Karen Holden founded A City Law Firm being disillusioned with the City. “I always thought I’d be a solicitor doing the best I can. But I became so disillusioned with the industry. It was all about targets and numbers, there didn’t seem to be client care, and it wasn’t enjoyable anymore,” she says.
“I don’t know if I was nutty, brave or naive but I decided to start up on my own,” she adds. Holden wanted to spend more time with her family and travel more, but she also wanted to keep working at the breakneck pace she was accustomed to in the past. “I work a lot more hours than I did before, but they’re my hours, and I can work around my priorities. It hasn’t been easy. There have been a lot of bumps on the road, but it has made me a better lawyer and a rounded person.”
She founded A City Law Firm seven years ago, carving out a niche by advising entrepreneurs and start-ups, and winning industry awards against longstanding heavyweight firms. Holden’s drive to succeed stems from being raised on a tough council estate, where her mum worked three jobs as a single parent. Driven by ambition for a better life, she secured a scholarship to study at Cambridge and then went on to work as a senior criminologist before qualifying as a solicitor.
After all the ups and downs, Holden is now at the helm of a million pound company she founded and funded herself.
Building a flexible company culture
Holden started out on her own, but eventually brought along staff who used to work for her. “I brought in a trainee solicitor, a bookkeeper, then it grew from just two, then three, then four of us. We then took our own floor, and now our own building with the 13 of us,” she says.
“I suppose the biggest journey is employment. I learned really early on that you have to get the right people who fit your work culture. I’ve had some bad eggs along the way that can upset the staff and clients. I’ve also had some greedy people who think they can sit here and take, take, take. At the same time, you don’t want to lose good talent. Some of my team has stayed from the very beginning, and most others have been with us for four years.”
While honing her hiring skill, Holden realised that investing in talent is as good as investing into the company. “I realised that you’ve got to get them as paralegals and train them up, and keep your culture going. They’ll invest you as you invest in them,” she explains.
To keep that company culture going, Holden says she sells the culture to potential recruits when interviewing them. “Don’t come aboard unless you can embrace it,” she adds. Her team consists of mums who want to work certain days, dads who want to start or end early to do the school run, single people who want to go out more, and those who want to work longer to earn more money.
“Not everyone is driven by the same things. I took a whole day out to understand the team’s motivations. For example, one of our team members wanted to run more social events, so we decided to make them social secretary to plan more outings and events for team morale. Some wanted more annual leave, so we decided to give everyone five extra days, and the option to buy annual leave if they work over and above,” says Holden. “We have mums that job share, and dads on paternity leave who’ll check in from home on occasion. It’s a mix of all kinds of things, and that’s how it should be if you want to keep your team excited to come in everyday.”
Managing cash flow: a painful lesson
Holden admits that she wishes she knew when she started out what she does now. “The number one killer of business is poor cash flow. I learned that the hard way. Everyone wants to land bigger contracts, but many times, these clients pay you little up front and the rest after. That sounds great, but it’s harder to manage than you’d think,” she says.
Understanding the firm’s expenses and having a strong monitor of the clients would have been sensible, she adds. “There were times I was paying salaries on credit card, and extending credit to clients, when I really couldn’t afford it. But it’s good that I went through that. I learned from all of that, and realised that I needed a really good accountant to bookkeep and manage VAT.”
She also invested in a good web designer to get her public face–her website–up and running.”Ultimately, that’s what’ll bring my traffic in. You can’t underestimate just how important a good website is for business.”
As a lawyer, Holden had a huge advantage when starting out. She managed to get out of potentially damaging business relationships early on. “I often tell my clients about the importance of having really good legal documents. I was going to set up with other people, but I quickly realised they weren’t genuine and wouldn’t work well with me. Because I had a really good agreement, I could get out of that potential mistake.”
Making the most of the recession
When Holden started up, she initially had a small number of clients, which was just enough to keep her going. But then the recession hit, and it was the best thing to happen to her, she says.
“Clients who were paying big money to big firms started cutting back and came to me. When the recession finally ended, they realised they didn’t need to go back to the big firms. In a way, we were punching above our weight. The post-recession mindset is very different. People now want value for money rather than just a big label. They realise that you don’t have to go to big law firms and pay £700 an hour to get the same work done,” Holden adds, laughing.
She also explains that A City Law Firm’s business model differs widely from the traditional one larger firms hold on to. “There’s something they do which I personally just don’t believe in. Many firms will work for free in exchange for some shareholding. I don’t agree with that. If the clients don’t like their lawyer, they won’t be able to fire them. How can they act in your best interest if they have money invested in you? I think the only way they can drive you forward is by being behind you without muddying the relationship.”
A City Law Firm offers fixed fees, funding options, larger all-encompassing packages, a free hour, and other unconventional ways of commodifying legal services, which gives its clients, who are mostly cash-strapped start-ups and growth businesses, the flexibility and value they need. “We give our clients all the pros and cons, so they can choose what they want and we’ll introduce them to people we trust, our preferred partners. I think that’s what law firms need to do more of; we need to maintain independence from our clients, make them fully aware of their options, and let them know they’re supported.”
A City Law Firm started off with very loyal clients, Holden says, and the firm’s work within the LGBT community was a huge catalyst for growth. Seven years ago, a firm dedicated to advocating and supporting LGBT clients was very unique. “We were one of the pioneering firms doing it, and as a result, we have a whole section for the community, which has slightly different needs, networking, and business cultures,” she explains. Close to 50 per cent of business came from LGBT cases, and that also helped bring a lot more high-level business to the firm. “Now our company works heavily in innovation and the start-up world, so that has taken over. Again, seven years ago, a small company couldn’t afford more than £300 pounds a year for legal services, but now (many start-ups) are worth millions now, so that’s changed.”
Diversity: the eternal question
Holden believes that being a woman, a lawyer, and a business owner aren’t separate things, and neither should they be. “I never stop working. I want to set an example that being a wife or mum doesn’t make a difference. I love travelling, so if I can go away for four or five times a year, that’s heaven for me, but I can take work with me. The staff sees that you can have it all,” she says.
But can you have it all? With women making up around 23 per cent of leadership roles in finance, the sector has come under a lot more scrutiny in recent times for its lack of diversity. “I talk about being a mum and balancing work all the time, but it’s a bit irrelevant, isn’t it? I consider myself a practitioner than a woman. Yes, I want to show I can do the work. So what if you have a husband or child? It’s normal,” Holden adds.
When starting up, Holden became pregnant which she says was very stressful. “Honestly, it wasn’t easy at all. I was one of those women who was very sick in the early phase of my pregnancy, so I was trying to hold my own. Not many people knew I was off on maternity leave because I managed it well, and I came back after enough time, which I needed and enjoyed,” she says. “That said, two to three years ago, I didn’t promote I had a child. I didn’t tell my clients, because I suppose I thought they’d think I’d be a weaker lawyer for it. But now, it’s different. And that’s good.”
If you want equality between genders, you should engage men, Holden explains. It’s the same when wanting equality for gay people, she says. “You need to engage the (dominant group) to see actual change. I remember when I was attending a gay men’s networking event and I wasn’t allowed in. Apparently, they only let gay men in for something that was meant to open up the community and bring down barriers. That doesn’t make sense!”
“We think we have it bad as women, but what about transgendered people? The City has no clue how to be inclusive. We’re not there yet. Transgendered applicants have to explain why all their qualifications and paperwork are attributed to their previous identity, and that’s hard enough. Having to deal with prejudice is a another barrier. And lesbian couples taking their kids to school can get still kicked out. Many women and men are still in the closet because the City just doesn’t get it,” she says.
Holden holds diversity very dear, which is why she doesn’t shy away from voicing her opinions and speaking publicly about the need for inclusivity and diversity, not just in terms of women or LGBT employees, but also in terms of involving people from less privileged backgrounds–something she identifies with.
“There’s an assumption that to be a lawyer, you have to go to university and do an LPC (legal practice course). There aren’t any grants or scholarships anymore, so only the rich people can afford it. So you’ll see the same type of people who grew up with old ideologies enter the sector,” Holden explains.
Education should be accessible to everyone, she adds, remembering how she started out. “I had no money and I had to work for it, but at the time, it was accessible for me, because I had a grant. Now, kids who can’t afford these courses are going to come out with huge debt.”
Holden believes that larger firms still prefer Oxbridge graduates, which inevitably fuels another diversity issue.”I mean, they can go for it. That’s fine. In the end, clients like their lawyers to be from all kinds of backgrounds, and that’s what I look for when I hire. Allen & Overy can fill themselves with Oxford and Cambridge graduates, but I want women, men, working class, middle class, English, non-English–everyone and anyone who can do the job.”