Laying down the law - Keystone Law is both a legal firm and entrepreneurial business with a difference. James Knight, founder and managing partner, discusses his steps to success.
Established in 2002, Keystone Law offers experienced lawyers an alternative career path to working in a traditional law firm. The company makes use of sophisticated technology that its team of more than 100 senior lawyers can operate on a dispersed basis from their own offices. The business model allows for a personal and client focused service, where companies and individuals benefit from expert legal advice and significant savings.
Originally launched in 2002 as Lawyers Direct, the team consisted of six fee-earning lawyers and founders, James Knight and Charles Stinger who injected seed capital of £140,000 into getting the business off the ground.
Knight qualified as a solicitor in 1992, and spent seven years as a commercial solicitor in Hong Kong before returning to the UK in 1999. He set up a law consultancy service, helping small- and medium-sized companies benefit from a legal service that was more commercially-focused, personalised and affordable than was generally available. In 2002, he founded Lawyers Direct to manage client demand and recruited additional, suitably qualified solicitors.
Speaking of the business model, Knight said: 'With a very new business model, limited marketing spend and no existing client base, it was not easy to gain any market share. In the first year the firm turned over just £95,000, which was encouraging, but a long way short of a sustainable business. By year three, the turnover was £1.5m and we started to gain traction. Turnover has increased strongly at about 35 per cent per annum, since that time.
'By 2008, the name Lawyers Direct no longer reflected the type of work and the type of clients we were representing. The firm was rebranded to Keystone Law, which has been highly beneficial. Keystone now has 105 lawyers and 15 support staff.'
Knight is proof that sometimes the most obvious ideas are the best:
'The initial business idea seemed obvious. Use technology to do away with expensive and unnecessary overheads normally associated with a conventional law firm. Give companies direct access to senior lawyers who are properly motivated and really care about their clients.
'Our remuneration structure is almost entirely performance-based, which keeps everyone focused and eliminates waste.'
Comprising a central office with meeting rooms, Keystone is far from the 'virtual' law firm label it is given. 'The firm has a very human feel about it and excellent interaction with clients,' explained Knight.
Knight has used his entrepreneurial flair to fill a gap in the market. Prior to Keystone, he spent five years providing legal consultancy services to companies owned by friends, acting as an outsourced, in-house lawyer. He also maintained various business interests, including a flower shop and group buying Internet business.
Speaking of his decision to launch Keystone, he said: 'It was the advent of broadband and the inevitable effect it would have on business culture, the acceptance of dispersed business models, and a demand for more flexible working solutions.'
Knight began by outlining his key objective in a detailed business plan: 'The fundamental business plan is largely unchanged, however the level of support available to Keystone solicitors has developed greatly.'
Knight has tips for business planning: 'Make sure the basic plan is sound, then get started. If you have enough passion and enough common sense then your business will develop in the right direction. Keep overheads as low as possible for as long as possible.'
Funding can often be the most challenging part of launching a business. Keystone was launched on personal saving and loan stock, but Knight offered words of encouragement: 'In a bull market, people stick with the old established players. In hard times, they are prepared to do things differently, to cut corners and cut costs. These are times when entrepreneurs can flourish. With interest rates at an all time low and excellent tax incentives in force, there is currently no shortage of angel investors. A good business concept with a strong management team should be able to attract investment without too much difficulty.'
Extensive research is vital when starting a business, it can make you feel secure and open the door to further possibilities as Knight discovered: 'Media research was helpful. According to the legal press, 40 per cent of solicitors were unhappy with their current working environment and 60 per cent of companies felt that their legal providers did not provide value for money. Meeting and discussing with contacts was indispensable. At the end of the day, you are still left trusting your own judgment.
'If it is an entrepreneurial business in the true sense, in other words a business that does something differently to the norm, then generally the media will be interested in providing coverage, which is always of great help. If a business has really got legs, then it should succeed on word-of-mouth alone, but good marketing will speed the process enormously.'
Describing the business as 'a glimpse into the future of law firms,' it is Knight's straight-talking approach to business that gives him the edge.
'I believe in enough support and direct incentives. If that doesn't work, then it's never going to,' he explained.
'Set up every aspect properly and get involved in even the smallest and most boring part of that set up process. And then leave it almost entirely to others to run and hopefully develop further! A start-up should try to engender a good reputation and then maybe 10 years later a brand will start to materialise. Unless you are Facebook or Google, it is very difficult for a start-up to create anything approaching a brand.'
With the intention of recruiting at least 25 lawyers during 2012, and increasing marketing spending to speed the process, Keystone Law looks set to achieve its goal of nationwide coverage. And as Knight concluded: 'If you keep at it, it really can happen.'