Counsel: The Journal of the Bar in England and Wales 1 March 2008

The growth and expansion of a Chambers is often a far more organic process than for other kinds of professional practice. Nevertheless, when the time comes to attract new barristers to the team, to move to better premises or perhaps just to update existing equipment and technologies, it makes sense to choose a finance solution that allows you to act immediately and spread the cost of your investment over time.

The reputation of a Chambers is more likely to be earned in the courtroom than in its offices, but creating a good working environment and using the very best IT and communication systems are all an important part of attracting not just the right cases, but the best barristers as well. Even Chambers with limited ambitions in terms of growth find they need to invest in offices and equipment if only to maintain their current position and not lose out to competitors. This means looking for (and acting upon) opportunities that exist for improvements, and if necessary, making sound investments in staff, premises, equipment and any other areas that offer the potential for a good financial return into the longer term.

Cost or investment

Of course, with chambers expenses coming straight out of barristers' pockets, investment in business development needs to be carefully managed, but with a suitable finance agreement in place, even considerable costs can be made affordable and show a clear return on investment. Indeed, it is important to view any business development costs in terms of the return they will generate over time. New members of staff, updated equipment, marketing expenditure all offer the potential for ongoing future revenue. And if viewed simply as a business cost, good opportunities for growth can get overlooked and ignored.

For the prudent professional it can seem sensible to wait until sufficient savings have been made, then pay up front for any necessary business expenses. But when good opportunities present themselves, it is important to take the long term view and find a way to afford them – now rather than later. “Development of a Chambers can often be sacrificed because of perceived constraints about affordability,” says Mark Gidge, Director at leading independent finance provider Syscap. “In fact, as long as a good opportunity for growth has been identified and can be quantified it in terms of a realistic return on investment, then there's no need for cost to be a barrier.”

Crunch time

Businesses of all types have always used lending of one kind or another to facilitate business development. Considerable costs can rarely be met using working cashflow, and in any case, this money is best left alone for the day to day running of Chambers. Banks have traditionally been the first port of call for accessing development funds. However, as time goes on this resource is becoming less able to meet the needs of modern professional practices, which quite rightly expect to be able to get finance for a complete range of business requirements.

“Banks have found it quite difficult to adjust to and accommodate more modern forms of business expenditure,” says Gidge. “They quite often struggle with intangibles such as software or training – the everyday requirements of business development.” And there's another reason to look outside the banking system for help: “The tightening of credit facilities is having a major affect on borrowing,” continues Gidge. “Banks are withdrawing much of their lending as they attempt to contain the problem and reduce their own debt.”

Relocation relocation

The issues with banking inflexibility and the credit crunch are encouraging more and more Chambers to look elsewhere for funding solutions, and many are finding the services they need from specialist independent finance providers such as Syscap. This was certainly true of the Chambers of Edward Faulks QC, when it chose to relocate to prestigious and more spacious offices on Chancery Lane. “This was a huge undertaking for us,” explains General Manager Jenny Fensham. “We wanted to change the layout of the building and create several partitions for new offices. We also needed to furnish the entire space, install a new telephone system, update our IT and pay for numerous contractors, suppliers and services to make it all happen.”

Having worked with Syscap before to finance IT, Fensham was already aware of the financial and business benefits of leasing. “For the nature of our business, a lease is the most financially beneficial option,” she explains. “We can claim the expenditure against tax and spread the cost over time.” Fensham researched a range of different payment options, including bank loans, other finance packages or cash alternatives, but Syscap offered the best all round solution. The comprehensive agreement included every aspect of the office refurbishment in a single lease, covering everything from furniture and carpets to air-conditioning and a new telephone system. In addition, Syscap arranged a Professional Interim Finance Facility (PIFF), which enabled the chambers to avoid any outgoings for the first six months of the agreement.

Strategic goals

Growing a Chambers may be a carefully planned, strategic aim. It may be a sudden reaction to market opportunities. It may just be a case of fending off the competition and taking a few steps to maintain a healthy client base. In every case, having the agility and flexibility to act quickly, being able to invest without disrupting cashflow and generating a fast return on investment are all crucial aspects of any development process.

Contact: Syscap

01606 338034, www.syscap.com