As a very long established and well-known firm, working from a single office in the North of England, this company had 5 partners, two of whom were approaching retirement. Turnover was under £2 million and profitability around 25% below the benchmark, with borrowings of around two months’ turnover. The retirement of the senior partner prompted the remaining partners to review their options, one of the partners finding us via our website.
Firstly the client wanted to achieve a clear sense of direction. Then they wanted the strategy delivering.
To achieve this we started with analysis and interviews. We gathered all of the facts and opinions about the firm, and followed this up with a facilitated partner retreat, covering all of the available options. The partners decided that the initial preference would be to remain independent for a few more years and look for additional potential partners (including two strong internal candidates) whilst they strengthened their position.
Our analysis of the situation showed that they were very good lawyers indeed in all of the main disciplines, but that a collective lack of confidence had inhibited them from becoming as strong in business development and financial management.
To assist we:
- Designed and delivered a training, coaching and mentoring programme to improve the quality and quantity of work intake amongst all fee earners
- Introduced better financial and management information, particularly directed at turning effort into recorded time, and work in progress into cash
- Acted as project managers and overall strategic guides
After a year of consolidation which produced better turnover, better profit and much reduced borrowings, but no net increase in fee earning staff, the partners decided to consider the option of finding a merger partner. We:
- Made contact with a small number of other firms who we felt would be compatible with our client partners
- Held discussions with two firms which progressed to a significant extent but ultimately proved unsuccessful
By this time our work with another, larger and ambitious client had reached the point where they were considering potential acquisitions in an adjacent location. We introduced the two clients to each other and they hit it off. We helped the negotiations progress to the point of a very successful merger. We were trusted by both parties to act as “honest broker” at crucial points.
All parties have been absolutely delighted with the conclusion and the combined firm has gone from strength to strength. We have never known such a happy set of clients – the ultimate in client satisfaction.
The author of this article is Barry Wilkinson of Wilkinson Read. Barry can be contacted at barry.wilkinson@wilkinsonread.co.uk or 07711 665858. Other members of ALFMA can be contacted here.