Stowe Family Law is a dedicated family law firm with some 20 offices across the UK, primarily in the country’s wealthier towns and cities. Each office is run by the firm’s lawyers, who, in combination with its experienced management team and external investors, Livingbridge Private Equity, are driving the business forward.
Spiranti met Stowe Family Law Chairman, Ken Fowlie, to learn more.
Fowlie is a big supporter of introducing external capital into professional services firms, having been at the helm of Slater & Gordon in Australia and in the UK for more than a decade after the firm became the first law firm to list on a stock exchange in May 2007. In June this year, he was appointed Chairman of Stowe Family Law, a portfolio company of Livingbridge Private Equity.
“External capital can really help focus the minds of those running portfolio businesses, in a good way; in my experience the involvement can drive innovation and positive cultural change in professional firms,” explains Ken. “But it is not without its challenges.”
“In the case of Stowes, Livingbridge not only offers capital support but also brings access to an experienced and senior team with a considerable track record in building outstanding, profitable client focused businesses, and that is what we are striving to do at Stowe Family Law.”
Ken believes there is a real misunderstanding of the role private capital can play in professional services firms.
“The idea that financial sponsors are there to just take out costs is rarely the case in today’s market,” says Ken. “It is much more often about making a better business, allowing the revenue generators – the lawyers – to be more effective, and to focus on the job they enjoy and do best, serving clients.”
“Businesses that are run by committee rarely drive change quickly or effectively. A financial sponsor brings clarity on how leadership teams can work better together, providing focus on what drives value and instilling a strategic discipline of knowing what a firm isn’t going to do.”
“Private capital can help bring together the best from within a professional firm with external specialists needed to take an idea and drive innovation forward with the discipline needed for the idea to be effectively executed.”
But private capital isn’t always part of the right answer. The very large global law firms have broadly reached the same conclusions that large partnerships struggle to be run, in a day to day sense, by the collective will of partners; good businesses benefit from professional, dedicated management teams with a clearer separation between the role of ownership and management.
They are, says Ken, appearing to do that very effectively in many cases.
It is mid-tier firms in London and regional firms that may have reach a growth plateau that may be facing a more challenging future.
“These firms often struggle to articulate their position in the market and how they compete. Clients know the technical expertise is there – that is a given – so the focus has to be on delivery, systems and process. What is their point of difference,” says Ken.
“Understanding the client journey is critical in all professional engagements, particularly in consumer facing professional services. It can be difficult for lawyers to truly understand the pain points and how to make that journey easier. Private capital can bring a broader perspective, a range of disciplines and a good understanding of how technology can help, based on a range of previous experiences.”
“The discipline behind private capital can also help define roles, provide clarity in decision making, driving innovation whether that is through technology or processes” says Ken.
“This does not mean changing the lives and the roles of those working in the business – clients still want the personal touch from their lawyers, particularly in family law. But it might change the management functions in that business or the way services are delivered.”
And the role of private capital in professional services is set to increase.
“There is a lot of private capital circulating the market with investors looking for a home for that money,” says Ken. “Tech-enabled white-collar services, such as law, are attractive. I think we will see more private capital flowing into the sector. And these investments are made over long periods of time.”
Private capital isn’t the threat to the professional services market many fear – it is a way to open up the creativity, entrepreneurship, and innovation in the professions and, more importantly, the change clients, demand.
Apart from his work with Stowe Family Law Ken is also available to provide advice and counsel to the leaders of professional firms that are thinking about their market strategy and operating model or how they might think about engagement with external capital providers. https://www.linkedin.com/in/ken-fowlie-20254738/