Ambitious Lupton Fawcett scoops up 32 ex-AMS staff

Graham Newton, BDO business restructuring partner who was appointed joint administrator alongside Dermot Power, attributed the firm’s demise to “a combination of a declining volume of business and increased overheads, which created a ­cashflow problem that was ultimately unsustainable”.

While AMS is exempted because of its size from publishing its turnover, in 2008 it told The Lawyer that it made £7.5m. The following year it had a hefty £2.6m overdraft, £3.9m net debt and a salary bill of £2.7m.

As a result of the collapse, around half of the firm’s 67 members of staff have lost their jobs, although a proportion have found homes elsewhere quickly.

The six-member serious fraud business had gone to regional player Cartwright King, while the personal injury business, which was forced in 2007 to pay back £1.45m in fees obtained through the miners’ compensation scheme, had been split between a number of players.

But by far the highest ­proportion of former AMS staff - some 32 individuals - has been scooped by fast-growing Northern firm ­Lupton Fawcett.

Four of the 32 are former partners. They are: business relocation head Steven Williams; residential ­conveyancing and relocation head Ed Williams; head of wills, probate and residential property Tricia Carter; and head of ­company and commercial Max Kennedy.

According to Lupton Fawcett managing director Richard Marshall, this group will help his firm build its counter-cyclical offering while providing “knowledge and penetration of the Sheffield marketplace”, to which Lupton Fawcett is a newcomer.

It is a bit of step down for the four former partners, however, who will all be joining Lupton Fawcett as associates rather than directors - the title the firm uses instead of partner.

Marshall would not be drawn on the reasons behind this, but the careful negotiations around the recruitment of former Halliwells lawyers by the likes of Barlow Lyde & Gilbert and HBJ Gateley Wareing, and their concerns about not being deemed ­successor practices, offer a possible answer.

The new recruits joined Lupton Fawcett on 13 December, the Monday after AMS went into administration. Marshall admits that he had been “talking to AMS” prior to its collapse, but says that “the fact that it fell over had nothing to do with us - it [was] because it ran out of money”.

Still, Marshall wants Lupton Fawcett, which currently turns over some £11m, to have a turnover of £25m and his firm has been busy hoovering up teams to achieve that objective.

Prior to taking on the AMS lawyers the firm acquired niche corporate tax and healthcare firm Hackett Windle to open a Sheffield office in September 2009. In December 2008 it took the commercial and private client teams from another 100-year-old firm - Leeds-based Fox Hayes. A month later Fox Hayes went into administration (The Lawyer, 19 ­January 2009).

At the time comments flooded into TheLawyer. com’s messageboard from those claiming to be former employees of Fox Hayes, accusing their ex-managing partner Philip Drazen and most of the partners of “abandoning ship” for ­Lupton Fawcett, triggering the firm’s collapse.

However, much like AMS, Fox Hayes had its own problems - high levels of borrowings and costs, ­coupled with low margins - long before Lupton Fawcett came on the scene. These problems were exacerbated by key clients of the volume conveyancing business withdrawing work.

Marshall, meanwhile, denies that his is a predatory or aggressive firm.

“We have a strategy for growth and we’re achieving that growth,” he argues. “We’re trying to manage the business in a difficult environment by cutting out fat. The business has to be fit for purpose [through strategic recruitment]. We’re not being aggressive in terms of gaining an unfair advantage. When we acquired part of Fox Hayes’ business we treated people fairly.”

Marshall’s aim is for the firm to be “the region’s mid-market law firm of choice” and he says that this growth plan is well-managed. As of 31 March 2009 the firm had a £10.9m turnover, £2.3m profit and a relatively ­modest profit distribution - the highest paid member last year made £114,000.

“[AMS] is the third step on our journey of strategic growth, and there will be others,” adds Marshall.