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Lloyds are actively engaged in the Lexcel process. HSBC have recently started to look at
the sector again after many years of showing no interest, reflecting on a degree of progress
here.’
What accounts for such different bank experiences? It can partly be attributed to changes
within the banks that have reduced their institutional knowledge of the legal sector. But
where firms can find a way to engage their bank, as they would their insurance broker or
underwriter, then the relationship improves. The financial discipline provided by the bank is
helpful too.
This was Roe’s experience when setting up his firm: ‘I really had to hone my business plan
in advance and know inside out what I wanted my business to offer and how.’
IN THEIR OWN WORDS
Barclays
Professional Services is organised as one of the bank’s ‘industry teams’. The nationwide
team is headed by Andrea Delay, whose background is in corporate and investment
banking, though the email address given with her profile is a generic one.
Lloyds
Relationship managers for law firms are Lexcel-trained. The bank says relationship
managers can access a support team whose members have been trained in the SRA
Accounts Rules.
RBS
Royal Bank of Scotland promises ‘named contacts’ with specialist training: ‘Whether you’re
looking for a home for client funds or searching for a long-term funding solution, RBS can
help build a tailored approach – not an off-the-shelf product.’ Relationship managers are
accredited by the Chartered Banker Institute.
Santander
Professional services offering is subsumed within general business banking.
NatWest
Promises a UK-based ‘dedicated telephone and processing service’, and, ‘face-to-face
meetings with our experts and… guidance from our dedicated relationship managers. Their
in-depth knowledge spans the sector, with insight into the business needs of chartered
surveyors, legal practices, professional accountancy firms, architectural practices, brokers,
insolvency practitioners and investment managers’.
HSBC
Groups professional services firms together, noting its commitment to serving ‘all business
models, from traditional partnerships to publicly listed companies’. It adds: ‘We provide a
money management platform, a partnership for IT leasing and a programme of information
and networking events.’
Williams alludes to a real shortcoming in the business planning of many firms that are
seeking to appear trustworthy and credible to their bank: ‘We have a crisis in succession
planning and banks are nervous about funding the smaller practices, particularly when
younger potential partners no longer want equity.’
Marston says: ‘Solicitor firms should keep the bank informed of what’s going on, seek
meetings proactively, share bad news as well as good – and in a timely fashion. Bankers
don’t like surprises. Don’t be surprised when a banker asks you for forecasts, not just
historical financial information.’
He asks firms facing a sceptical bank: ‘Would you drive your car by reference only to the
rear-view mirror? Ask your bank about its appetite for lending to the sector.’ Banks set
specific lending policies for sectors that are important to them, he notes, adding: ‘Solicitors
firms are usually important, not so much for the lending done, but for the value of client
account balances. Some banks use a “traffic lights” system. Does your bank classify lending
in the legal sector as green, amber, or red?’
LawNet member firms typically have turnover of between £1m and £25m – a grouping used
by some major banks in categorising law firm clients.
A bank engaged with the legal sector will also have views on certain parts of the legal sector
economy. ‘In summary, all banks are very nervous about changes affecting specific
disciplines [such as] crime and PI,’ Williams concludes.