There are certain words which you don’t hear very often in day-to-day life;
‘Belton’ – a two-toned dog
‘Belonephobia’ – the fear of pins and needles
‘Aglets’ – the hard plastic bits on the end of shoelaces
‘Bataphobia’ – the fear of passing tall buildings
Part of our work at VG Charles & Co is involvement with discussing strategy with clients; attempts at recruiting the best staff is pointless unless we are able to advise candidates as to why a firm is moving in a certain direction and where they hope to be by a certain point in time.
Recently we were involved in a key strategy meeting with a new client who is keen to make key lateral hires in the coming months to improve their standing within their local market. As a firm they have an enviable brand and are looking to promote this further through attracting talent in a number of areas.
Whilst firms may have a range of requirements there always tends to be one or two fields which are key to their strategic aims. It was during this discussion that another word which you don’t hear very often made an appearance:-
Q - “Which particular disciplines are you most interested in developing and recruiting into at the moment?”
A – “Property.”
Part of the role of a legal recruiter is to remain fully up to date on market conditions; unless we are able to advise our clients on how the market is evolving and where there appears to be opportunities for growth it is likely that our clients will be playing catch-up as their competitors recruit the best talent ahead of time.
The fact that real estate is back on the cards backs up the belief that firms are continuing to see an increase in their transactional business, which not only boosts revenue in this particular area but also as so much of a firm’s other work feeds off the corporate & property teams the impact of additional activity can be seen across the board.
It would be unfair to portray this as confirmation of the new dawn for the real estate market and the return to the golden era that we experienced three years ago. The recruitment of property specialists is still opportunity-driven; not many firms have openings for candidates who not have a portable client base or busy contacts book, but the fact that they are particularly interested in real estate lawyers at all demonstrates a definite shift in market focus and confidence.
Looks like the request for real estate specialists may be about to return to our vocabulary......
Monday, 28 June 2010
Monday, 21 June 2010
To Merge Or Not To Merge.....
If you read the recent legal press the in-vogue trend at present appears to be the merger. Whether it be the international agreement between Hogan & Hartson and Lovells or the ongoing Simmons & Simmons/Mayer Brown discussions right down to the more modest Needham & James/Shakespeare Putsman merger, there is no doubt that firms are looking at pooling resources to battle on a bigger stage to that which they presently enjoy.
According to the Law Gazette (Dec 2009) more than 75% of the Top 100 firms have been approached about a merger, and around 20% of firms have unsuccessfully tried to complete a merger in the previous 12 months according to Smith & Williamson research. The number of large firms expecting more mergers to take place has also increased year on year since 2007. (1 )
However it is not just large firms which are looking at mergers or acquisitions in the present climate. In a period of economic instability, whether it be recession or the fragile post-recession recovery, it’s natural for businesses in any field to look at costs and expenditure, identifying areas where savings can be made.
There comes a point however where it becomes necessary to look at a completely different approach. Due to a huge hike in the price of indemnity insurance the sole practitioner and/or small partnership is likely to be feeling the pinch and some may be looking at other options and considering the future.
One option may be to look at a bolt-on to a larger practice or a merger with a firm of similar size. Bolt-ons are hardly a new thing, with sole practitioners having for years disposed of their client base by amalgamating with a local firm prior to retirement or closing of the practice. Currently though firms are considering this as a cost-effective option, as embracing the economies of scale can reduce the overheads per partner as well as also allowing work to be referred internally and thus maximising the client offering.
However mergers are not always a fall-back option. Whilst there are some firms with well-documented difficulties which have secured a merger, for other practices the merger is an opportunity to enhance the offering which they have. This can allow a firm to move into a new geographical location, to diversify the areas of law that they specialise in, or even to indirectly recruit talent at a competitor.
The result? It is likely to be that in 10-15 years the legal landscape will look very different. Towns which presently have 4 or 5 large firms may be reduced to 1 or 2 major players; an example of this being in Wolverhampton where FBC and Manby Steward Bowdler merged to create one large firm which is far and away the largest practice in the area. Similarly firms who are looking to reach the next level in terms of turnover and headcount can pool their resources, as happened with Shakespeares and Putsmans in Birmingham in 2007 where the new larger practice was quickly elevated to the second tier within the city; since then the new firm have confirmed the subsequent merger with Needham & James with further mergers suspected to be in the offing.
At present VG Charles & Co are speaking with a number of firms regarding merger opportunities on a national level, including brokering meetings between Legal 500 firms. Some of these are practices looking to establish a base in a new city and are looking to do so by linking up with a firm who have a presence in the area; others are practices who can see that the benefits of a merger with firm of a similar ilk to increase their local standing for mutual benefit.
As the market continues to improve the number of firms looking to increase their geographical spread will continue to rise, often by bringing established local names into the partnership as the promise of investment and increased equity proves enticing to firms which have struggled through the recession and realised how fragile the legal market can be for a stand-alone practice.
The golden period of the merger has just begun......
Are you interested in discussing merger/acquisition opportunities in your local area? Are you looking to bolt-on your existing practice to a larger firm, with a loyal client base which can be successfully amalgamated? Contact one of our specialist merger broker consultants at VG Charles & Co on 0121 233 5000 to discuss the way forward. Alternatively visit our website www.vgcharles.com.
(1) http://www.lawgazette.co.uk/news/surge-merger-activity-top-100-firms
According to the Law Gazette (Dec 2009) more than 75% of the Top 100 firms have been approached about a merger, and around 20% of firms have unsuccessfully tried to complete a merger in the previous 12 months according to Smith & Williamson research. The number of large firms expecting more mergers to take place has also increased year on year since 2007. (1 )
However it is not just large firms which are looking at mergers or acquisitions in the present climate. In a period of economic instability, whether it be recession or the fragile post-recession recovery, it’s natural for businesses in any field to look at costs and expenditure, identifying areas where savings can be made.
There comes a point however where it becomes necessary to look at a completely different approach. Due to a huge hike in the price of indemnity insurance the sole practitioner and/or small partnership is likely to be feeling the pinch and some may be looking at other options and considering the future.
One option may be to look at a bolt-on to a larger practice or a merger with a firm of similar size. Bolt-ons are hardly a new thing, with sole practitioners having for years disposed of their client base by amalgamating with a local firm prior to retirement or closing of the practice. Currently though firms are considering this as a cost-effective option, as embracing the economies of scale can reduce the overheads per partner as well as also allowing work to be referred internally and thus maximising the client offering.
However mergers are not always a fall-back option. Whilst there are some firms with well-documented difficulties which have secured a merger, for other practices the merger is an opportunity to enhance the offering which they have. This can allow a firm to move into a new geographical location, to diversify the areas of law that they specialise in, or even to indirectly recruit talent at a competitor.
The result? It is likely to be that in 10-15 years the legal landscape will look very different. Towns which presently have 4 or 5 large firms may be reduced to 1 or 2 major players; an example of this being in Wolverhampton where FBC and Manby Steward Bowdler merged to create one large firm which is far and away the largest practice in the area. Similarly firms who are looking to reach the next level in terms of turnover and headcount can pool their resources, as happened with Shakespeares and Putsmans in Birmingham in 2007 where the new larger practice was quickly elevated to the second tier within the city; since then the new firm have confirmed the subsequent merger with Needham & James with further mergers suspected to be in the offing.
At present VG Charles & Co are speaking with a number of firms regarding merger opportunities on a national level, including brokering meetings between Legal 500 firms. Some of these are practices looking to establish a base in a new city and are looking to do so by linking up with a firm who have a presence in the area; others are practices who can see that the benefits of a merger with firm of a similar ilk to increase their local standing for mutual benefit.
As the market continues to improve the number of firms looking to increase their geographical spread will continue to rise, often by bringing established local names into the partnership as the promise of investment and increased equity proves enticing to firms which have struggled through the recession and realised how fragile the legal market can be for a stand-alone practice.
The golden period of the merger has just begun......
Are you interested in discussing merger/acquisition opportunities in your local area? Are you looking to bolt-on your existing practice to a larger firm, with a loyal client base which can be successfully amalgamated? Contact one of our specialist merger broker consultants at VG Charles & Co on 0121 233 5000 to discuss the way forward. Alternatively visit our website www.vgcharles.com.
(1) http://www.lawgazette.co.uk/news/surge-merger-activity-top-100-firms
Tuesday, 15 June 2010
The Changing Corporate Market
In a market which has been depressed for quite some time, signs of the much lauded ‘green shoots of recovery’ are much welcomed. In the recent past these have been something of a false dawn; the light at the end of the tunnel has proven to be a train coming the other way.
Encouragingly however there appears to be genuine recovery and momentum in the corporate market at the moment. Whereas 6-9 months ago firms would only be looking to strengthen corporate with lateral hires those same practices are now speaking to people with a variety of backgrounds, with followings no longer essential for all openings. Indeed some practices have openings for NQs and those without a vast amount of PQE under their belt, a sign that not only are deals in the offing but that firms now need the resources to put those transactions together.
The conclusion? Well, the indications are that the corporate market has recovered to such an extent that some firms have a workload which outstrips capacity, and whilst no-one is likely to turn their nose up at a partner with a large following, the ability to bring a guaranteed book of business is not essential in all cases.
We were recently instructed on a retained search for a Head of Corporate, an opportunity which would have been unlikely to require a search approach back in the early days of the credit crunch. Now though consecutive quarters of recovery demonstrate that the market is indeed returning and that high quality candidates are going to be sought after again.
It may be too early to proclaim a return to the M&A levels of 2005/2006 but the signs of improvement are there. From a legal recruiter’s viewpoint it is interesting to note those firms who are already recruiting the staff who can maximise their standing within the corporate field when the market returns. These are likely to be the firms which offer a forward-thinking, measured and yet not risk-averse outlook, and similarly are the firms who will have the best people on board when the ‘war for talent’ heats up again.
Encouragingly however there appears to be genuine recovery and momentum in the corporate market at the moment. Whereas 6-9 months ago firms would only be looking to strengthen corporate with lateral hires those same practices are now speaking to people with a variety of backgrounds, with followings no longer essential for all openings. Indeed some practices have openings for NQs and those without a vast amount of PQE under their belt, a sign that not only are deals in the offing but that firms now need the resources to put those transactions together.
The conclusion? Well, the indications are that the corporate market has recovered to such an extent that some firms have a workload which outstrips capacity, and whilst no-one is likely to turn their nose up at a partner with a large following, the ability to bring a guaranteed book of business is not essential in all cases.
We were recently instructed on a retained search for a Head of Corporate, an opportunity which would have been unlikely to require a search approach back in the early days of the credit crunch. Now though consecutive quarters of recovery demonstrate that the market is indeed returning and that high quality candidates are going to be sought after again.
It may be too early to proclaim a return to the M&A levels of 2005/2006 but the signs of improvement are there. From a legal recruiter’s viewpoint it is interesting to note those firms who are already recruiting the staff who can maximise their standing within the corporate field when the market returns. These are likely to be the firms which offer a forward-thinking, measured and yet not risk-averse outlook, and similarly are the firms who will have the best people on board when the ‘war for talent’ heats up again.
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