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Undermined by leadership slip-ups, is it time firm looked outside for fresh blood?
There’s nothing like a miscalculated paycheck to ruffle feathers. Particularly when it coincides with managerial mistakes and waning confidence. Perhaps that’s why few eyebrows were raised when Addleshaw Goddard managing partner Paul Devitt announced plans to resign from the top job at the increasingly inert firm.
The first management error involved underestimation of the number of points in circulation, meaning partners’ share of profits was calculated on the assumption there were 9,300 points in circulation, not the real figure of 9,832. There was less money to go round. If you are told you will receive a bumper pay packet and then told that it has been added up wrong it will leave a sour taste.
Added to that was the embarrassing news that, in the same half-year, Addleshaws’ management failed to mention the £1m costs it racked up when opening the Hong Kong base in 2013. This shaved a little more off the anticipated bottom line.
As if that wasn’t enough to spark a revolution, questions have been raised about the unrecoverable success fee built up by the litigation team when it acted for now-deceased oligarch Boris Berezovsky in a series of cases worth billions.
Of course, Berezovsky’s suicide could not have been forecast and many close to the firm suggest he had settled some of his debt with the firm, but as one former partner puts it, “the hopes and dreams of the firm” were resting on the case so it must have been a blow.
The spark that really lit the blue touchpaper came when it emerged that a group of partners, thought to be in Devitt’s inner circle, were handed 140 equity points last year. Equity at the firm has always plateaued at 150, according to senior partner Monica Burch, although sources suggest headroom had been built into the top of equity, so if you’re sitting on 140 you’re near the top of the tree.
The firm rejects any suggestion that moves up the equity were connected to internal accounting mistakes, but anyway the effect on morale was palpable.
Behind closed doors partners admit the firm has “totally lost strategic direction”. Burch went on the record to say the recent mistakes had been “embarrassing” and had “annoyed” some partners.
With a breakdown in confidence starkly evident it can only be a matter of time before recruiters start to circle the former northern powerhouse.
So, with no apparent succession plan and only reticent management candidates (including former real estate chief Adrian Collins and business support and restructuring John Joyce), is it time Addleshaws looked further afield for a resolution to its leadership crisis?
As a firm forged of mergers, Addleshaws is crying out for an independent adjudicator to step in. Then partners may feel the wrongs of the past have been put right.