Mason Hayes is a niche commercial law firm with offices in Manchester and London. Established in 2002 the reputation of the firm continues to grow as to the quality of the firm’s clients and the matters with which it deals. The firm which embraces an internal culture of enthusiasm, commitment and motivation prides itself on its unique ability to work in partnership with its clients and strives in a solution driven environment to offer value for money. Marcus Hayes discusses why Mason Hayes was established and its key vision in providing legal services in an ever changing future legal market.

The traditional legal business model has proved to be very successful. However, by 2002 it was clear that the legal profession was no longer meeting the needs of its clients or, indeed, its lawyers. Having worked in a number of large national law firms prior to 2002, it had only reaffirmed my thinking about the way the legal market was moving generally. That thinking exposed, amongst other things, two key issues:

• The growing concerns from business with regard to the increasing and unsustainable fees being rendered by law firms and their methods of charging.
• A general deep dissatisfaction amongst lawyers working within traditional law firms.

In attempting to address this situation, I thought that there was an opportunity to build an innovative law firm that would meet the demands of both its clients and lawyers; the result was Mason Hayes Solicitors.

The advent of the internet has certainly seen a lot of legal businesses move from the traditional “bricks and mortar” large office environment to more niche and flexible operations. Using the latest technology to run our own business and communicate with our clients has not only enhanced efficiency within our firm but has also seen as a result, the reduction in the cost of doing business. Indeed we can provide the same quality and level of service as a traditional law firm but at a reduced cost because we do not have the same overheads. As a limited company, we have a fairly flat structure, unlike the pyramid structure associated with a traditional law firm. As a consequence, we continue to be able to adapt very quickly to market conditions whilst our lawyers tend to be entrepreneurial and more business orientated.

In creating a law firm that was fit for the 21st century, central to our business model was the creation of a structure that would give lawyers career satisfaction as well as to take their personal and professional lives into consideration. Most lawyers always strive for a better work life balance and are often tired of office politics. More often than not lawyers are increasing given impossible targets or billable hours to hit and where the failure to hit them each month would often mean that they are overlooked for promotion, this meant that any work/life balance was pretty low down on the agenda for lawyers and many were simply leaving the profession because they could see no way of juggling their lives or interests with a career in the law.

This lack of flexibility that continues to exist in the legal industry today can be particularly hard for women. Evidence suggest that women often find it difficult to return to work having had children, as opportunities to work reduced hours appear limited. Recent research has shown that whilst the number of women qualified as Solicitors has doubled in the past decade to make up 60% of all qualified lawyers currently practising in the market place, a disproportionately low number of women hold senior positions.

Turning this traditional model on its head, we have created an opportunity for lawyers to have more control over their destiny. It provides to them a choice as to whether that means spending more time with their families or pursuing other interests, whilst being rewarded fairly. Whether an individual is an employee, working on a freelance or self-employed basis, lawyers at Mason Hayes generally keep more of the fees they generate which compares favourably to the traditional law firm, which will normally pay a salary of up to 25% of expected fees to be generated.

Subject to client needs, this means that they are able to dictate where and when they work, and we then provide within an office environment or externally away from the office, an appropriate infrastructure which will allow lawyers to spend more time focusing on the important matters of servicing their existing clients and developing new ones. Other lawyers however, are keen to work “a normal day” and are comforted in the knowledge that they are being financially rewarded by ending up with a greater proportion of the proverbial pie. As a result of our structure, we have noticed that our lawyers have been liberated and are happier which I believe reflects in their work and business dealings.

The next 5 years will bring dramatic changes in the profession and only those that are best placed to adapt to that change will survive. Forward thinking firms are already contemplating the impact of what the Legal Services Act will mean for their businesses, and the current state of the economy has also caused many to question their business model and how they can reduce costs.

The consequences have been many. It has ranged from ditching hourly rates; large scale redundancies resulting in some firms scaling back their operations, or mergers and acquisitions. These activities will continue apace as firms continue to seek to compete in the economic downturn and become more client focused and sensitive to client cost prejudice. However by stripping away the overheads and excesses associated with the traditional law firm, we have created a new kind of legal services provider which equates to better value and equality with greater efficiency and service. Undoubtedly the flexible and low cost nature of our model will, if adopted by many firms, be the key to survival in today’s economic market.

Marcus Hayes is a Director of Mason Hayes Solicitors

Businesses have faced difficult trading conditions for at least eighteen months, some may say significantly longer. Whilst there are some small positive trends businesses are still failing with depressing regularity. Recent statistics suggest that companies employing between 26 and 50 people are particularly at risk.

Businesses that have made it this far may think they have nothing more to learn about surviving a recession. However, we are not out of the woods yet and some prompt action now may mean survival in the future.

So what should you look out for to survive?

Diversify

When the recession started many companies found that the one product they supplied, possibly a “luxury item”, was no longer required. In a number of cases, sales dropped dramatically and business failure was inevitable.

A mortgage broker I know found that the mortgage business died. Many lenders would not lend and where they would, clients did not want to borrow. They could have failed, instead they developed a second business as insurance brokers. This has grown significantly over the last two years and now that mortgages are becoming easier again they have a stronger business.

The same applies with customers. Have you a small number of large customers on who you rely? What will happen if one of them stops buying or, worse still, fails? Don’t rely on them all continuing. Spread the risk by sourcing and developing new markets and opportunities.

Cut Costs

You may have done this already to some degree. However, many businesses are understandably reluctant to reduce their largest cost, staff. This will often cost them their business.

Business can be about making tough decisions. If you are employing people who are not fully productive ask yourself if you need them. Can you put them on short time? Is this a cost you can do without? I appreciate that there may be redundancy costs to be faced and with long serving employees these can be significant. However in the long term it can increase profitability and benefit the other stakeholders in the business, creditors, the remaining employees and the owners.

Keep People Informed

On many occasions, following a business failure, I have been told by creditors, customers and employees that if only they had known what was going on they would have been prepared to help to some degree. When companies cease all these parties suffer, employees lose their income, customers lose a trusted supplier and creditors lose money. Of course, you have to be careful as to what you tell them but in my experience if they have an idea of what is going on creditors will accept regular, smaller payments against accounts so long as their exposure is not increasing.

Debtor Collection

It is very easy to work for a customer and not get paid. If you think that your terms are being exceeded then ask for payment. Remember that all I have said so far could apply to your customer. If you make a nuisance of yourself then you can get to the front of the queue. If necessary, accept payments on account but do not then be tempted to advance further credit until the account is back in terms.

If you are not getting anywhere yourself then use a solicitor, Mason Hayes come highly recommended!

Don’t work for nothing!

If you are experiencing problems with your business it is a very stressful time. Many directors decide to waive their salaries to support the company. However, if you do this are you simply postponing the inevitable? Your job has become a very stressful hobby.

If you believe in the business then you may choose to do this as a temporary measure but do not let this impact significantly on your personal debts. Losing the business is one thing, then having to contend with large personal debts is quite another.

What if the business can’t survive?

Despite your best efforts you may find yourself with a business that is insolvent. It is very important that at that point you take advice from a Licensed Insolvency Practitioner. This advice should initially be free and does not automatically mean that the business will be wound up. He or she will be able to provide sound and practical advice as to what options are available and what to do next. If followed, this may lead to your business surviving, albeit possibly having entered a formal insolvency procedure and come out the other side, leaving you with a stronger business and an income stream into the future.

For further advice on this article please contact Ian Williamson, Licensed Insolvency Practitioner, of Campbell Crossley & Davis. Telephone 01253 349331 or e-mail r.ianwilliamson@crossleyd.co.uk.

It has long been established by the principles enunciated within the case of Re Lloyds Bank Ltd v Eastwood that the costs of In House Counsel on an inter partes basis are recoverable, such costs would be allowed in the usual manner and that they would be assessed using the conventional method of assessment in all but special cases where it was reasonably plain that that method would infringe the indemnity principle.

In House Counsel can therefore recover its costs employing an hourly rate commensurate with that of an equivalent solicitor in private practice.

However, what is the position regarding the recovery of costs incurred by In House Counsel where they continue to have an involvement in a case despite having instructed external lawyers? This was answered by Master Campbell of the SCCO in the case of Ultraframe (UK) Limited v Eurocell Building Plastics Limited and (2) Eurocell Profiles Limited in a written judgment 31st July 2006.

The case arose out of a claim for damages relating to Patent Infringement and was exceptionally complex, resulting in the Claimant Company employing its own In House Counsel and of necessity External Lawyers.

The Claimant was ultimately successful and recovered damages with the Defendants being ordered to pay the Claimant’s costs on a Standard Basis.

A bill of costs was duly prepared incorporating both the costs incurred by the In House and External Lawyers, and this was opposed by the Defendant on the bases it amounted to a double recovery, the In House Solicitors were not on record as acting, and they stood in the shoes of the client giving instructions to the External Lawyers.

The issue was dealt with as a preliminary issue which was heard by Master Campbell on 12th June 2006 in which he was asked to answer the following legal issue:-

“Subject to those costs being reasonably incurred and reasonable in amount, are the costs of work done by a Solicitor employed by a Corporate Litigant recoverable on a between-the-parties basis if at the material time that Litigant had their Solicitors on the record ?”

Much argument was put forward by both sides and the writer will not bore you with the technical arguments but eventually Master Campbell answered the question as follows:-

“In my Judgment Part B of the bill (Costs of the Employed Solicitor) is recoverable in principle, where the tasks undertaken by Ultraframe “in-house” can be measured and are distinct from those undertaken by Hammonds (external solicitors). If, and to the extent that there is no distinction and the work is duplicated, this will be irrecoverable, but that is a matter of quantum not principle. It follows that my answer to the question posed by the point of dispute (Defendant’s opposition to the claim), as refined by the Claimant, is in the affirmative.”

It was anticipated that the decision of Master Campbell would be appealed but the Defendant’s did not do so, and consequently the case remains persuasive and is thus far the only case to determine this issue.

Neil Clifford, Costs Lawyer

Read Elena Taylor-Dix’s winning essay here.

Read Ralph Kellas’s winning essay here.