ASB Law's non-replacement of chief exec fuels speculation
27 February 2006
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The departure of ASB Law's chief executive two weeks ago has set tongues wagging in the South East legal market. As first revealed on www.thelawyer.com (20 February), Christopher Honeyman Brown has left the law firm to pursue "other interests" and will not be replaced as chief executive.
Lawyers in the region have been awash with speculation as to why Honeyman Brown left and what the exit means for the future of ASB. Since his departure he has been unavailable for comment.
Senior partner Russell Bell has no doubts about the firm's future. "ASB will be run by an executive committee, which includes myself and partners Andy Taylor and Andrew Clinton," he says.
ASB continues to be a source of intrigue within the South East legal market because of its recent, and sometimes tumultuous, history. The firm was formed by the three-way merger of Argles & Court, Burstows and Stonehams in 1999. At the end of the 2004-05 financial year, ASB had 43 partners and offices in Brighton, Crawley, Croydon, Horsham and Maidstone.
Honeyman Brown advised on the merger when he was working at chartered accountants Horwath Clark Whitehill. In 2001 he was brought in as chief executive and became one of the few examples of a non-lawyer leading a firm.
During his time at the helm, Honeyman Brown oversaw a number of changes, including several departures. Just last year ASB cut 11 jobs across its offices, including three fee-earners, while three family and private client partners jumped ship to Goodman Derrick.
Bell says Honeyman Brown was a great change manager. He adds: "Did he stay too long? You never can tell. He was great at building a team and we've got to a place now where we're ready to grow."
There is a sense that Bell and his team are coming out of Honeyman Brown's shadow. "The new generation of partners have matured and they're ready to run the firm," says Bell.
The South and South East legal market has seen considerable consolidation in the past five years. Blake Lapthorn Linnell is the result of two separate mergers - between Blake Lapthorn and Sherwin Oliver in 2002, and then with Linnells 18 months later. It is on the verge of completing another (see page 1). At the start of 2005, DMH picked up London firm Stallard to create 42-partner firm DMH Stallard.
As with the unions listed above, ASB's merger was designed to give it critical mass in the market and increase profitability. Of the seven South East firms in The Lawyer UK 100, ASB's profit per equity partner (PEP) of £130,000 is one of the lowest in the region. Only Blake Lapthorn and Penningtons have lower PEPs at £125,000 apiece, while at the other end of the scale Thomas Eggar enjoys a PEP of £235,000.
ASB sits at the bottom of all the South East firms in The Lawyer UK 100 when ranked by turnover. ASB's revenue for 2004-05 was £18.2m compared with the £30m generated by Blake Lapthorn.
Rivals claim that the low PEP hampers ASB when it tries to recruit, but Bell again shrugs off such criticisms. "PEP is going to go up substantially in the next few years. And we've not had problems recruiting at the current level," he insists.
So what does the future hold for ASB Law? Unlike some of his rivals, Bell has no desire to open a London office and is pinning the firm's growth on the local economy, where projects include the redevelopment of the Thames Valley Gateway and the growth of the Gatwick Triangle.
"There's more than enough headroom in the South East. There's lots going on around Gatwick and Kent and that's where we see ourselves growing," explains Bell.
A rival managing partner has conciliatory words, arguing that ASB plays an important local role. "Other firms are facing towards London," he says. "We need [ASB] to be successful locally or other clients may just go straight to London and the whole region will suffer."