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Finance industry hunts for law firm partnerships
As the economy comes to a halt, many in the finance industry believe now is the time to forge partnerships with the legal profession.
The New Lawyer
WORKING with solicitors can be difficult at the best of times, but as the economy comes to a halt, many in the finance industry believe now is the time to forge stronger partnerships with the legal profession. Speaking at the 2009 Sifa conference, Jasper Berens, head of UK retail sales at JPMorgan Asset Management, said the legal world was experiencing just as much volatility as the Independent Financial Advisors (IFA) sector, reports Citywire. As the IFA firms were suffering the effects of the stock market crash, solicitors were enduring a savage downturn in property markets, deeply affecting their profitable conveyancing and corporate work. However, Berens argues that IFA firms which survive past 2012 will not only emerge stronger and with an historic opportunity to increase market share, but they would do so with a potentially more supportive legal profession with which to collaborate. “Solicitors are learning that their relationships with IFAs are important,” said Berens, as they identified the huge demand for investment and financial planning that required legal support. Berens said this was great news for IFAs who would do well to leverage their legal connections, pointing out that although three million people do not take financial advice 95 percent have access to a solicitor. “IFAs and solicitors increasingly looked a complementary fit in terms of their business models”, he said. “It’s a great paradox. They [solicitors] have a transactional relationship with clients and yet they have a long-standing relationship up to their death.” Ian Muirhead of Sifa, an organisation that supports IFA’s working with solicitors and accountants, urged advisers to drop old preconceptions about solicitors. “There is too much of a hang up with referrals. That assumes a hands-off relationship whereas in fact you need to get much more active. Treat the law firm as the first client.” Richard Shanks, of PFC East Midlands an IFA, said solicitors don’t understand how IFAs work and that frightens them. He suggests that IFA’s have a single point of contact within the firm to deal with solicitor partners. Sifa and Berens have also compiled a list of suggested methods to improve the relationships between solicitors and the firms. JP Morgan's list recommends a fee based agreement as opposed to a commission based agreement, which is common in financial practices. It recommends work with equally qualified practitioners, and clearly stating what each practitioner’s role within the overall business is and what it encompasses. JP Morgan's Sifa and Berens said firms should understand the needs of each other, "it's not just maximising benefits but explaining risks", communicate frequently, and "it’s very important to report back on client arrangements-solicitors want to be seen as equally involved".
