Sackers’ senior partner Ian Pittaway knows pensions. In fact, he knows pensions so well that under his watchful eye the UK’s biggest pensions firm has cemented its own comfortable niche in the legal market.
Playing a central management role in a 54-lawyer firm, continuing to fee-earn, and acting as an independent chairman or trustee of several pensions funds takes a lot of love for your subject area. Fortunately Pittaway has that in droves.
It helps that pensions is also a particularly lucrative area, as far as legal services are involved – particularly if you’re at the top of your game.
Despite average profit per equity partner dipping by 11 per cent, from £860,000 to £765,000, the firm’s turnover and net profit hit record highs in 2012. Revenue reached the £24m mark after increasing by 1.3 per cent, while its net profit rose 4 per cent to £12.5m (10 July 2013).
The firm is yet to finalise 2013 results, but expects revenue and profit to be similar to the previous year.
It’s hardly surprising then that Sackers’ partners unanimously elected Pittaway into the senior partner spot for the fourth time last week. The move will put him at the firm’s rudder for another three years (18 February 2014).
Last autumn, the firm’s management sat down and pieced together a long-term strategy to help guide Sackers through these challenges as they continue to emerge. One element of the resulting “2020 plan” is for Sackers to step out of its traditional comfort zone.
With this in mind, the firm last month hired Freshfields Bruckhaus Deringer derivatives partner Sebastien Reger into its relatively new financial investment practice. Earmarked as an “accelerated area” for growth, the group advises clients on how best to invest their funds, often using complex structures.
The team is currently home to 12 lawyers, but it’s expected to double in size by 2020. Litigation and the public sector are also scheduled for a growth spurt over the next few years.
In another potentially game-changing move for the traditional firm, Pittaway refuses to write off the idea of a strategic merger – if the right suitor comes along.
“There’s no point merging with a full service firm,” he says. But a firm specialising in financial investments perhaps? “There’s nothing like that out there yet but if there were, maybe we’d consider it,” he adds.
Sackers has always been proudly single-site, but Pittaway hints that he’s not entirely ruled out the idea of a shiny new office popping up elsewhere in the British Isles. “We like being single site, but we have one or two ideas,” he says with a knowing smile. “We never say never to new offices.”
So what has driven the firm’s success?
For starters, Pittaway says, the pensions world is bursting at the seams with opportunities to win new mandates thanks to panel reviews. Given their remit, it’s good practice for schemes to hold regular reviews of their legal advisers.
“We see it as both an opportunity and a threat,” he notes. “Each year we tender for between 25 and 40 panels. Our tender success rate is about 40 to 50 per cent which is very high, and our existing clients tend to stay – I can’t remember the last time a client left the firm.”
If follows that if you can predict client activity, financial management is a relative breeze. On day one of the year, Sackers had already sold about a third of its time to pre-existing clients.
“It makes budgeting more straightforward,” Pittaway adds. “Any extra work is profit once we’ve covered costs, and there are no conflicts issues in pensions.”
Revenue-wise, it sounds like a fairly cushy set-up. But of course every firm faces its own distinct challenges. For a firm like Sackers, these primarily take the form of interference from external forces.
Firstly, both the UK Government and the EU are constantly shifting the goalposts.
“Politicians and civil servants can’t keep their hands off pensions,” Pittaway says. “It’s always a political football and when there’s a new government all the rules change again.”
He’s also dealing with the fact that procurement teams have recently caught onto pension schemes as a great potential money-spinner.
In order to get procurement professionals on board, Sackers is increasingly turning to fixed and capped fee arrangements. Pittaway reckons: “Our charge-out rate is very similar to other firms, but the amount of time that we spend working on matters is reduced as we’re so specialised.”
For an area of law too often dismissed as fairly uninspiring, pensions is actually an area buzzing with activity. And thanks to Pittaway’s flexible approach, Sackers has secured itself a sizeable chunk of the pensions pie.