Eversheds: Brummie ache” />If you believe Eversheds’ chief executive David Gray, his firm is a great place to work and will have no difficulty hitting the challenging new targets put in place by a recent strategic review.
If you believe some of the firm’s former partners, though, the firm is breaking up from the inside out, starting with the Midlands. “If there were a war between London and Birmingham, London just won,” one comments.
Conflict between Birmingham and London is a serious issue for Eversheds. It was in Birmingham that the original four members of the Eversheds alliance, including Midlands firm Evershed & Tomkinson, first came together to form a single firm. The office is the firm’s spiritual home and is very much part of its regional roots.
But Birmingham continues to cause the London-based management headaches. One London source calls Birmingham a “basket case”, while another describes it as “a significant management problem”.
Eversheds’ strategy is to see its London office grow to a £100m-plus business, addressing Gray’s concern that Eversheds in the City lacks critical mass in key practice areas, such as banking and finance and private equity. London managing partner Cornelius Medvei, though, is confident of success, telling The Lawyer: “We’re growing faster than most people are.”
But Eversheds’ London office is still dominated by its property practice, which firmwide brings in more income (£77.5m) than the entire City office (£70m). Medvei was previously head of real estate, and his successor Lee Ranson is also in London.
The rest of the firm’s management is also now increasingly centred in the City. John Heaps, head of litigation, moved to London from Leeds in late 2005. Corporate head Peter Halpin is also in London. In addition, nine of Eversheds’ 19 ‘product group’ heads are in the City, with the most recent arrival being real estate finance head Nicholas On, who was relocated from Newcastle.
“In London we have the opportunity to develop a really strong City practice, which would benefit the regions and benefit our international aspirations,” says Medvei, adding that property will be key to the growth.
But it has to make the strategy work. Building London through hires is one thing. However, Eversheds’ roots and much of its work are in the regions, and keeping the regional offices invested in the firm is vital. Twelve of the 13 partners to leave Eversheds in the 2005-06 financial year were based outside London. The exception was employment partner Elaine Aarons, who quit for Withers in April 2006.
The hardest-hit offices in the past 18 months have been Birmingham and East Anglia. Eversheds’ Norwich office lost three corporate partners and one property partner to Mills & Reeve in May 2005, quickly followed by the departure of Cambridge-based IP partner Patrick Farrant to Taylor Vinters.
Meanwhile, Birmingham has lost IT specialist Sally Mewies to Wragge & Co, corporate finance partner Chris Garnett to Shoosmiths, corporate partner David Stevenson to Pinsent Masons and, most recently, litigator Steve Barker to Reed Smith.
In the same period (since May 2005), Eversheds’ Leeds, Newcastle and Nottingham offices lost one partner each. Manchester lost two and London three.
In contrast, Eversheds’ lateral hire policy has focused on London, where 10 laterals have been made during the past three years against six in each of the North and central regions. There have been slightly more partner promotions in the regional offices in the same period, with 18 new partners in the Midlands, 17 in the North and 13 in London.
Most of Eversheds’ rainmaking firepower is in the regions. For example, Manchester corporate partner Danny Hall recently brought in the £1.46bn sale of The Caudwell Group to Providence, earning a glowing recommendation from Phones 4u owner John Caudwell.
Other key clients, such as Legal & General, are serviced from across the firm’s network of regional offices. Being in Leeds does not preclude a partner from being the main contact for a company based in the South.
Gray and Medvei claim that they are committed to the regions. “There has to be a benefit for the offices outside London,” says Gray. “It’s just being clear with people that being focused on growing in London doesn’t mean we don’t want to grow outside London.”
Medvei says Eversheds is trying to hire for Norwich and Ipswich, adding: “We’ll grow them more strongly.”
Here Gray chimes in with his ‘great place to work’ mantra. Eversheds does appear regularly in The Sunday Times’ ‘100 Best Companies to Work For’ list and has a good reputation among graduates. Nevertheless, former Eversheds partners greet the catchphrase with disdain. “Eversheds is a great place to work, except if you’re a partner,” says one.
Another is less caustic, saying Eversheds’ problems come from swift expansion. “It’s not a miserable place,” the partner says. “It’s grown very quickly and therefore doesn’t really have a single identity. It’s not a hard place to work, but it’s not that great.”
The same partner suggests that one of the obstacles to Eversheds achieving its strategic ambitions is the lack of a strong figurehead. Gray is a less messianic figure than his counterparts at competing firms, such as Nigel Knowles at DLA Piper or Mark Jones of Addleshaw Goddard.
Sources say the only way Eversheds will succeed in hitting its £600,000 profit per equity partner target in three years is by squeezing its equity partnership even tighter than the 47 per cent it currently stands at. Gray and Medvei counter by citing the firm’s new merit-based lockstep, which comes in at the start of the next financial year. The lockstep will be entirely performance-based.
“People will be equity partners if they’re making an equity partner contribution,” Medvei says.
Eversheds promoted 10 partners to equity in 2006-06 and is planning to try to hold the equity partnership static during the next three years. Gray adds that the firm does not “anticipate de-equitising”, but the fact remains that the equity partnership has shrunk each year for the past four years, while the number of salaried partners has risen slightly.
But the London v regional issue is not the only one preoccupying Gray. His sights are set outwards. Internationally Eversheds continues to seek alliance partners in new regions. During the three years that Gray and chairman Alan Jenkins have been at the helm of the firm, Eversheds has signed up to no fewer than 11 new associations with foreign firms, including Germany’s Heisse Kursawe Rechtsanwälte Partnerschaft, Wierzbowski I Wspólnicy in Poland, Piergrossi Bianchini in Italy and most recently Dublin’s O’Donnell Sweeney.
The alliance system is an easy way for Eversheds to pick up an overseas presence without having to commit to a merger or organic growth. If strategy divides then the alliance ends.
In the past months, however, Eversheds has begun to pursue a different international strategy. In September 2005 the firm brought to an end its five-year alliance with Malaysia’s KhattarWong & Partners after a rift over China. In September 2006 Eversheds announced that it had gained a licence to open its own office in Shanghai.
That was followed swiftly by a similar licence for the new Qatar Financial Centre, although Eversheds’ relationship with its associated Qatari firm is not being dissolved.
Francis Hackett, managing partner at O’Donnell Sweeney, says the firm is adding ‘Eversheds’ to its name in January and that so far the alliance is proving beneficial, with both firms referring work to each other on a regular basis.
On the Continent the task of growing the Eversheds network has been handed to Michael Brown. Formerly London managing partner, Brown stood against Gray for the role of firmwide managing partner in 2003, losing by a narrow margin. The result proved Gray is able to win over the doubters in a tight contest.
Gray points out that the firm’s wide practice area base enables Eversheds to survive whatever the market throws at it. However, it reinforces the fact that Eversheds cannot afford to ignore its roots as London balloons. In their own ways the regional volume businesses and the niche areas such as white-collar crime, which are not pursued by the firm’s competitors, are crucial to the firm’s strategy as a large City office.
Eversheds’ management maintains that the strategy is all about “growing and developing” the business. It is confident of success in the long run. “We’d rather be the tortoise than the hare, as we always get there,” says Medvei, who adds with an uncharacteristic flourish: “I think the opposition should be very afraid.”
1988: Birmingham firm Evershed & Tomkinson, Sheffield’s Broomheads & Neals, Alexander Tatham & Co from Manchester and Norwich firm Daynes Hill & Perks get together to announce their intention to become a single partnership by 1993.
1988-95: Hepworth & Chadwick (Leeds), Ingledew Wright (Newcastle), Phillips & Buck (Cardiff and Bristol), and Wells & Hind (Nottingham) all join the Eversheds network.
January 1995: London firm Jaques & Lewis joins the network.
1 June 1995: The separate firms begin operating under the ‘Eversheds’ name. Hepworth & Chadwick and Alexander Tatham merge.
1 May 1996: The insurance, corporate and property groups of City firm Waltons & Morse join Eversheds.
1 August 1997: Eversheds merges with Newcastle firm Wilkinson Maughan.
1 May 1998: Eversheds merges its profit centres. The firm acquires a large part of Frere Cholmeley Bischoff’s London office, as well as its Paris and Moscow offices. Danish firm Sandal Lunoe & Co joins the alliance.
1 November 1998: Cambridge firm Palmer Wheeldon becomes the latest to be swallowed up by Eversheds.
2000: Adrian Bland, Michael Brown, John Heaps, David Vokes, Colin Brown and Geoff Harrison draw up a blueprint for an integrated firm. Eversheds begins an alliance with Malaysian firm KhattarWong & Partners.
1 May 2000: David Ansbro becomes
Eversheds’ first firmwide managing partner.
2002: Italian firm Piergrossi Villa Bianchini Riccardi joins the Eversheds alliance.
February 2003: Eversheds signs an agreement with Qatari firm A Rahman Mohamed Al-Jufairi.
1 May 2003: David Gray is elected managing partner.
2005: Eversheds signs up with German firm Heisse Kursawe Rechtsanwälte Partnerschaft and begins an association with Wierzbowski I Wspólnicy in Poland.
September 2005: The KhattarWong alliance is ended after a disagreement over strategy.
1 January 2006: An alliance with Dublin firm O’Donnell Sweeney begins.
1 May 2006: Gray is elected to the new role of chief executive. Alan Jenkins continues as chairman, while London managing partner Michael Brown becomes European managing partner. Cornelius Medvei takes over in London.
September 2006: Eversheds secures a licence to practise in Shanghai.