Riverview Law will have addressed some of the criticisms of its fixed-fee legal services model with news today (13 May) that it has signed a strategic alliance with established south east law firm DMH Stallard.
A statement by Riverview Law – one of the touted and aggressively marketed of the ‘Tesco law’ challengers – said the alliance would cover a number of areas, including disputes, M&A and real estate. The alliance will see Riverview Law refer its customers to the 48-partner, 100-lawyer Brighton-based firm while allowing DMH Stallard to offer it clients the access to Riverview’s service lines. In the coming months, the two will combines to launch a range of fixed-fee services and products to the market.
Karl Chapman, chief executive of Riverview Law, said: ‘From the very first meeting it became clear that DMH Stallard has, over many years, been moving in the same direction we are taking Riverview Law…We have both reached the same conclusions, albeit from different starting points, about how legal services should be delivered to benefit customers. Signing this alliance reflects the huge potential we see in the legal market.’
Tim Aspinall, managing partner of DMH Stallard, said: ‘Having watched Riverview Law’s rapid progress, we approached them when it became clear they were seeking a like-minded law firm ally to help them to deliver against customer demand in some complex and specialist areas. We can support Riverview Law as it grows just as Riverview Law can help us grow faster.’
Founded a little over a year ago, Riverview Law is owned by LawVest, in which DLA Piper has a 21% stake. It operates through two arms – Riverview Solicitors and Riverview Chambers – around 70 lawyers split roughly two-thirds barristers and one-third solicitors. The proposition is focused on providing SMEs fixed-fee commoditised legal advice on a range of matters including contracts, company law, data protection, disputes, employment, finance, insurance, intellectual property, IT and property.
The model offers businesses with up to 1,000 employees annual contracts from £200 per month for all their day-to-day legal support, or they can receive a fixed price quote for a specific piece of work. Large companies can outsource their in-house legal function to Riverview Law for a fixed price.
Up until now, while its pricing and cost model has been acknowledged for its attempt to address clients’ dissatisfaction with the traditional hourly billing and law firm partnership model, firms have questioned whether individual lawyers are established enough to sell the business model to notable clients. However, high-profile clients already include Vodafone and the alliance with DMH Stallard will add a well-respected full-service law firm to the Riverview set-up.
DMH Stallard is defined as a ‘regional heavyweight’ by The Legal 500 in the South East with top-tier rankings for corporate, employment and intellectual property, among others.
However, the regional legal market has always been very competitive, no more so than over the last five years given the sustained slump in the UK’s economy. Firms have struggled with the costs associated with operating around the orbit of the M25, while getting squeezed by competition from firms in London and the South West at the same time.
DMH will be hoping by positioning itself in this end of the market, it will be securing work streams for the future. The firm’s revenues for 2011/2012 were down 9% year on year to £19.43m, against its record 2008 turnover of £24m.
However, Riverview Law doesn’t operate a partnership and charges fixed fees – which could mean turning a profit for that portion of work could be a challenge for DMH.
Riverview, meanwhile, which set up just over a year ago, has yet to break even. Accounts posted earlier this year show it posted a loss of £3.2m in its first 16 months of trading, due to marketing and start-up costs. However, it claims that it is growing rapidly and is on course to become a major player in the post-Legal Services Act market. This is certainly a move in the right direction.