When Reynolds Porter Chamberlain (RPC) makes a strategic move it is usually intended to send a clear message to its insurance industry peers.
The opening of an office in Bristol on the back of a raid on CMS Cameron McKenna is a bold statement, coming as it does just three years after RPC offloaded its Tiverton office to London rival Kennedys.
Camerons will be left with just three insurance partners following the exits of Bristol managing partner Jeremy Barnes, commercial disputes partner Joe Bryant, insurance fraud partner Simon Chandler and professional indemnity partner Peter Mansfield.
The four partners resigned last week (19 September), prompting Camerons to take the unusual step of announcing their departures the same day.
Discussions are ongoing between the two firms over the transfer of the team. In the meantime RPC is staying quiet about the details of its plans for the launch of an office in Bristol.
It is understood that the partners are likely to be held to a six-month notice period by Camerons, delaying any office launch, unless RPC is able to hire elsewhere.
In the meantime RPC will be hopeful that the four can secure their strong client list to bring along to their new firm.
In a statement regarding the hires, RPC managing partner Jonathan Watmough said: “We serve many of the same clients and this is a very natural fit for both sides. It means we can offer clients a top-quality out-of-town service.”
Giving an insight into the strategic thinking behind the office launch, Watmough said it would allow the firm to remain conflict-free in the banking sector while serving insurance clients from Bristol.
Bristol, like Manchester, is home to a thriving insurance market and composite insurers such as Allianz, Zurich and Axa have strong bases in and around the city. The firm will want to strengthen its ties with these clients and has effectively taken out one of its competitors in order to do so – think the Clyde & Co-Barlow Lyde & Gilbert merger on a miniature scale.
The move reflects the strategic repositioning of RPC in the past three years. The firm has moved away from the bulk end of insurance work and had disposed of its Tiverton base to reflect that. It is now attempting to create a market for itself at the top end of the financial services market.
Speaking to The Lawyer, Watmough said the emphasis in the past year has been on creating a profitable base to enable its all-equity partnership to invest in the firm without taking on additional debt.
The firm’s profit margin has hovered around the 33 per cent mark for the past five years, unlike at many of its competitors in the insurance market, which have seen their margins come under intense pressure.
In comparison, BLG has gone from a margin of 31 per cent at the 2008-09 year-end to 25 per cent at the close of the past financial year.
One RPC insider commented: “Until four years ago we saw BLG as our biggest competitor – we admired them and wanted to be like them. The same can’t be said now – they’re not in the same market as us. They’ve gone down-market with volume and we’re going upmarket. We want to be distinctive.”
It is this drive for distinctiveness that is a key driver for the firm’s national development. The four partner hires into Bristol are only the beginning – RPC’s hiring spree will continue for some time yet.