No names, no egos: meet the saint of advertising

The Most obvious difference between St Luke's and its rivals in the advertising business is the name. The organisation that Campaign, the industry bible, last week ranked runner-up in its latest agency of the year poll stands out for not bearing the names or initials of its founders.

But chairman Andy Law and his colleagues stress that the distinctions do not end there. Not only is St Luke's based outside the "media village" of Soho and Covent Garden, it is owned by all its employees rather than a handful of entrepreneurs.

Although some rivals still sneer that being a co-operative means they are all members of a Moonie-type religious sect and sit around on bean bags, Mr Law insists not a single client has been lost since the breakaway from US agency Chiat Day in October 1995. More surprisingly, given the rate at which advertising personnel tend to change jobs, only one of the original 35 staff has left - and that, says Mr Law, was because he did not like an organisational structure which meant he had no office.

In its first year, St Luke's won renown for its "Chuck out the Chintz" campaign for Ikea and also handled the accounts of such high profile names as Midland Bank, Eurostar and Boots. It was so successful that employee numbers have swollen to 55, with another 20 budgeted to arrive at the former toffee factory near London's Euston Station by the end of the year.

Mr Law insists he is not running some sort of business utopia and says that some "known problems have been replaced by unknown ones".

In particular, there is the issue of managing an organisation in which everybody has a real ownership stake. For the moment, St Luke's has opted to have the day-to-day management carried out by department heads. Meanwhile, a body called Quest - made up of five elected employees including Mr Law - does the "soul-searching", and another one called Treasury looks after the financial aspects.

The co-operative ethos is tempered to the extent that while everybody - from receptionist to creative director - is an equal owner, people are paid according to their roles, experience and the market rate.

But the revolutionary feel, in what Mr Law insists is a much more conservative industry than is generally realised, continues: no one has a desk and not even the chairman has a secretary. Instead, there are large rooms devoted to particular clients and various places in the building - from the quiet "chill-out" room, through the staff restaurant to computer workstations in corners of the open-plan floors - where people can work. All employees have their own mobile phones so they can be contacted wherever they are in the building.

The idea, says Mr Law, is to get away from the school-style atmosphere of most offices to something more like university, where students can work how and where they like as long as they deliver the project.

The same sort of thinking was behind the choice of agency title. After deciding against founders' names, Mr Law and his team likened themselves to the medieval guilds that adopted saints to give themselves a push. St Luke was chosen because he is the saint of creative people.

Mr Law and some of his cohorts had made progress with these ideas several years ago, when they worked in the London office of Chiat Day. But just as they were about to start putting them into practice, the company was sold to Omnicom.

Mr Law, then managing director of the London operation, refused to go along with the deal and invited everybody in the office to join him in leaving. Once they had done that, he says, they got rid of the greed and envy endemic not just in advertising but a lot of other industries.

And now it has made some progress in this experiment, and seen how employee involvement has improved the work produced, St Luke's is spreading the gospel. It is joining the New Academy of Business, a network set up under the aegis of Body Shop founder Anita Roddick, and signing up for a rigorous social and ethical audit that will take Sustainability and the New Economics Foundation, two specialist organisations, most of the year to conduct.

"We realised that if we were not careful, it would become a fantastic love-in," explains Mr Law, adding that St Luke's wanted to contribute to the debate about the future shape of business. It is intended that the audit - which will examine areas such as the agency's relationships with suppliers and how it trains its employees - will focus attention on doing things "because the business is changing rather than because we're nice guys".

Other participating organisations have tended to be manufacturers, which can more easily quantify their effects on the environment and the like. But Mr Law feels it can affect the way business is run. For example, the agency is passing up the opportunity to earn large fees by refusing to work on tobacco accounts, and to a certain extent it is screening the ethical policies of would-be clients - though it is wary of becoming too "PC" and getting away from the irreverent spirit of advertising.

In particular, Mr Law sees a chance to change "the DNA of business" so that companies get back to the idea that it "exists for people" rather than purely to maximise shareholders' returns.

His commitment to this idea was not welcomed by employees when, just before Christmas, their hopes of a large bonus were dashed. But he argued for more modest earnings, on the grounds that as much profit as possible should be invested in the future.

"It was real medicine," he says, adding that people have since told him he was right.