Fowlie: Invaluable advice from Livingbridge
The largest family law firm in the country is to pilot an unbundled service and offer clients more holistic support as part of a move to widen the current offering, its executive chairman has revealed.
Ken Fowlie said Stowe Family Law would also investigate international expansion with the support of its new owner, Investcorp.
The Bahrain-headquartered global alternative investment manager acquired Stowe last month from Livingbridge, which bought the practice in 2017.
It has since quadrupled in size. In 2017, Stowe had around 100 staff operating in 10 offices. It now has nearly 400 staff in 90 locations, boosted by four acquisitions in the last two years.
From a turnover of £9m in 2017, it was £37.7m in the year to 31 March 2024, mostly the result of organic growth that was particularly sharp in the last 12 months. From 132 lawyers (full-time equivalents) in 2023, it had 180 a year later.
In an interview with Legal Futures, Mr Fowlie said this was the result of “developing a model which we think is scalable in a sustainable way, and is really about how we attract clients to the firm through our digital presence, and then how we attract, develop, retain and support really good people to support those clients”.
Most lawyers, the large majority of whom are women, work flexibly from home, with access to serviced offices: “Our job is not to run property. Our job is to deliver excellent legal services.”
Stowe sees plenty of room for growth – it estimates that it has less than 5% of the very fragmented family law market.
But its digital marketing is clearly effective. In the year to 31 March, it generated more than 65,000 client inquiries. By way of comparison, this is twice the number that National Accident Helpline, one of the top personal injury brands, managed in its last financial year.
Mr Fowlie described Livingbridge as “a brilliant investor for the business and they really worked incredibly constructively with the management team over a lot of years” to get them to where they are today.
He revealed that all of Stowe’s growth during the seven years of Livingbridge’s ownership was self-funded but the firm benefited “massively” from the advice it was able to provide on running businesses, as well as access to the know-how of other companies in its portfolio.
“At different points and with different challenges, we were connected to portfolio businesses that had either gone through what we were going through or had similar challenges…
“When you’re dealing in a portfolio of that size and diversity, you’ve got bigger businesses in particular that can talk to you about how they’ve done things and it just helps you enormously.”
Livingbridge also understood that “businesses are not spreadsheets, particularly people businesses”.
Mr Fowlie said it was unlikely that Stowe would be in the position it was today without “the discipline and contribution that came from having an external partner”.
This is his second experience of external ownership, having been part of the Australian Slater & Gordon that became the first law firm in the world to go public, before it made its initially successful but ultimately disastrous foray to the UK.
“Even in the public markets context, investors provide a lens and a perspective on your business which is always really interesting and challenging.”
Investors evaluate performance against comparable businesses, rather than comparable law firms, he explained. “It gives you a real discipline to think about your business in the context of what is a good business as opposed to what is a good law firm.”
Livingbridge was always going to exit and Stowe’s previous strategy ending in March 2024 meant it was “a logical time” to consider who was going to back the next stage, dubbed ‘Stowe 3.0’.
The idea of being sold to an owner the firm’s management did not want was an initial concern for some, Mr Fowlie admitted, but he considered it a theoretical, rather than practical, risk.
“The reality in these processes is that you go to the person who has a really high level of conviction – and you don’t have a high level of conviction as an investor unless you build a positive chemistry with the management team.”
So, with a new investor in place, what does Stowe 3.0 look like?
First, it aims to grow market share. “There are still parts of the country that we don’t service as effectively as we might,” Mr Fowlie said.
This is where acquisitions – which have not been a huge part of the journey to date – may come in. The most recent deal, for Hawkins Family Law in Milton Keynes, is an example of this.
Mr Fowlie explained: “It was a part of the world that we’d seeded the location, we were growing organically, but the opportunity to plug in immediately a whole group of really high-calibre lawyers who were already established in that market, was really attractive to accelerate the growth of the business.”
Second, Stowe is looking to offer divorcing clients more than legal advice. This reflects the fact that its success to date has been based on quite a traditional family law service, overwhelmingly delivered on hourly rates.
“Thinking about how we can provide a more complete solution to our clients in terms of the need they have at that time in their life is definitely something that motivates us as we move forward,” Mr Fowlie said.
The firm has begun connecting clients to divorce coaches, for example, “but given the position we occupy in the market, we think there are both obligations and opportunities for us in terms of providing a more holistic service”.
Related to this will be more work on alternatives to traditional divorce services, with competitors such as online business amicable, which is not a law firm, offering a different approach. “There’s been a clear shift with a lot of clients preferring resolutions that are less antagonistic, more amiable or more consensual,” Mr Fowlie said.
Then there is what Stowe is calling ‘guided family law’, an unbundled service “where people can pick and mix the support that they need”.
More technologically savvy clients are “looking for ways in which they can take more control of their own process”, he added.
The firm is launching a pilot shortly which will test some of the common issues that come up with unbundling, such as operating on a limited retainer and the interaction with professional indemnity insurance, although Mr Fowlie said it helped that family work was generally at the lower end of the risk scale.
So, while part of Stowe’s future is simply doing more of the same, “it’s also being responsive to the market and developing propositions which might be more innovative and reach a part of the market which feels like it’s not being as well served by a traditional offering as it could be”.
No law firm owner right now can escape the question about the role of artificial intelligence (AI). At the moment, Stowe mainly uses it to support marketing, but Investcorp was “very keen to work with us on looking at how technology generally can support a better colleague and client experience”.
It is “inevitable” that AI will play a part in this. “I’m expecting that there’ll be opportunities in the back and middle office where a more intelligent technological platform will be able to automate and do things which we are currently applying manual resource to.”
It could also be valuable in analysing and generating insight from the unstructured data that law firms collect.
Mr Fowlie anticipates that Investcorp will provide the same benefits that Livingbridge did in terms of support, while also taking advantage of its international footprint.
Does that mean international expansion? Client needs in family law were not especially different in other parts of the world and the legal markets were similarly fragmented, Mr Fowlie said.
“We think there are elements of the capabilities we’ve developed which would also resonate in other markets. While at the moment our plan is very much to grow our business in the UK – and there’s masses for us to go after – it’d be shortsighted of us not to think about whether or not there are opportunities for the business beyond the shores.”
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