Wragges’ new leadership will have to boost corporate” />Midlands giant Wragge & Co recently announced a major reshuffle of its senior management team and corporate practice, but the strategy behind the move looks slightly muddled.
Corporate rainmaker Ian Metcalfe has been elected to take over as managing partner from Richard Haywood, who will lead the firm’s new international business development team.
Other changes include the appointment of David Vaughan as the new group leader for corporate. Vaughan takes over from Jeremy Millington.
While the management restructure has been touted as a bid to boost the corporate practice, soon-to-be managing partner Metcalfe flatly rejects any suggestion that the corporate department was the focus of the shake-up.
“It was pure coincidence that the movements came from the corporate department,” he claims. “It was about putting the right people in the right place and moving forward.”
But it is undeniable that Metcalfe’s accession to managing partner comes as the firm is in recovery mode following a couple of disappointing years.
While the firm’s overall figures have improved, corporate was being left behind. Real estate, for example, turned over £25.8m in 2005, a rise of 9.3 per cent, and boasted 27 partners. But for corporate, a traditional stronghold of Wragges in Birmingham, it has been a different story.
Wragges’ corporate practice experienced a steady decline between 2002 and 2004: in 2002 there were 21 corporate partners billing £11.1m out of a total turnover of £77.8m; in 2003, the practice had 20 partners, who generated £10.3m from a total turnover of £79.2m; and in 2004 there were 21 partners earning £9.5m out of a total turnover of £79.3m.
This year the figures improved, with 18 partners generating £10.3m from a total turnover of £88.4m.
Even more tellingly, during the past 12 months, no senior associates were made partners, despite the departure of Peter McLintock to Hammonds and Nick Smith to Nomura.
The lack of movement within corporate has been a major source of frustration for associates, many of whom have left for promotions in rival firms.
Indeed, a Wragges insider claims the firm has been “haemorrhaging” associates during the past year.
“Associates are leaving in droves because it’s just so difficult to be made partner there,” the source says. “This is going to continue to have a flow-on effect on the corporate department as talented associates leave to take up better job offers at other firms.”
And Wragges’ current corporate leader Jeremy Millington admits that the number of associates who have left during the past year is equal to that of the previous three to four years combined. He blames market conditions.
“That’s a reflection of the corporate market at the moment,” argues Millington. “You only have to look at the back pages of The Lawyer to see the number of recruitment firms advertising for corporate lawyers.”
So Vaughan, in his capacity as new group leader for corporate, has a big job in front of him – and big shoes to fill.
Metcalfe, a corporate partner since 1992, helped bring Wragges to prominence in the Midlands to start with. He is also client partner for 3i, Bupa, General Electric, Hill & Smith Holdings, LogicCMG, Misys and Unilever.
So why take a successful corporate partner out of his element?
One former Wragges senior associate is baffled by the reshuffle. “Ian Metcalfe was not only a rainmaker, he was the rainmaker for the corporate team,” the source says. “Quite frankly, I think Ian’s election to managing partner is going to be a huge blow to the corporate team. They’ve effectively taken him away from what he does best and put him in a paperclip-counting role.
“I’m sure that Ian is saying that he’ll still be managing client relationships, but as the managing partner of a firm with an £80m turnover and 1,000 staff, something has to suffer.”
On the other hand, Metcalfe insists that he can use his experience to attract more business across the board for the department he has left.
“To be fair, a lot of the big deals I worked on were supported by excellent corporate lawyers,” explains Metcalfe. “But I hope to use my skills to bring in business from major corporates for all of our practice areas, not just corporate.”
Millington agrees that Metcalfe’s promotion could test the team’s capabilities. “It’s going to be a challenge,” he says. “It means we’re going to have to keep on top of client relationships and ensure the clients are happy with our service. Thankfully, our clients understand that they’ve hired Wragge & Co and not necessarily individuals.”
Metcalfe will certainly be busy. As managing partner, he takes on responsibility for five group leaders: Adrian Bland for real estate, Eddie Breen for dispute resolution, Kevin Lowe for HR, David Vaughan for corporate and Julian Pallet for finance, projects and technology. He will also manage the firm’s nine-strong senior management team, which is responsible for 482 support staff.
When asked about how he will implement the firm’s strategy to fast-forward its drive into the major corporates market, Metcalfe says Wragges will continue to secure work by developing lasting relationships with its clients. In the one breath he insists that the firm is moving forward and in the next he says that, aside from each individual taking a different management style, he has no plans to alter the current arrangements.
“I believe in walking the walk, not just talking the talk,” he says. “If your staff are all motivated, then the business is going to go well… Yes, we’ve had a restructure, but that doesn’t mean the strategy has to change.”
For the moment, Wragges’ corporate team has had a strong start to the year. The firm has closed 71 transactions with an aggregate deal value of £1.55bn and an average deal value of £22m. This compares favourably with the heady deal volume seen in 2000.
The top completed deals during the past 12 months include the £235m takeover of ITNet by Serco, 3i’s £116m disposal of BetterCare Group and James Beattie’s £69.4m sale of House of Fraser.
Millington argues that the success of the corporate department is cyclical. “Our biggest slumps came in 2003-04, but we’ve had a good year this year and we’re predicting even better results next year,” he says. “Our end-of-year results are dependent on the economic cycle and, at the moment, there’s been an upturn.”
It’s an encouraging scenario – but Metcalfe and his successor David Vaughan will need to be ruthless in winning work. London has been an expensive distraction, but securing home advantage has to come first. Time to boost Birmingham. Time to find some more rainmakers.