Jonathan Watmough and the RPC learning curve
28 February 2014 | By Hannah Gannagé-Stewart
3 February 2014
13 January 2014
19 November 2013
10 December 2013
12 August 2013
RPC managing partner Jonathan Watmough has spent the last few years moving the firm away from its insurance roots and bringing in top level recruits in a bid to shake up the client list.
Since then revenue has grown by around 33 per cent to £82.1m at the end of 2012/13, headcount is up to 590, and the partnership having grown to 77 overall.
In comparison with some of its insurance counterparts it’s an underwhelming set of growth figures. Take Clyde & Co and DWF for example, which through bolt-ons have grown by around 57.8 per cent and a staggering 126.5 per cent respectively over the same period.
Reflecting on the notable increase in scale at DWF, which has pursued a high-profile acquisition strategy, RPC managing partner Jonathan Watmough extends due credit to his counterpart and good friend at DWF, chief executive Andrew Leaitherland, calling him “a force of nature”.
“They do what they do well,” he says, “but RPC are moving away from that slice of the market.”
RPC’s strategy is to exit the lower-value, higher-volume insurance market and take a bigger slice of the highly sought after high-value work from its bigger competitors, but it’s a path the firm has been on for several years. What’s the hold up?
“Our challenge is to take a better quality market share off bigger firms who are less nimble and flexible,” Watmough says, conceding that the firm will not appeal to everyone but adding he has full confidence that clients that come on board with RPC will stay for the long term.
The last few years at RPC have been characterised by expansion, albeit a more gradual expansion than at other firms. After Singapore in 2011, the firm went on to launch a seven-partner office in Bristol (3 January 2012) and a five-partner office in Hong Kong (2 July 2012).
Watmough says it was a conscious decision to grow at the firm’s own pace rather than trying to keep up with others in the market.
“The new world is all about people and relationships,” he argues. “Yes, you still need to face down the competition, you still have to be credible in a pitch, but it’s much less macho than it was. It’s more diverse and more about reflecting the world and the clients that you serve.”
It’s for this reason that RPC sought to retain its culture by growing via lateral hires rather than merger. Watmough credits much of the firm’s focus on people and culture to his chief operations officer, Richard Emanuel, who had a varied background in marketing for brands like Rowntree, the FT and American Express before moving into professional services at accountancy firms Deloitte and BDO.
It’s a joint effort, with Emanuel the creative side of the outfit and Watmough the legal business brain. The RPC managing partner believes this to be a powerful combination and one that has been instrumental in helping the firm attract new talent.
“Over the last five years we’ve recruited about half the partnership,” Watmough says, “and one thing I’ve learnt about lateral hires is it never works the way you think it will. They never bring the followers that they say they will but if you recruit the right character of people and bring them along it will work.”
That said, trying to pin Watmough down on specifics or the precise direction of the firm is a challenge. He is most happy energetically enthusing over management styles, the importance of organisational culture and the linkages between society and business. Ask him to break down the firm’s strategy over the next five years and he clams up a bit.
”A five-year strategy would be out of date before you’d delivered it, so you have to have a framework which you use and be able to react,” he says matter-of-factly. “In the next 10 years we’ll see more change coming through our profession than there’s been in the last 30.”
With some coaxing, and having declared the majority of firms in the top 50 to be on the wane after years of rapid growth, he reluctantly pins RPC down to a position on the growth curve.
“Transitioning from a learning phase to a growth phase,” he says. “A lot of our growth has been preparatory and the last year in particular has been a lot about consolidating.”
As well as preparing for the brave new world via a cautious growth strategy, RPC has been cementing its people philosophy by making changes to its remuneration structure. Watmough has retained the full-equity partnership but the route from NQ to partner is now entirely meritocratic. So does such a democratic structure conflict with the need to respond fast and stay nimble?
“Equity constitutes ownership, so all the partners in RPC have ownership,” he says. ”We don’t have an ownership structure that filters down below the partners, but it an ownership culture with very little employee mentality.”
Watmough laughs when pressed about the decision-making implications of having a full-equity partnership.
“We never vote on anything at partner meetings,” he says. ”If you get like-minded people together, it’s got nothing to do with democracy, it’s to do with vesting trust in people to get out and do it.”