A decade ago, Halliwells was a small firm in Manchester – solid, but without profile. Now, in its 40th anniversary year, the firm is nudging the UK’s top 40, with a £50m turnover, and has ambitions to keep on growing. As one rival puts it, Halliwells is “like DLA Piper Rudnick Gray Cary 10 years ago”.
Like DLA Piper leader Nigel Knowles, Austin is a direct, aggressive northerner. He says what he means, and doesn’t beat about the bush. He accepts there is truth in the “aggressive” tag, but prefers “determined”, as in Halliwells is “determined” to maintain its growth.
The firm has a few hurdles to overcome before it can properly embark on the road to national domination. It has a London office, although it needs more bulk, but it has to juggle its commitment in the capital with its key clients rooted in the North West. The biggest danger for Halliwells, currently going like a train, is that it could fall into the same trap that ensnared firms such as Hammonds, and forget where it came from. The question now is: has Halliwells got its strategy right, or is it destined to be DLA Piper-lite?
Managing partner Ian Austin admits to being “flattered” by the DLA Piper comparison. “DLA are a bloody good outfit and what they’ve done over the past 10 years has been phenomenal,” he says. “If you go back to the mid-to-late nineties, everyone questioned our ability to get much further because we didn’t have a business plan.”
The plan now is to hit £70m in 2007, a strategy dubbed ‘Mission 7007’ when it was unveiled at the firm’s partner conference, held in Prague on 19 November. Half-year figures put the firm on budget for about £60m in the current financial year. Austin says: “I think if we do hit £60m this year it would be one hell of a performance.” Crucially, it also has no debt, and that alone sets it apart from certain national firms. In the longer term, Austin claims that Halliwells can “without a doubt” become a top 25 law firm.
In less than two years, since Austin became managing partner, Halliwells has added more than 30 partners and broken both the £50m turnover and £400,000 PEP barriers. Austin has inherited a firm with a balanced portfolio. Corporate, property and litigation each account for 25 per cent of the turnover, or £12.5m. Finance turns over 15 per cent, or £7.5m, and employment 7 per cent at £3.5m. The strongest growth in recent years has been in corporate and banking work. Halliwells landed spots on the Barclays panel this year, and also does work for Tesco. Like many North West firms, it also acts for insurance clients such as AIG and Legal & General. But the majority of Halliwells’ work comes from clients which resemble the firm itself – growing mid-sized regional companies with ambitious plans for the future. Profitability is running at a margin of 32 per cent. Just as crucially, Halliwells has succeeded in keeping costs relatively low at £155,000 per lawyer – a small rise from 2004’s £146,000 figure.
The partner growth has led to an ever-more concentrated equity spread. In 2003, 45 per cent of Halliwells’ partners were full equity; by the end of 2005 just 36 per cent were. But Austin points to the four partners who joined the equity this year and argues that progression and promotion based on skills and performance is a key part of the firm’s expansion.
But Halliwells has hardly thrown investment into its London office. The lease for a new London office in Threadneedle Street was signed in October 2004. Although a number of partners have been hired, the office contributes around £8m to the total firm revenue of £50m. London profitability runs at around 40 per cent, as most of Halliwells’ support functions are based in Manchester.
Halliwells’ power centre is now also focused in Manchester, after a recent reorganisation that saw the end of the office head role. The idea is to refocus the business as one firm, rather than having Halliwells act as a four-fiefdom operation. London managing partner Clive Garston, along with Liverpool head David Morgan and Suzanne Liversidge in Liverpool, have all returned to fee-earning duties.
The move puts the popular Austin firmly at the helm of the business, managing internal affairs while senior partner Alec Craig looks after the client-facing side of Halliwells. It should get rid of any possible inter-office conflict and allow the firm to move on as one operation.
Austin is not planning on letting Halliwells rest too long at anchor. The next step looks likely to be taken across the Pennines, in Leeds. ‘We’re considering other commercial cities,” Austin reveals. “Leeds is an example of a similar place to Manchester. It’s something that we would consider.”
|Halliwell Landau founded in Manchester.|
|Roger Lancaster takes over from Clive Garston as senior partner.|
|The Lawyer reports that Halliwell Landau and Cobbetts are in merger talks; cultural issues later cause the talks to break down.|
|Opens in London with all the fee-earners of niche City firm Roberts & Richards plus two other partners.|
|Senior partner Roger Lancaster steps down after six years; management is split between managing partner Paul Thomas and senior partner Alec Craig.|
|Informal merger talks between Halliwells and Wacks Caller come to nothing.|
|Craig re-elected; litigation head Ian Austin replaces Thomas after contested elections.|
|Halliwell Landau becomes Halliwells LLP; financial institutions arm is divested to become HL Interactive.|
|Merger with Cuff Roberts launches Halliwells in Liverpool.|
Determined to succeed
Austin is relatively new to his role. He was elected as managing partner in February 2004 after contested elections against incumbent Paul Thomas. Thomas had been Halliwells’ first managing partner, elected in September 2000, alongside senior partner Craig after a restructuring of the firm’s management. After years of steady growth, the partners felt Halliwells needed a broader management structure than the single senior partner model it had operated until then.
Litigation head Austin stood and won on a slate of strong leadership, business focus, engagement of people, improved communications and sound financial management. Since the election he has quickly stamped his mark on Halliwells, guiding the firm through a period of accelerated growth that has seen it expand massively in terms of partners and offices. But the growth demanded in London has inevitably opened the firm up to criticism that it will forget its roots.
Austin, who says he is determined Halliwells will avoid the pitfalls encountered by Hammonds and others, points to last year’s merger with 16-partner Liverpool property boutique Cuff Roberts. The tie-up’s chances of success looked slim on paper. Cuffs’ staid, traditional culture looked a poor fit with Halliwells’ aggression. And exactly what was Halliwells going to do with Liverpool – was it to be a factory to carry out work sourced from Manchester? Or would the firm develop the office in its own right?
The answer came quickly. In February, Liverpool-based DLA Piper corporate partner Paul Jefferson joined the firm, followed by three more DLA Piper partners from the same office, the most recent recruit being Richard Capper (The Lawyer, 14 November).
“I think it’s worked,” says Austin of the merger. “There’s been no hostile reaction and it’s well-integrated.” He believes Halliwells’ presence in Liverpool is important to the further development of the firm, pointing out: “I think the [North West] more and more is looked at as a region, not just Manchester.”
The success of the office has even been noted by competitors. Patrick Gaul, managing partner of Weightmans, which has 28 partners in Liverpool, says: “They seem quite buoyant. They’ve been a breath of fresh air and have shaken things up.”
A managing partner from another local firm adds: “Whatever they’ve been doing appears to have been extremely successful.”
Perhaps almost too successful. Liverpool sources say that a recent profile of Austin in the local press, in which he was quoted criticising the effect DLA Piper’s global strategy has had on its regional offices, has prompted some acrimony between the two firms.
DLA Piper Liverpool managing partner Philip Rooney is bullish, saying: “The departures have not had, and will not have, a material effect on us and will have none on our service to clients.”
Nevertheless, Halliwells has now overtaken DLA Piper in terms of partners in Liverpool – 19 compared with 17, against 16 and 20 respectively at the start of the year – and the growth looks set to continue.
The next DLA?
There is still a glaring hole in Halliwells’ northern arsenal, however. Only when it establishes a Leeds office will it genuinely be able to compete with the other regional and national firms.
Austin will manage growth from Manchester. “At the end of the day, if we’re to maintain this performance we’ve got to keep a clear picture of what’s happening in all the offices,” he says. “The fundamental mission is to get this one-firm approach. We’ve got a better professionally managed firm than we had five or six years ago.”
Both he and Craig are discounting world domination for the time being. “If you said to me, ‘Do you have global aspirations?’, then no, we don’t,” says Austin.
“We’re too late to compete with the DLAs and Eversheds and Addleshaws,” adds Craig, claiming that far from this being a handicap, he and Austin see their strategy of building a serious regional heavyweight as an advantage in the current market.
Halliwells has proven it can cope with large numbers of lateral hires, and the Cuffs merger is working so far. The firm is investing from profit, with no overdraft, and Austin and Craig have a clear plan for the immediate future. But too much, too fast, and it could all go wrong. Now is the time for the firm to capitalise on its strong financial position.
|Key lateral hires in past two years|
|London corporate team doubles in size with the hires of Matthew Puhar from Richards Butler and Ian Brent from Berwin Leighton Paisner.|
|Reid Minty partner David Pacey helps launch banking litigation in London.|
|Sheffield construction team launches with the appointment of David Fearon from DLA Piper.|
|Corporate partner Paul Jefferson joins Liverpool from DLA Piper.|
|PFI practice is kickstarted by hire of Neil Wilson from Robert Muckle; Liverpool property is boosted by Hill Dickinson’s Sue Edwards.|
|Adam Perry joins the London property team from Lewis Silkin.|
|Litigator Colin Gibbons moves to Halliwells’ Liverpool office from DLA Piper; Pinsent Masons‘ Patrick Kennedy joins as head of pensions in Manchester.|
|DLA Piper corporate partner Jonathan Brown joins the Liverpool office.|
|Richard Capper becomes the fourth partner to move from DLA Piper in Liverpool.20 respectively at the start of the year – and the growth looks set to continue.|
|% increase from previous year||N/A||25||21||18||15||14||24|
|% increase from previous year||N/A||5||7||10||-1||3||14|
|U – Unavailable||Source: The Lawyer UK 100 Annual Report|
or is it destined to be another Hammonds? By Joanne Harris