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Last week’s union with Scottish insurance outfit HBM Sayers was Berrymans Lace Mawer’s (BLM) first merger since 1997 (17 March 2014). Is this the start of a new acquisitive era for the firm?
While other insurance firms kicked into expansion mode as soon as the Jackson reforms were announced back in 2010, BLM has taken a less hasty approach.
The merger between Berrymans and Lace Mawer to create a national defence insurance law firm in the late 1990s (18 February 1997) was a reaction to smaller insurance panels and consolidation in the market – namely the merger of one of Lace Mawer’s biggest clients Royal and Berryman’s biggest, Sun Alliance – but for a long time after that the firm seemed just to hunker down and watch the market evolve.
Meanwhile its counterparts such as DAC Beachcroft and later DWF started making headlines with mergers and international openings.
Still, the firm’s figures crept up year-on-year nonetheless. Turnover went up by 27.3 per cent between 2008/9 and 2011/12 according to the The Lawyer’s UK200, from £63.8m to £81.2m.
Over the same period partner headcount also increased by almost a quarter but profit fluctuated at best, and ultimately started to dip.
The firm’s profit margin hit a five-year high in 2010/11 at 22 per cent but that was following a decline the previous year from 21 per cent to 18 per cent. Since then it has been falling, with the latest figures recording a profit margin of 16.41 per cent for 2012/13.
But that may be because over the past year something seems to have been stirring at BLM, which now plans to drop the long form of its name and be known simply as the acronym BLM from 1 May when the HBM Sayers merger is set to go live.
In March 2012 the firm elected Mike Brown as its new senior partner succeeding Terry Renouf, who stood down after six years in the job.
Under Renouf the firm expanded geographically, opening offices in Cardiff and Bristol in 2010, and turnover rose 75 per cent from £45m in 2005/06 to £78.8m at the 2010/11 year-end. But under Brown things seem to have stepped up a gear.
In October 2012 the firm took its first steps outside of the UK market and opened in Dublin. Then in July last year it expanded with the establishment of a Lloyd’s of London desk. In December it acquired a team of five personal injury lawyers from Morgan Cole.
The Morgan Cole laterals looked much more like the kind of move the rest of the market had been making for months, with a team of 35 of the firm’s fee-earners and 24 support staff transferring to DAC Beachcroft as part of the same deal (15 November 2013).
Were those the warm up moves of a firm preparing to play catch up?
HBM Sayer isn’t new to the consolidation news mill, having been linked to DWF back in January 2013 when the merger hungry insurance giant was said to be looking for a second Scottish tie up (18 January 2013).
With turnover of £84.7m and net profit of £13.9m in 2012/13, the firm is roughly at the same position on the growth curve today as DWF was when it started to pursue its expansion strategy in earnest back in 2011/12 - but with a healthier profit margin.
The question for BLM is whether the early birds already caught that particular worm?