chief executive David Gray describes himself as “not a particularly religious man”, but he has given up alcohol, chocolate, bread, cake and biscuits for Lent. More zealous than religious, perhaps?For all Gray’s privations, he remains upbeat as he describes the future for Eversheds.
“We want to be the most client-centred international law firm in the world,” he enthuses between mouthfuls of lettuce. “But when I took on this role four years ago, we weren’t as sure where we wanted to go.”
Gray says that as little as three years ago much of the partnership was still unconvinced of the merits of going global. Many partners saw it as an expensive and potentially distracting exercise for a firm whose partners were already turning a relatively satisfactory national average profit per equity partner (PEP) of £287,000.
“International [expansion] is connected to our entire future,” Gray argues. “But when we were looking at this five years ago and asked clients, ‘do we need an international operation?’, most said ‘not really’. That was why we had a lot of our own people thinking going international was a waste of money. But that’s changed, and management had to predict that change before it happened.”
The firm’s Shanghai office, opened in August 2006, is a tangible sign of that. Gray says its budget is “severely on the up”, while the firm is aiming to grow it from its present six lawyers to 15 lawyers within two years. The firm also has three Chinese lawyers in London.
In the Middle East Eversheds has had an alliance in Qatar with Qatari firm Al-Jufairi for some time, and was granted a licence to practise as an independent firm last year.
With regards to India, the jurisdiction apparently on every law firm managing partner’s lips, Gray says the firm does not expect the market to be liberalised before 2009. However, he claims Eversheds is “gearing up and will be ready when it does”.
As well as a strategy for international growth, June 2006 also saw Gray announce plans that included a focus on developing the firm’s London office and increasing profitability, the latter objective being one that, surprisingly, needed some selling to the partnership.
“Historically we had a situation of partners saying, ‘there’s too much focus on the numbers’, but management in turn replied, ‘there’s not enough’,” Gray says.
The firm is targeting a PEP of £600,000 by 2009. The figure stood at £422,000 at last financial year-end.
“Some partners said that was too much because the drive to increase profit that much that quickly inevitably places pressure on them,” says Gray. “But just by showing them where PEP was three or four years ago compared with now, they realised that we can’t just stand still.”
Gray views handling the divergence of opinion as an inevitable challenge of being chief executive. “If you’re the managing partner of any big firm you have to move ahead of the pace of the partnership, but without losing contact with your partners,” he says.
Keeping the partners happy is central to another ambition of Gray’s: to make Eversheds “a great place to work”. This superficial and rather vague concept includes skills coaching at both associate and partner levels and sitting down with partners individually to agree career objectives jointly.
This, says Gray, “is so that those objectives feel natural and comfortable” and so partners feel those objectives are their own, and have not merely been imposed on them from above.
But none of this came easily, to Gray or his firm. “Lawyers aren’t natural people managers,” he admits, “because as lawyers our job is to anticipate the worst and learn never to place trust.”
The other pillar of the new strategy is Eversheds’ market focus. Gray says this includes the concepts of “service excellence and how to achieve it, and how to strengthen our sector approach”.
In essence, this involves boosting the firm’s strength in its core groups – public sector, telecoms, financial services, retail, energy and central government – and making sure clients know that “because we have more lawyers in the UK than anyone else, we have more sector knowledge”. Certainly Eversheds has a lot of lawyers.
While we are on numbers, Gray proudly observes that Eversheds is the number four firm in terms of the number of FTSE100 clients it works for and the number three when it comes to the FTSE250. The average deal Eversheds handles now is valued at £75m, Gray adds, while just three years ago it was £35m.
Gray admits that Eversheds “doesn’t do the same value transactions as the magic circle”, although there are exceptions. Last year, for example, the firm advised Caudwell on its £1.5bn sale to private equity houses Providence and Doughty Hanson.
It is a deal that suggests that tapping into magic circle-style deals occasionally is not beyond Eversheds, but it is hardly one of Gray’s central objectives. Tapping into the international marketplace, raising PEP and beefing up London are. And there is still some way to go.