlike looking at the fee note and seeing what it is worth, an easy thing to do and, if you are doing it, please let me know how as it will save me a lot of work.
Finally, and you won't stop doing it, will you?, what evidence have you got that those in the 'business-focused world' would leave those seeking access to justice 'by the side of the road?
By the way, having just looked at the Stobart web site I see they, like a very few, smart chambers, have ISO 9001; a premier, well accredited, universally accepted QA scheme. I keep asking the question (and never getting an answer) just what, similar, scheme the criminal Bar (or any other part of the Bar, come to that) offers its clients as proof of its advocacy quality?
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1I’d like to take a step back and look at this from the consumer perspective. I work in branding and marketing so I’m interested in the positioning of competitive advantage. The Stobart group is recognised as a UK super brand based on independent research taken from the opinions of marketing experts, business professionals and thousands of British consumers. According to the 2013 Superbrand report:
"the iconic ‘Eddie Stobart’ name is one of the brand’s greatest strengths. Highly competitive pricing and renowned levels of customer service and efficiency, combined with 95% brand recognition throughout the UK, have ensured that Eddie Stobart is not only keeping pace but expanding and increasing in profitability."
It's listed on the London Stock exchange and last financial year had pre-tax profits of £36m, up 23 per cent on the previous year. Stobart Transport and Distribution is trusted to transport over 150,000 containers a year, Stobart Air is trusted to manage Southend Airport, Stobart Infrastructure and Civils to maintain rail networks, you can see where I’m going with this.
No business extends its brand without carefully considering the risk of overextending and damaging their core business. So I’m in little doubt Stobart’s legal offering will be delivered to the same high standards of quality, reliability and distinction.
Stobart Barristers will inevitably be a big player in the supply of legal services. As this new venture enters the market they have a captive audience to work with, making use of the existing client relationships established through the group's other ventures. The legal challenges encountered by transport and haulage will no doubt keep the new legal venture very busy in the short term I'm sure.
As experience and reputation grows their brand will inevitably cross into other practice areas determined by their expanding experience, reputation and fixed pricing. The scale of the groups' businesses will easily allow them to assign marketing budgets that most traditional chambers can only envy. Stobart Barristers will be here for the long term and will be successful, that is certain.
The challenge for traditional sets is how well do they identify and present their competitive advantage to the same market. I'm convinced that most sets have a distinct set of values that could be harnessed to reach new audiences and build their businesses. But these have to move away from generic, internal assumptions to a real world perspective on why their existing clients, professional or lay, buy their services. The sets I have helped rethink their branding and marketing often start with characteristics that are typically about professionalism, approachability and friendliness; but let’s be really honest which chambers would go to market saying anything different? Have you ever met any barrister who has sat with a client and claimed to be unprofessional or unapproachable?
Branding and marketing may be seen as necessary evils by some sets but they’re areas that can no longer be safely neglected. The competitive landscape is getting much tougher for legal services, and traditional sets need to dramatically change the way they present themselves in order to win and retain clients.
There are plenty of examples of brands that have branched into new sectors; you've already named the AA and co-op. Within the creative and broadcast sector Channel 4 turned its own internal design team into a commercial business called 4Creative and more recently Google launched its own advertising agency, Zoo. In 150 years Nokia has moved from making and selling paper to mobile phones via rubber boots. Can you think of any companies that have overstretched its brand?
The ABS model is clearly uncharted territory and there will be some great successes (we'll wonder how we ever lived without them) and many more quiet failures. I know from my work that many entities, in and outside the UK, are very interested in seeing how things develop, who gets things right and who doesn't, and what the implications are for the High Street and commercial legal markets over the next 3-5-10 years (the boundaries of which may themselves become increasingly blurred).
In this instance, for what it's worth, there is no doubt that Stobart has a great brand and has cleverly diversified from its original transport base – as I think, most people agree. They clearly know how to make a business work, even those at first glance far removed from trucking - Carlisle and Southend airports/ rail engineering?
They have likely also instructed enough lawyers themselves to work out where the efficiencies / inefficiencies lie, which may also help in working out the pricing/ profit points of the legal business. And, I'd suggest, the Bar is still perceived as very remote to your average Clapham omnibus plaintiff, so anything to encourage more direct public access is probably a good thing (if only for the survival of many Chambers).
Perhaps a challenge remains in convincing the UK High Street market that they don't need a solicitor prior to approaching a barrister, while the current StobartBarristers marketing/branding doesn't do much to instil confidence or sell a “quality” service - here's hoping they do spend more on the sales pitch. It may also be - as Michael Gough suggests - that given the strength of Stobart's commercial brand it is the B2B sell that becomes the more successful.
Either way, for the barristers with whom Stobart signs deals there is clearly an incentive for it to work. And it can’t be too long before we see a Stobart lorry named Brenda Majorie Hale.
For the benefit of the market's evolution at least, good on them for giving it a go.
"I like trucking", as the late Mel Smith sang.