Expert advice from the South East’s leading commercial law experts
Across the South East, and nationally, many businesses face ongoing pressures as inflation remains at levels unseen for decades and the cost-of-living crisis deepens. All of this comes at a time when SMEs are having to consider how they can harness new technologies, including artificial intelligence (AI), while also fending off threats such as cyber attacks and tougher trading conditions of post-Brexit Britain.
James Bullock, a partner and head of Corporate and Commercial at Brachers, explains that, consequently, investment in cyber security remains of high importance for SMEs, given the impact a breach could have both in terms of reputation and financial damage. He adds that some South East businesses are also finding it tougher to access capital. “When coupled with higher interest rates, it can be difficult for companies to invest in the technology or software they need to grow their business,” observes James. “Companies wishing to access green finance/sustainable finance options should review how their ESG and sustainability credentials stack up against the expectations of investors. Thankfully, despite the tough economic conditions, the businesses we work with are very entrepreneurial and find growth opportunities in the turbulent market.”
Based in Maidstone and Canterbury, Brachers provides a full range of legal services to businesses. The firm’s Corporate and Commercial team are recognised as heavyweights in mergers and acquisitions, sales, management buy-outs, private equity, joint venture arrangements, partnerships, and restructuring – and work closely alongside other teams, including Employment and Commercial Property, to offer clients a fully integrated service.
Brachers is also the only UK law firm to be a member of the Marcalliance international network – an international alliance of independent law firms covering the world’s main jurisdictions. This, James explains, enables the team to tap into legal expertise around the globe when supporting clients who operate internationally, allowing them to carry out complex cross-border work.
2023 has been a busy time for Brachers’ Corporate and Commercial team, who have been working on a range of transactions for new and existing clients across sectors including renewable energy, financial services, construction and manufacturing. “We’re particularly proud to have supported high-quality care home provider BN Care Group on its ambitious growth plans, helping the business to secure private equity funding and acquire new homes,” says James. “We also recently worked closely with accountancy firm Crowe UK on the complex cross-border sale of DGA (UK) to an international construction consultancy firm. We have continued to work with our international network Marcalliance on several acquisitions of UK businesses for our overseas clients, demonstrating that in many sectors, there remains a willingness for foreign companies to invest in the UK. It’s great to be part of a team of advisors where everyone is working seamlessly together for the client.”
As a mid-market, ambitious and growing business, full-service law firm Cripps is tackling many of the same challenges faced by its clients – an uncertain economic climate, technological advancement, the war on talent, sustainability and cyber security. “We’re lucky enough to work alongside several truly innovative and interesting businesses in the region,” states Victoria Symons, partner and head of Corporate at Cripps. “This enables us to share knowledge and experience to tackle these challenges together.”
In terms of legislative changes on the horizon, Victoria points out that the Building Safety Act 2022 is getting a lot of coverage right now. “The main aim of the Act is to improve building safety, and it places an obligation on property owners for the first time to register all ‘higher risk’ buildings which are in occupation by 30 September 2023 (with a criminal sanction for failing to do so). While the aim is laudable, the drafting is far-reaching, lengthy and technical, providing a thorn in the side of all those operating in the UK’s built environment sector.”
Victoria adds that, in the medium term, most businesses will be affected by the Economic Crime and Corporate Transparency Bill, which is now in its final stages of consideration by the Commons. Once adopted, it will require all directors and beneficial owners to verify their identities. “We’re also expecting new provisions of the Environmental Act 2021 to come into force in November, which will require a mandatory 10% biodiversity net gain on all new developments, and further down the line, expect new proposals around the regulation of artificial intelligence (AI).”
In a firm as dynamic as Cripps, there is rarely a dull moment. “Many of the mid-market businesses we work with are the engine room which drives the economy in the South East, so we are always looking at how we can ‘be the difference’ for them, using legal technology, creativity and imagination to solve their problems and champion their ambitions,” explains Victoria. “A good example of this is using technology to streamline our M&A transactions, increasing collaboration and efficiency to minimise time and cost. We have emerged from the worst of the Covid years stronger than we’ve ever been. We have four ‘pillars of purpose’ on which our business is built – our people, our clients, our planet and our community – and challenge ourselves daily to ‘be the difference’ in each of these areas.”
The landscape for SMEs in the South East has certainly been tough, and this year, Doswell Law, which specialises exclusively in business employment law, has been involved in v company restructurings and redundancy exercises. However, there is light at the end of the tunnel; the team acknowledge that matters seem to be improving for businesses, with a clear focus on recruitment and retention of valuable staff, rather than more redundancies.
Doswell Law’s main focus is on protecting its clients from expensive and time-consuming claims and disputes. Whether an organisation needs help with managing a poorly performing employee, handling a disciplinary, dismissal or grievance process or undertaking a redundancy or restructuring programme, the firm can provide effective advice tailored to meet the particular needs of the business.
Doswell Law has continued to support SMEs in what has been a challenging business environment due to rising energy costs and the negative impact of high interest rates and inflation. “Our cost-effective annual retainer has helped our long-term clients avoid disputes and tribunal claims,” says Henry Doswell, principal solicitor at Doswell Law. “We have recently successfully defended a large logistics company at the employment tribunal in a highly emotive discrimination claim, and supported clients on various company restructurings and redundancy exercises, which resulted in a positive outcome for both the business and its staff.”
Henry notes that the most important upcoming change to employment law relates to the enhancement of flexible working rights. “The Employment Relations (Flexible Working) Act 2023 received Royal Assent on 20 July 2023 and is likely to come into force within the next 12 months,” he explains. “It amends the existing flexible working arrangements and enhances employees’ statutory rights. However, despite media coverage to the contrary, it only gives new employees the right to request a flexible working arrangement from day one – it does not give them a right to have a flexible working arrangement from day one of employment.”
With the amendment, employers still have the right to reject a flexible working request on one or more of the existing statutory grounds. These grounds are the burden of additional costs; detrimental effect on ability to meet customer demand; inability to reorganise work amongst existing staff; inability to recruit additional staff; detrimental impact on performance and insufficiency of work during the period the employee proposes to work. “In respect of this change to legislation, employers should view it as an opportunity to encourage their staff to adopt a more flexible approach to working, provided it supports and enhances their business objectives and helps retain valuable staff and expertise,” advises Henry.
Furthermore, Henry advocates that business owners ensure they have a robust set of contracts and employment policies in place, and managers know how to follow and apply them in a consistent manner. “It often makes the difference between winning or losing an employment tribunal or court claim and provides a good basis for resolving disputes at the early stages without the need to obtain expensive legal advice from solicitors.”
In April, Lesley Rushton was appointed managing partner at Girlings Solicitors, a regional law firm with offices in Canterbury, Ashford and Herne Bay, following the retirement of her predecessor and long-standing colleague Andrew Watson. Lesley, who is a solicitor in Girlings’ Wills, Tax and Estate Administration department, has seen work increase across different departments, covering both business law disciplines and within the Private Client teams. She says: “The last six months have been incredibly busy for the firm outside of our core business work in terms of supporting five trainees and promoting six new partners.”
Earlier this year, five of Girlings’ departments achieved the Legal 500 ranked status for 2023, an independent worldwide client’s guide to the best law firms and lawyers and a quality mark of excellence. What’s more, recently, the company reaffirmed its support for local businesses through the work of the Canterbury Business Improvement District (BID). “We have supported Canterbury BID since its inception, particularly in our sponsorship of its monthly networking events, which bring together local businesspeople to learn about each other’s offerings and foster a sense of community and shared purpose,” explains Lesley. “We think it’s vital to take a lead in promoting this kind of network for the benefit of our city and the people who work in it.”
One theme the Girlings team are encountering more frequently in their work with SMEs is in the area of artificial intelligence (AI). “Big businesses are often perceived as the pioneers of AI, but it is clear to us, and the Kent business community, that small and medium-sized businesses have a lot to gain from this technology and are thinking about the opportunities it offers,” says Lesley. “Our Corporate and Commercial team have recently worked with social media online networking influencers at the cutting edge of this burgeoning technology. They have advised them on how to mitigate the risks posed by AI, both regarding their trade and social media careers.”
In the face of current challenges, such as soaring utility costs, the rising cost of goods and increasing wages, Lesley highlights the importance of reverting to fundamentals, emphasising what makes your business unique, and offering value to clients. She advises seeking specialist advice to ensure that your business and brand remain secure. “As with life more generally, finding a balance between opportunity and risk is crucial. Many businesses will rightly have a strong focus on the exciting opportunities to develop their product or service, enter new markets and delight their customers. However, it is also important to mitigate against risks that may be encountered by securing intellectual property rights, keeping up with developments in employment contracts or managing a commercial lease.”
Clarkson Wright & Jakes (CWJ) managing partner Amanda Mehlin has lived and worked in the South East for over 30 years. She says it has always been, and remains, a fantastic place for SMEs to operate. There is no doubt though that the impact of the pandemic has been significant and tested the resilience of many businesses. “Large numbers of employees have reduced their working days or simply changed careers completely, and many businesses have struggled to recruit and retain the staff they need to operate their businesses successfully,” states Amanda. “We also frequently hear clients complaining about regulatory requirements, which for a small business, can be overwhelming and take away valuable time and resources from day-to-day operations.”
But it’s not all doom and gloom. Amanda recognises that the South East is very much a vibrant hub for SME activity and there are plenty of opportunities for growth, particularly for those businesses who are innovative, adapting their products or services to meet evolving needs of consumers and changing consumer preferences. “SMEs make up the core of our commercial client base and we are able to deal with most issues that might crop up on a day-to-day basis – employment, disputes, property, corporate and commercial work. We also have two notaries at CWJ, which is quite unusual. Our notaries’ main business is to verify the proper execution of documents to be used abroad.”
Like many businesses, digital transformation has been a key focus for CWJ over the last few years. Amanda explains: “When the pandemic came along, we were well placed for staff to work remotely from home and our message to our clients was ‘it’s business as usual’. We had to make some swift decisions around processes and how certain work could be delivered, but our investment in technology up to that point put us in a really good position. That investment hasn’t stopped. Our focus now is on ensuring we can work as efficiently as possible but also ensuring that our IT helps us deliver a truly excellent product and service.”
Another focus area has been staff wellbeing. As a firm, CWJ is committed to prioritising the wellbeing and mental health of all staff members. “It’s embedded in our culture with open and clear communications and an environment where I hope that all our staff feel confident about speaking out,” says Amanda. “Our social committee, wellbeing committee and HR team do a brilliant job to bring everything together, from the provision of fruit every day to a 24-hour helpline, meditation sessions, walking groups and massages.”
Knights is one of the fastest-growing legal and professional services businesses in the UK, ranked within the top 50 UK law firms by revenue. With 25 offices and over 1,500 professionals nationally, including Kent, Sussex and Surrey, it provides a full suite of services to a broad range of organisations, with specialists in all key areas of corporate, real estate and commercial law, as well as synergistic services to high-net-worth individuals.
Andrew Frake, a partner in Knights’ Dispute Resolution team, perceives that the most challenging issue facing SMEs at this time is the rise in interest rates and the impact of the cost-of-living crisis. “Not only does this put pressure on businesses through increased cost of operations, including staff salaries, it also increases the risk of customers defaulting on contracts and payments,” he says. “These businesses are therefore having to make tough decisions on how to handle bad debt. The landscape is also challenging for anyone looking to sell their business. With buyers facing higher interest rates on funds and lenders more concerned with the value of assets used as security, deals are becoming more expensive. Buyers are therefore seeking to drive down prices, with sellers often holding firm in the hope of a drop in the interest rates and inflation, leading to market stagnation.”
The Court system, Andrew goes on to explain, is becoming increasingly challenging. A significant increase in court fees in recent years, delays caused by lack of resource, and a covid backlog means that traditional debt recovery through the Courts is becoming more difficult to navigate. “In October 2023, the Fixed Recoverable Costs regime will also be implemented. Designed to give some predictability to businesses in litigation, it is anticipated that recoverable costs will be lower than current rates. Couple this with the pressures on the court system, businesses may need to think more carefully about how to secure their position, as well as the advantages of alternative dispute resolution processes.”
Andrew’s most valuable piece of advice to business owners is that good debt recovery starts with robust terms and conditions, and putting processes in place to ensure that they are properly incorporated into your contractual relationships. “By reviewing and verifying how you contract with your suppliers and customers, you may be able to avoid disputes and maintain your business relationships. However, when it is unavoidable, your terms and conditions should not put any barriers in the way of rapid and decisive steps to recover debts and enforce contractual rights.” He adds: “For anyone looking to sell their business now or in the near future, focus on getting your business prepared. By reviewing your finances, and cost base, and ensuring your commercial arrangements are in order, you will be in the best position to sell once market conditions improve.”
Offering a diverse range of legal services for individuals and businesses, Thomson Snell & Passmore has a leading presence in the South East, with established offices in Tunbridge Wells and Dartford. Despite being the oldest law firm in operation (with a Guinness World Record to boot), the company adopts a modern, pragmatic approach to delivering expert advice across its practice areas.
Nick Hobden heads up the Thomson Snell & Passmore’s Employment team, which provides specialist, tailored advice to businesses of all sizes and sectors, handling all elements of the employment relationship, including helping to resolve workplace disputes, conducting managed terminations of employees, defending employment tribunal claims, and providing employment contracts, handbooks and policies.
Despite both the employment law and wider economic landscapes becoming increasingly complicated in recent years, Thomson Snell & Passmore’s Employment team have used their experience and expertise to navigate evolving challenges facing businesses in order to deliver the best outcomes for clients.
Nick’s top advice to business owners
- Managing risks of claims from employees is paramount. This means taking legal advice when there is the first sign of trouble ahead. In addition, make sure all employees have comprehensive contracts of employment that reflect their roles and are regularly updated as they are promoted.
- Create comprehensive, up-to-date policies on all aspects of the employment relationship. This includes pension contributions, disciplinary and grievance issues, sickness, holiday and flexible working.
- Implement policies so that they are effective, including providing training for HR teams and employees.
- Ensure that policies are followed in a consistent and transparent manner following implementation so all members of the team are informed and aware.
- Ensure that policies are reviewed and updated where needed. It is often best practice to consult employees and management to identify where policies can be improved.
- It is always prudent to seek professional advice on workplace policies to ensure that they are compliant with employment law and regulations and that these are working with your business seamlessly.