Making profits, from Big Bang to bust

Jonathan Silverman (on the right in the picture)became a partner at Alexanders, a small commercial law firm, aged just 31. But he decided to quit and start his own firm. "I felt that many commercial law firms had the wrong approach. They were too busy being lawyers and forgetting to provide a practical service to businesses."

Silverman didn't have a lot of capital, but in 1981 it "was very easy to set up a law firm today, all of the compliance requirements would make it a lot more difficult".

He rented a small office and began looking for clients. Silverman tried to be different not just by explaining a client's legal situation clearly in black and white, but by using his legal knowledge to give specific business advice. For example, in 1983 he won a contract with an American maker of reading glasses. "They wanted to break into the British market but were prevented from doing so by National Health laws."

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At the time, British laws restricted the sale of reading glasses to UK opticians. So Silverman scoured the rules and advised the firm to start selling its wares in British stores such as Debenhams. The firm sold large quantities of the glasses before they were eventually punished and fined. "It was a calculated risk. Even after it paid the fine the client still came out with a profit."

Following the case, Silverman and his client lobbied the UK government and eventually forced a change in the regulations. Meantime, having spotted a profitable niche, in 1983 Silverman took on Chris Sherliker (on the left in the picture), an expert in EU competition law, as an equity partner in the firm.

The new firm, Silverman Sherliker, immediately took advantage of a change in the law in 1984 that allowed lawyers to advertise their services for the first time. The pair booked a quarter-past midnight advertising slot on London's LBC radio the day the new law came into force. "Being the first to advertise meant we got a lot of media attention and we were interviewed by the BBC the next day."

Another boost came from the deregulation of financial services in the Big Bang' of 1986. "We helped stockbrokers looking to sell their business. It was a time of great change and disruption, and they are always good times for lawyers." The pair began taking on more lawyers as the business expanded.

"Our approach was to bid for work in new areas and once we were sure that we could guarantee a steady stream of business we would hire an expert in that area to work for us." When the financial boom turned to bust in the late 1980s, the pair moved quickly to protect their business. Knowing that bankers were being laid off in droves, they hired models to hand out leaflets in the Square Mile offering help with dismissal and compensation claims.

Their advertising stunts didn't always go down well with more traditional peers "they thought we were brash upstarts" but it helped the firm to survive the recession of the early 1990s. They also attended trade shows and spoke at conferences while branching out into new areas of law such as probate and inheritance tax. The firm now has 16 partners and last year revenues hit £3.2m. Managing that growth has been a challenge however, Silverman, now 62, is confident that growth will continue.

In the print edition of MoneyWeek, Chris Sherliker's name was misspelt. We apologise for the error.