If it’s a vision of landed estates and leather-bound books, you’re probably not alone. But, perhaps these two firms are not as traditional as they appear.
Yesterday 99 per cent of partners at both firms voted in favour of merging the two outfits, to create a single private wealth-oriented powerhouse: Charles Russell Speechlys LLP (16 July 2014).
The new firm will spring into life on 1 November 2014. With 500 lawyers, 170 partners and a revenue of £135m the new firm will secure itself a spot among the UK’s top 30 firms.
And for both Speechlys’ managing partner James Carter and Charles Russell’s senior partner Christopher Page – both of whom will retain their titles in the new regime – there’s a sense that the merger is an opportunity to conduct a major overhaul of their business.
“You very rarely have the luxury of a clean sheet,” says Charles Russell’s senior partner Christopher Page. “You might say we’re traditional, and in some respects we are. But we’re constantly reviewing and refreshing what we do,” he adds. ”There’s no doubt this is a big gear change for both of our firms”.
A major change in the pipeline for the merged Charles Russell Speechlys is the relocation of its back office function. The firm intends to re-jig its office space, moving a significant proportion of its support staff out of the City and into legacy Charles Russell’s pair of regional offices in Guildford and Cheltenham.
It’s an efficiency drive by the firms, intended to appeal to clients. As Page puts it, “office space is at least £60 per square foot in London, and more like £15 per square foot in Cheltenham”.
Property issues loom large in this deal. Both Speechly and Charles Russell took on flashy new City offices just as the credit crunch took hold, in 2008 and 2009 respectively.
Speechly initially took on 80,000 sq ft over six floors at New Street Square, before gradually reducing this to about 64,000 sq ft. According to The Lawyer UK 200 it shelled out £3.5m in rates and rent in 2012/13.
Charles Russell, on the other hand, resides in 78,000 sq ft at the City’s 5 Fleet Place which cost the firm £5.4m over the course of the last financial year. The merger should give the enlarged firm the chance to do something about these costs.
Meanwhile it will also be actively tapping into the disaggregation and remote-working trend. Charles Russell has been pushing towards this model for some years, encouraging its senior associates based in the regions to become increasingly “non-located”.
“We go to clients where we need to, but work is done wherever it’s most efficient,” Page says. ”This is a great opportunity for us both in terms of reorganising the space we have.”
Page and Carter insist that any redundancies related to the move will be “minimal”, and that the firm may even avoid having to engage in a redundancy consultation thanks to natural attrition.
While it has one eye on reshuffling staff at home, Charles Russell Speechlys will have the other firmly set on international expansion.
Charles Russell has long been an international creature. Page says that the firm pre-dates the United States, and even had a hand in creating Canada. And while it currently reaps about a third of its total fee income from its overseas offices, it hopes to retain this balance after its merger with Speechlys.
“The balance of the firm will undoubtedly shift to become more international,” says Page. “That’s a great driver of this merger. Both firms have been stretched in terms of man or woman power to send out internationally. And maintaining an international network is expensive”.
Charles Russell has overseas offices in Geneva, Switzerland, Manama, Bahrain and Doha. Meanwhile, Speechlys’ has outposts in Geneva, Zurich, Luxembourg and Paris. In fact, some consolidation has happened already. Charles Russell has some lawyers operating from Speechlys’ office in Luxembourg, and Speechlys’ Geneva staff are preparing a big move into their new partner’s offices.
Carter and Page are yet to settle on an approach to growth. Charles Russell has long had a tendency to growth through alliances, while Speechlys has preferred to launch its own offices from scratch – “gun boat diplomacy as opposed to opening embassies,” they joke.
But first things first, the firms need to overcome two of the biggest hurdles that are thought to have emerged during discussions: office space and their IT systems. Once their technology is standardised – possibly within three to four months – the two will begin to relocate staff between their two plush City offices which are, fortunately, just a stone’s throw from each other.
The firms will decide which of the new four key divisions – business services, litigation and dispute resolution, private client, and real estate and construction – will sit in which office. Meanwhile, management will continue to scout out new potential homes for a unified Charles Russell Speechlys.
“It’s quite obvious that we want to get under one roof,” says Page, adding, “our priority for next week is to talk to landlords and to our adjoining tenants.”
Carter and Page certainly communicate a sense that all the legwork will eventually be worth it.
“Combined we’re a very well-balanced ship, better than we are now,” insists Page. “There are costs but in the short-to-medium term there’ll also be benefits.”