St Philips’ merger creates a giant as 5 Fountain Court launches in London

Gareth Chadwick reports on how the two Birmingham powerhouses could give London sets a run for their money

How big can a chambers get before it bursts? This is the question many lawyers in Birmingham are asking themselves in the face of this summer’s merger news at St Philips Chambers and the opening of a London annexe by 5 Fountain Court.

By the time the merger with 1 Fountain Court becomes operational on 1 October, St Philips will be unchallenged as the largest set in the country, with 140 tenants split across crime – the largest team with 58 members – civil with 56 and family, with 26.

The crime team alone, headed by David Crigman QC from 1 Fountain Court and Bill Davies QC of St Philips, will become the fourth largest in the UK, with five silks and 53 juniors.

Many perceive the merger between 1 Fountain Court, which is primarily a criminal set, and a set which has spent the past few years pushing its chancery and commercial capabilities, as an odd move, but St Philips’ chief executive Paul Wilson is clear about the benefits of the merger. “Our strategy revolves around the fact that we regard ourselves as the best chancery and commercial set in the Midlands,” he said. “This gives us strength and depth, which will arguably place us at the top end of the criminal sets as well.”

The merger should see overheads reduced as a proportion of turnover, which is clearly the best way to manage a merger. The extra 40 or so barristers that Wilson expects to have in place by early October will raise the staff profile by only two, bringing staffing costs down from 52 per cent of total costs to 43 per cent, while adding over £3m to the turnover.

There is a delicate balancing act to be performed between crime, chancery and commercial, and family. It is the same balancing act that law firms have largely failed to master, preferring to specialise in one or the other.

While Wilson recognises the challenge, he is confident that St Philips can pull it off, believing that “it’s not really different to any other major business that runs three different brands with three different profiles”.

Rather than being concerned about the tensions seen in law firms caused by the profitability of different sectors, Wilson considers the main challenge for his chambers to be maintaining the quality of advice across the board. “The top end of our criminal set is just as profitable as our commercial team, so that isn’t a problem” he said. “The problem is driving the quality of every barrister. If you can be the best criminal set in the country then your profit margins will be fine as long as you can keep the cost of sales low.

“Somebody earning £200,000 a year would be paying about 15 per cent in total charges here, which would be extremely competitive anywhere in the country. If we can keep that, and consequently retain the best people, then we can drive the quality very high.”

Over at 5 Fountain Court, which with 117 tenants is still the largest chambers in the country until 1 October, head of chambers Gareth Evans QC is taking his chambers down a different, but no less successful, route to St Philips. It is a route that has also led to speculation about how large the chambers can actually grow.

July saw the opening of 5 Fountain Court’s London annexe, which now houses eight barristers, a number that Evans expects to double within the next three years. He also publicly stated the intention to open further annexes across the country, particularly in the South and South West.

The set has largely eschewed the merger route, cherry-picking those barristers it considers desirable. Even in London, the hardest market to crack from a standing start, it rebuffed approaches from several sets to open on its own with a hand-picked team.

Evans said: “We were approached by a large number of smaller London sets, as well as sets outside London, asking us to take them over, but we came to the conclusion it would involve too many problems. If you take over a whole set there tends to be a lot of dead wood.”

According to an article in The Independent on 12 August, average fees at the Birmingham Bar are between £300 and £400 per hour. One thing that Evans and Wilson are agreed on is the inaccuracy of the surprisingly high figures, suggesting that only half a dozen barristers in the city could charge such fees. Wilson said that a more accurate figure would be around £200 per hour.

So, there are two different approaches by two very successful chambers. They may squabble about their relative merits, but the one undoubted winner is the Birmingham Bar.
With one dominant set, a lot of work would flow down to London, but with two large sets to choose from, Birmingham should be able to mount a serious defence of its territory.