Title: Managing partner
Firm turnover: £57m
Total number of fee-earners: 445 (including trainees)
Education: BA (Hons) Law, Manchester Polytechnic
Work history: 1981 – qualified at Cobbetts;
1984 – promoted to partner;
1993 – established banking practice; 1996 – appointed managing partner
Cobbetts has often boasted that it has a successful national practice even without an office in the capital. While the firm’s focus on the regions continues, in particular through its planned expansion in Manchester and a move to new premises later this month, the North West firm has, however, overhauled its attitude towards London.
As revealed on www.thelawyer.com (19 February), Cobbetts is to launch a purely corporate finance office in the City by July and has raided City firm Wedlake Bell for two partner to head the new offering.
Michael Shaw, managing partner at Cobbetts, says: “We’re still very much a North West firm, but we do see the benefit of opening up in London. It’s something that will be important for international clients.”
It marks a complete U-turn for the firm, which has undergone extraordinary upheaval in the last decade and which for a long time laboured under the illusion that it could be a national player with no London practice.
Shaw now argues that international clients look for a presence in the capital city and see it as a sign of a successful and established firm that has the capabilities to deal with a wide range of issues.
He explains: “We value our international clients and I think we need to take into consideration their views and needs. The London office will certainly give us a lot more scope.”
However, the London opening is not going altogether smoothly. As The Lawyer reported last week (30 April), there is a potential injunction against the two partners recruited from Wedlake Bell to launch the office. But, despite this, Shaw remains positive about the launch and the firm’s place in the market.
“It’s very strange to walk around the new offices thinking about how much the firm’s changed since I joined in 1981,” he says.
When Shaw qualified and joined the firm at the age of 24, Cobbetts was comprised of a series of small branch offices across the North West. At that time the firm was known as Leak Almond & Parkinson.
“It was very different. I recall visiting smaller branch offices in the Peak District, which had just one partner and one assistant,” Shaw says. “Now we have a total headcount of 780 with several offices across the region.”
Cobbetts has, however, suffered from a tumultuous period in recent years following a large restructuring programme in 2006, which saw the loss of 30 partners, aimed at ramping up profitability from the previous year’s below market average profit results.
The firm’s initial set of LLP accounts for its 2005-06 financial year, ending March 2006, showed a disappointing 6 per cent increase in turnover to £55.4m from £52.4m in 2005. The firm’s average profit per equity partner (PEP) was below the market average at £190,000.
Cobbetts’ partner cull followed the firm’s 2004 and 2005 acquisitions of Leeds-based firm Wilbraham & Co, Birmingham-based firm Lee Crowder and the Leeds office of Walker Charlesworth & Foster.
When the firm’s 2005-06 LLP accounts were released in March 2007, Shaw admitted that they were disappointing, but attributed it to the rationalisation of the firm’s departments to create a more nationally focused firm.
“Given the major activity we’d undertaken, we had to address the overlapping of skills in departments. We had to make sure we had the right people in the right jobs,” Shaw explains.
Cobbetts’ acquisitions and increased premises spend after taking on the new firms in 2004 and 2005 cost the firm heavily, resulting in the poor profit and making a restructure vital.
In June last year The Lawyer revealed (19 June) that morale was low at the firm, particularly in the Birmingham office, where Cobbetts took over Lee Crowder. During 2005 and 2006 the firm lost a total of 24 partners in addition to its 20-partner restructuring cull.
“We’re still preparing our year-end results [for 2006-07], but I’m very confident about an improvement of more than 10 per cent to PEP. We can expect to see things getting better as the firm settles after all the changes it’s experienced this year and last,” says Shaw.
Despite its profitability downturn and partner losses, Shaw has enjoyed working at Cobbetts. He established the firm’s banking practice in 1993, which now includes Royal Bank of Scotland and Barclays among its clients, and Shaw was subsequently promoted to managing partner in 1996.
“I don’t feel the need to move on,” he says. “I’ve been very happy at Cobbetts and it’s been great to see it develop so much. There seems to be a different attitude to work and careers today. It was very different when I started out.”
With a lot of focus on Cobbetts’ financial results and restructuring, the firm has had to battle through some negative publicity to pursue its plan for an established London office.
“I think we’re doing well and the development’s great,” Shaw says. “The new London office is very exciting for us and I think this is going to be a great asset to the firm.”