Clydes took £23m loan to fund post-merger office move

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  • Muhammad has some interesting points to debate but probably the wrong platform to get the party going whether the statuettes were in support or not. Whether the business legal industry truly adds to wealth creation within our society is an unlikely feature to make it to the pages of the Lawyer I would imagine.On the plus side, Clydes represent for many what isn't right in the sector so that's a good choice.

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  • Our friend does indeed make some interesting points, and it seems to me the central one is decadence. Decline is always prefaced by decadence. Cultural decay, structural weakness and reliance on finance are the usual warning signs. And, by any standards, £46m of bank debt and £125m of creditors in all on turnover of £285m is 'reliance on finance'. At some stage though, the music will stop and this cheap debt will have to be repaid. Given their near 100% focus on the insurance sector and, therefore, a declining profit margin, this won't be easy.

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  • Not all decline is precede by a period in which the incumbent rulers fiddle in the face of looming threats but increasingly it does seem that many law firm management teams are doing just that. Whether Clydes have got the gloves on this is hard to say from a straight read of the accounts and no doubt they will be adjusting the antenna and applying the hand brake to any financial issues. It's important to beat the stick on this point more broadly and encourage firms to clean their rifles, hold their own and complete their financial handiwork before overstretching themselves. Looking after the cash is not just the province of smaller firms and one man bands - every firm should think carefully before painting the ceiling with new office openings and extravagent hires.

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  • Muhammad makes no mention of Onan's will but firms will need to wrestle the eel of rising interest costs on borrowings set against declining rates in the insurance market. This will involve sharpening their pencils and polishing their swords to look for alternative business models. Clydes are exposed on this front

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  • Growth must not be an end in itself, and nor swelling partners' coffers. Law firms are staring a new, naked model in the eye and they just have to accept it. Flogging the dead horse is pointless and will just generate needless friction. Time for a change of hand on the tiller.

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  • Roger's right - not a time for splashing out and seeding vanity growth. A tighter hand on the model and more financial muscle control is needed to avoid spilling talent and shooting backwards. Restraint is the order of the day.

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  • I read Clydes Guildford, Manchester & Oxford accounted for only 3.7% of turnover totalling £10.8m. Would it not be a saving to merge these offices into one base? As a lot of the claims dealt with in Manc' and Oxon' are more routine, it may also be worth exploring outsourcing of this work to a lower salary cost/overhead base.

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