The other alternative
Continuing our series on alternatives to alterntive business structures, we wonder why a recent cross-border venture by a Cumbrian practice is the first of its kind
Cross-border practice. The term is familiar to large Scottish firms with an office in London or other major English city, and to English firms who have expanded likewise into Scotland. For practices closer to the actual border, however, there appears to have been no instance of expansion into the other jurisdiction.
Until last September, that is, when BPK Scotland opened in Dumfries. With four staff all told between its legal and estate agency sections (but planning to recruit another solicitor or two), it is the initial extension into Scotland of Bell Park Kerridge (BPK).
Founded in 2000 from the former Carlisle branch of north of England firm Crutes, and now also operating in Cockermouth, Cumbria, the incorporated practice BPK currently comprises two directors, 12 solicitors or legal executives, and 12 other staff, mostly based in smart modern offices on the outskirts of Carlisle.
Director James Bell explains that the firm began thinking of setting up in Scotland about four years before the Dumfries office finally opened.
“For a portion of the local community, the border is just not recognised, and having a border reiver name I can understand their view”, he comments. “It comes as a surprise to many who find out the legal systems are different.
“We found that our clients were seeking advice on Scottish matters, and we felt obliged to refer them to firms we thought could help. Typically, these clients were businesses with branches both sides of the border, and more elderly clients who were moving to Scotland to retire, or buying a holiday home.
“Our clients were saying it was about time we had a Scottish branch too, so that it was a one-stop shop for them. This went on for years, but with increasing frequency, so the decision was made.”
Nothing came of BPK’s preferred option – to find a Scottish firm to take over, or an employed individual with a following, who wanted to start on his or her own account – which left it with the choice of opening as a branch office of an English firm, regulated by the SRA, or setting up a separate operation under the Law Society of Scotland. The latter seemed more sensible with the prospect of an independence referendum.
“The Society was straightforward to deal with, though it had no blueprint to start with, and the Scottish Master Policy is much cheaper than insuring under market rates in England,” Bell says.
Establishing the necessary structure was not that difficult: BPK Scotland is an incorporated multinational practice, owned 95% by BPK and 1% by each of three English directors, who are registered foreign lawyers in Scotland, one dual-qualified lawyer, and Steven Crommie, its Scots qualified solicitor based in Dumfries. The need for the solicitor in charge of the office to be three years’ qualified, however, only emerged as an issue at a late stage, and it took some time to find a suitable candidate willing to relocate away from the cities. Eventually, the Scottish company was established in May 2012, Crommie joined in July, working initially in Carlisle, and the Dumfries operation opened its doors in September.
“It’s early days, but we have definitely got some work for the English office through the arrangement, especially relating to property transactions,” Bell records. “People think we understand the other legal system – which we do.”
He adds: “We hope we will be able to create a market in Dumfries that will benefit everyone. It may be a long time before the Scottish office builds up the sort of level of business that we are looking for, but we are prepared to take a long view.”
As a firm, BPK is prepared to do things its own way. Unusually for an English firm, it also does business as estate agents and, after joining the local solicitors’ property centre in Dumfries, it left again, having decided that it preferred to operate as “a mainstream estate agency”.
So should Scots firms be thinking of making the reverse move? Bell suggests that there is less incentive “because the fees are lower and my feeling is that the competition is hotter south of the border”. On the other hand, he also has the impression that the Scottish economy is quieter than that in Cumbria, so perhaps the most important factors are the likely client base and the perceived opportunities for the individual practice.
Having had one eye on the independence debate, does Bell expect the outcome to have an impact on the level of cross-border work? He confesses not to have an answer, and of course “Who is in and who is out of the EU is another dimension. But whatever happens, we are there on both sides – we have a foot in both camps.”
Has your practice devised a non-traditional business model? Contact the Editor: firstname.lastname@example.org