Bevan Brittan’s Leeds office opening in September hailed a return to growth and stability for the public sector-focused firm, which has posted static financials over the last five years.
Now, just two months later, managing partner Duncan Weir has revealed his intention to open a fifth office in Manchester in the next three years and has set his sights on the £80m revenue mark, more than double the firm’s current standing.
The rapid expansion needed to take Bevan Brittan from a £35m firm to one posting revenues in the £60m to £80m range in the next five years will come through taking a number of litigation team hires for its regional hubs, Weir tells The Lawyer.
“There’s no absolute timeline but certainly by five years, and probably within three years, we’ll have succeeded so well in Leeds we’ll open in Manchester,” he says.
“In Leeds, from a budgeting perspective we’re already ahead of target, but there’s room for a lot of growth. We’re not looking to acquire a lot of firms to shoot through £100m, but revenue of between £60m and £80m in the next five years is realistic providing we can find the right people.”
The firm’s Leeds office currently provides just two of Bevan Brittan’s four core departments: property and commercial and infrastructure. Four of the seven initial partners have arrived to launch the office, including DWF healthcare head Michael Boyd and director Julie Cowan Clark.
The hiring spree is set to continue.
“We’re talking to a couple of litigation teams we’re expecting to come across by the middle of next year,” says Weir. “We’re already getting a lot of CVs in Leeds from partner teams, and we’re interviewing partners in the regulatory and clinical risk space.”
Lateral hires, an expansion of its existing markets provided by the extra regional bases, plus an increased push into the private sector are all expected to push up revenue at the ambitious firm.
“I would never say never to a merger, though it’s unlikely,” says Weir. “Seven years ago we may have needed to merge to survive but now the partners have no interest in being swallowed up. But if a bolt-on of a £5m to £10m firm came up, or a significant part of another firm saw us as a good home I wouldn’t rule it out.”
The idea that more people generating more work will bump up revenue is a simple one, and one that looks realistic for a firm that is so easily defined. Bevan Brittan has very little international work, no foreign offices and a healthy, longstanding relationship with a large homegrown clientbase.
Bevan Brittan saw a return to growth at the end of the latest financial year with revenues up by 5.7 per cent from £33m to £34.9m.
After two static years at £4.3m, net profit was also up by 4.65 per cent to £4.5m. Average profit per equity partner remained fairly level, rising by 0.3 per cent from £283,000 to £284,000.
The firm has certainly come a long way in the last seven years, coming back from near breaking point after the financial crisis and three rounds of redundancies that saw around 50 fee-earners and support staff laid off.
“We had a really rough period during and after the financial crisis,” Weir says. “We over-expanded into areas like City-led banking services that we didn’t have credibility in. We were trying to get into too much of everything.”
“Too much money was spent without the revenue coming in, then we had a major contraction,” adds Weir, who headed up Bevan Brittan’s projects and construction team at the time. “It wasn’t helped by the credit crunch but we were also responsible for the problem.”
Five years on, Weir has built on the solid foundations laid by his predecessor, former chief executive Andrew Manning, and played his part in first saving, and subsequently expanding, the firm.
Bevan Brittan’s reputation for stellar but solely public sector work has been both a blessing and curse in the past. The firm works for every local authority in Britain, a mandate sealed thanks to Virginia Cooper’s defence of 145 of them in the Icelandic Supreme Court, but a number of its leaders have tried to expand its private sector work and give it more of a spotlight in the future growth of the firm.
Manning, who led the firm until Weir stepped up in February 2012, was the first to make good on this ambition. He oversaw a growth in net profit from £6.2m in 2007/08 to £8.2m in 2010/11, despite a 9 per cent dip in turnover to £34.3m.
“Andrew and I worked hard to turn it around,” says Weir. “Some of our competitors have gone under, some others are still creaking along. Thankfully we’re in a much better place.”
What saved the firm was “going through a much narrower focus” and “retracting and refining” during his predecessor’s term and his own first 18 months in the job, Weir says.
“When I became managing partner it was less about saving the business and more about growing it geographically and in terms of markets,” he continues. “Now, public sector is still the dominant part of what we do and what has allowed us to invest in Leeds, but having become more profitable and more sustainable, we’re now expanding out to more private sector work.”
The subtle change in the firm’s identity was cemented in May this year when Bevan Brittan changed its strapline to include “private and third sector” to put more focus on its private contracts for construction contractors such as Wates Group and health care technology provider Optum.
Weir has also focused on bringing debt down, with the firm’s borrowings now standing at £1.1m, which gives the firm “a lot of a headroom”, says Weir.
Partner capital contributions, though put up once in recent years, have gone from an “exceptionally low starting point to something that is still quite low”, Weir adds.
He has also launched an internal service delivery efficiency project aimed at making sure the firm makes the most of its public sector mandates that are often high in volume but low in rates. “We have to be very efficient and clear about things like write-off and lock-up that you probably have to be less concerned about if you’re getting high rates in the City,” Weir says.
The efficiency drive included hiring TLT programme manager Owen Bishop as head of transformation to manage the delivery of projects and office openings at Bevan Brittan. Weir also has mooted the idea of expanding Bishop’s team to bring in legal project managers to manage its insurance and third party liability work that is run wholly on project lines.
“We worked with a lot of external consultancies prior to bringing Owen in to make how we manage the low rates work more effectively,” Weir says. The review meant one of its groups cut the fee-earner hours spent on each matter from 14 hours to 4.7 hours.
“If we can do that without compromising the quality of the work then we’ve shaved off 10 hours,” says Weir. “It’s a ‘win win’ for us and our clients; they get some of the value back but understand some of the value stays with us. It means they keep coming back to us.”
Weir describes his management style as “hands on”, though he says this is gradually changing as the firm expands.
“When we were focused on surviving I was micro-managing a lot,” he says, adding that he still meets with the firm’s finance director Chris Ake to go through the “minutiae” of lock-up, project portfolios and workflows every month.
Looking to future, he will “keep pushing Leeds” while plotting the Manchester proposed office.
“We’re a business with a lot of potential. Not one that will suddenly seek to be in the top 20 law firms, but we’re comfortable with who we are and where we are,” Weir concludes.