“Mergers don’t work unless people work hard,” says Charles Russell Speechlys (CRS) managing partner James Carter on the combined firm’s first anniversary.
This year has seen a whole host of changes for CRS, which came together after the merger of Charles Russell and Speechly Bircham last year.
It was a merger that former Speechly Bircham head Carter describes as being “easier than others”, as both legacy firms were of a similar size, with similar work and types of clients.
However, integrating the two firms was the first immediate challenge as both firms resided – and still reside – in different offices, used different managing systems and operated on different remuneration structures.
“You have to accept that you’ll not be in the same physical locations at the time of the merger,” says Carter, who now leads the firm alongside senior partner Christopher Page and chief operating officer Andy Staite. “Some people were of course impatient about this, but there was overall acceptance.”
In any case, Charles Russell and Speechly Bircham not only had similar clients but occupied similar locations too, meaning operating between their Chancery Lane bases has not posed many problems, even one year on, Carter says.
The priority over the past year has been to house all fee-earners in one place, with the move into a permanent base expected to take place before the New Year.
“We had a target of getting everyone in one place within two years, but we’re looking to have done that within 18 months,” Carter says. “We’ll be moving into Charles Russell’s two old offices and we’re looking at planning permission for a bridge to be constructed between the two.”
The move will result in a significant reduction of square footage, with the firm planning to occupy around 100,000 sq ft in London instead of the current 130,000 sq ft. The reduction will undoubtedly lower the firm’s City property costs, which currently stand at £77.50 per sq ft, helping CRS to make back some of the money spent on the merger process.
The finances used to fund the merger had an effect on the firm’s overall average profit per equity partner (PEP) figure, which fell 8 per cent for Charles Russell partners from £346,000 to £320,000. However this, in addition to a mere 3 per cent rise in turnover to £134m, does not overly concern the managing partner who remains confident the firm is on the right course.
“We expect the money spent on the merger process will be earned back in property savings,” he says. “Our revenue is also broadly on budget and over the first four months of the financial year, we’re already 8 per cent up on what we have been year on year.”
While the move will firstly focus on the fee-earners, there is also separate negotiations going on to get some new space next door so that the remaining business services divisions can also be fully integrated.
Like the fee-earners, these groups have been exceptionally busy post-merger: Carter says the firm’s IT director currently has 86 projects on the go. These projects include the integration of telephone systems and looking at where data is stored, as well as the merging of both firm’s accounting and document management systems.
All this physical integration has meant CRS has only recently started to build its own external strategy, looking at how best to appeal to large companies that want not just corporate advice but private client expertise too.
“We want to describe ourselves as a challenger brand,” explains Carter. “We’re working with the big corporates but doing it slightly differently to lots of other firms. We want to push forward and become a leader for high-net worth individuals and entrepreneurs.”
Building a brand therefore appears to be the next item on Carter’s agenda, following its year-long push for physical integration. This, in turn, is expected to give rise to another stage in the firm’s development as it looks to grow its partner headcount, which has remained virtually static throughout 2014/15.
“Lateral recruitment stops at the time of a merger,” he comments. “But once the market understands what we’re trying to do, laterals may think about us in a different light.”