Full-time advisers guide small companies through a maze of legal changes

by Michael Herson

Since Labour came to power in 1997 there has been a dramatic increase in both the volume and breadth of employment law legislation. Landmark bills on working time regulations, the minimum wage and trade union recognition have not only increased complexity but made it harder for companies to keep up to date with law changes.

With the maximum basic award on lost tribunal cases increased from £12,000 to £ 50,000, companies are having to focus more on compliance.

Although much of the employment law advisory market is still dominated by locally provided legal and personnel consultancies, there is a growing move to a continuous unlimited service available for a monthly fee, delivered via the telephone or by personal visits.

This is an alternative to an in house personnel manager for smaller companies. For larger companies, which may not have specialist legal skills within their personnel departments, it can be a useful back-up.

A typical five-employee business taking a basic service would expect to pay around £ 40 a month while a 10-employee company would be charged around £ 60 a month. A more comprehensive service suitable for larger businesses wanting more on-site support will typically cost around £ 200 a month for a business with 25 staff and £ 325 a month for a business with 50 workers. The three leading players in the UK market are Peninsula, IRPC and Mentor.

Gill Howells, division director of Mentor, estimates the markets totals £ 4bn for professional advisory services across Europe.

John W'ilson, director of IRPC, which shares market leadership in the UK with Peninsula, says: "Its a tidalwave driven as much by the EU as anything else, as well as by employee recognition of their new rights."

Wilson sees new legislation as an opportunity for companies to, strike a balance between the rights of employees and the needs of their business". Companies that comply can gain a competitive edge.

Peninsula believes strongly in telemarketing while IRPC and Mentor have both developed marketing partnerships with banks and insurance companies.

Mentor is a division of the Royal Bank of Scotland and Howells admits that 80% of its 2,500 clients are the bank's own customers. IRPC, part of Croner, has formed strategic alliances with the other leading Scottish bank, Bank of Scotland, as well as with Lloyds TSB.

Annual fees vary according to payroll and size of the company. Customers sign a three-year contract, with 80% renewing at the end of the term.

Peninsula acts as a "sounding board" for the DTI while legislation is being drafted. It targets the increasing number of companies which are under threat of a tribunal from an employee and runs about 60 seminars a year in conjunction with local firms of accountants. IRPC similarly promotes its tax investigation service to accountants.

According to Sue Whittle, Peninsula's senior employment law specialist, customers are not only facing higher volumes of legislation but also the complexity of new laws. "its not a question that SMEs can't understand the legislation, they haven't got time to assimilate it:' she says.

Urban Splash - an SME specialist in residential and commercial loft conversions - has been a Peninsula client for three years.

Fiona Woodward, director of sales and marketing, dearly sees the benefits. 'For a new company like ourselves, having to take on a number of employees and realising that wasn't within the company, professional employment advice is essential," she says.

Maurice Taylor of Chardon Leisure - a Mentor client in the hotel and restaurant business feels the service allows time to focus on business growth. "This type of outsourced service is essential to the entrepreneurial company, allowing it to focus on enhancing revenues and profits, rather than looking over its shoulder to ensure it is up to speed with latest legislation."

Whittles staff must demonstrate "not just a knowledge of employment law, but also an understanding of the business environment" is moving more to the "dedicated advisor" concept, using a named contact to avoid the frustration of discussing the same query with different people each time.

Wilson adds: IRPC seeks to recruit people with a sound technical background, who are also good at providing solutions."

Peter Done, Peninsula managing director, who with his brother Fred owns Britain's largest firm of independent bookmakers - Done Brothers - entered the market after an employee took the brothers to a tribunal in the 1980s and won.

With the three leading players having accumulated nearly 14,000 clients between them, they now seem set for a period of dramatic growth as demand for their services increases.

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