Editor's Letter

IN THE last issue I mentioned meeting the team in charge at the new London base of US class-action firm Cohen Milstein Hausfeld & Toll. Now the firm has hit the headlines nationwide, announcing it will pursue collective action on behalf of any consumers affected by the British Airways and Virgin price-fixing incident.

The UK’s Office of Fair Trading (OFT) and the US department of justice (DoJ) have hit BA with fines totalling some ₤270m for its part in the affair – a record ₤121m in the case of the OFT. Virgin escaped the fines by blowing the whistle on the discussions but will still be included in the suit, while British consumers will also be able to join the US class action.

But with the prospect of a lengthy legal process, a further fine relating to cargo flights from the European Commission, and rumours current BA senior executives are also set to be embroiled, the effect on reputation could be just as damaging as the financial penalty.

Of course the crucial importance of preserving reputation will not come as anything new to law firms, but the increasing regulatory burden means the challenges are mounting. One wonders how many managing partners feel they know most of what is happening throughout their organisations at any given time? With sprawling, increasingly international office networks; highly-pressured employees (some might argue overworked); and practice groups intently focused on their own activities and profitability, truly thorough supervision might seem all but impossible. This doesn’t make it any less essential though.

Competition in the airline industry has soared in recent years. The advent of ‘no-frills’ travel options and ongoing expansion of the internet gives consumers a vast choice over when and how they fly. With the likes of Ryanair and easyJet waiting in the wings, the real question is what effect, if any, the revelation will have on BA’s customer base. Likewise, how many people would trot down – or indeed log on – to Tesco for their basic legal services if worried they may receive anything less than the service excellence, value for money, transparency and integrity they demand?

On a more positive note, however, a firm’s reputation can be boosted as well as preserved. All publicity is not necessarily bad publicity, and carefully co-ordinated marketing drives can produce results in this competitive market: the ultimate goal, of course – a widely recognised and respected brand. In this issue of Managing Partner we look at a number of firms’ efforts in this regard. Strong brands are hard to come by, but tight and targeted marketing, coupled with ongoing client communication, can achieve a great deal.

But once a brand becomes established the difficulty then switches to controlling it – an even bigger challenge when more and more business activity is being conducted online and on the move. Some may even be unaware exactly how their identities are being brandished. Virgin Media and Vodafone recently withdrew adverts from social-networking site Facebook after finding they appeared on a page featuring the British National Party. A Vodafone spokeswoman said the company did not “support particular party political interests”, while Virgin explicitly highlighted the need to “protect its brand”.

Richard Brent

Editor

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