Howard Kennedy and Finers Stephens Innocent have officially merged into a £39m firm.
The new-look entity, which has rebranded as HowardKennedyFsi, launched today, with chief executive Mark Dembovsky outlining plans to grow into one of the top firms for businesses, entrepreneurs and their funders, and high-net-worth clients.
The West End firms had initially estimated a combined turnover of £43m when merger plans were first announced last summer (8 August 2012).
But Dembovsky said that the current economic climate meant fewer completed deals, financing and lending, plus some departures, which had caused him to revise predicted revenue figures.
He explained that the round of support staff redundancies (14 January 2013) and £1m of efficiency savings had been part of streamlining Howard Kennedy to respond to market difficulties.
The firm has just changed banks to Barclays and set a “conservative” annual revenue growth rate of 3 per cent for the next three years.
The merger was put back from the ambitious 1 November date, mainly due to the amount of back office work needed, the two firms said (19 November 2012).
HowardKennedyFsi now has more than 350 staff, including 87 partners, 19 of whom are equity partners.
FSI’s LLP figures revealed that the pre-merged firm posted a marginally lower profit figure of £5.6m and a slightly higher debt of £1.9m for 2011/12 (21 January 2013).
Dembosky said the merged firm is in “good financial health”.
FSI managing partner Paul Millett is the merged firm’s non-executive chairman and a management integration committee is made up of Howard Kennedy partners Michael Harris, Craig Emden and Jason Lewis, and FSI partners Julian Hindmarsh and Ashley Reeback. Dembovsky and Millett will also sit on the committee.
Emden heads dispute resolution, Reeback heads corporate, Hindmarsh and Paul Springhall share the role of head of real estate, Carolyn Brown and Taj Rehal will share the head of employment role and Liz Palmer leads the private client department.
Dembovsky said lateral hires and bolt-ons were “an integral part” of the merged firm’s growth plan and that each practice would have a business plan of what was needed in terms of targets, revenues and people.
This structured approach will also be used to improve cross-selling opportunities, with business development head Clare Adshead-Grant and at least one partner leading client meetings.
Dembovsky said: “We’ve been working very closely together over the past few months with many integration processes already under way. A number of staff have already been relocated to sit with their colleagues and a number of cases have been cross-referred between the two firms.”
Dembovsky outlined the direction of the business, with the firm aiming to push on from what he termed a “pretty good benchmark” of 25 per cent international revenues. It will combine Howard Kennedy’s East-looking overseas network – particularly in the Middle East, Israel and India - and FSI’s links in the US through its Meritas global network.
He is also aiming to balance the firm’s offerings. Revenue of the merged firm is currently split 38 per cent property, 21 per cent litigation, 16 per cent corporate, 9 per cent private client, 8 per cent employment, 5 per cent transaction and finance, and 3 per cent banking and media.
Dembovsky said: “At Howard Kennedy, property was 51 per cent of revenue and with the merger it is at 38 per cent. I’d like to see it at 33 per cent but only by growing other areas, not reducing property.”
Relocating departments will be ongoing over the next few months and Dembosvky said that, despite initial fears about clashes between Howard Kennedy’s traditional offices and FSI’s open plan culture, partners have “recognised change”.
By 2015, the firm hopes to have relocated the three sites – costing them an estimated total of £4m per year – into one. Dembovsky would not be drawn on whether any new office would definitely be in the West End.