Weekly Legal News 3-7 December
A specialist criminal firm becomes wholly employee-owned, two regional firms merge to scale up and several US firms make up partners in London
Hodge Jones & Allen becomes wholly employee-owned as solution to succession dilemma
London-based Hodges Jones & Allen has become the first-ever wholly employee-owned UK law firm following a change in its ownership structure as founding partner Patrick Allen continues to plan his succession. Allen, who stepped down as managing partner last year in favour of Vidisha Josh, has accumulated 70% of shares in the firm over his time there and there were concerns that his eventual retirement would trigger a huge loss of capital for the firm.
Keen to avoid breaking up the firm into different sellable parts, and not tempted by a merger, Allen and the rest of management set up an employee ownership trust (EOT), which will manage the firm’s profits and shares on behalf of employees with bonuses dependent on profit performance. Allen and Joshi will act as trustees while finance director and business consultant Kingsley Tedder of Coach House Consultancy will act as an independent external trustee for corporate governance and compliance. As part of this novel structure, all 230 employees will be entitled to annual tax-free distributions of up to £3,600 per year.
EOTs were introduced by the Finance Act 2014 as part of government initiatives to promote employee ownership models. No law firm before Hodge Jones & Allen had switched to such a model, however several firms have stopped just short; Signature Litigation operates under a co-operative structure whereby every firm member has a fixed, non-discretionary and proportionate entitlement to firm profits while both Stephens Scown and listed firm Gateley plc provide employees with minority stakes through trusts.
Ashfords merges with Boyes Turner, creating 100-partner firm
Consolidation continues apace in the UK legal market, with Ashfords and Boyes Turner announcing their merger, planned for 1 May 2019. Exeter-headquartered Ashfords has offices across the South West and in London while Boyes Turner operates out of a single office in Reading. Both have shown growth in the past year, however Ashfords has been expanding at a much quicker pace (turnover up 43% over the past five years) while Boyes Turner has yet to get back to its 2015 revenue levels. The new firm, operating under the name Ashfords, will employ 700 staff, 100 of whom are partners, and have a turnover of around £60 million.
Legacy Ashford cited its desire to scale up operations, win new clients and expand into the South East where it has an existing client base as its reasons for the takeover. Boyes Turner, in return, will benefit from a significant geographic expansion out of Reading, something it had already unsuccessfully tried to do in 2013 as part of tripartite merger talks with legacy Blake Lapthorn and Morgan Cole.
Quinn Emmanuel, Dechert and McDermott promote London partners
Several US firms made up new partners in their London offices this week:
Philadelphia-founded Dechert promoted 3 partners in the City out of a total of 16 worldwide, with white-collar crime lawyers Matthew Banham and Timothy Bowden being made up alongside tax lawyer Daniel Hawthorne. This reverses a trend of limited UK promotions (one last year, none the year before that) and coincides with a series of lateral hires, all pointing to significant investment in London by the 1000-lawyer firm.
Elsewhere, litigation and arbitration specialist firm Quinn Emmanuel Urquhart & Sullivan promoted two in London, out of a total of 14 worldwide, with competition specialist Nicola Chesaites, the first woman to be made partner in Quinn’s London office, and commercial litigator Aidan O’Rourke. Chicago-headquartered McDermott Will & Emery also made up two partners in London, out of a global total of 28, promoting private client lawyer Lynsey McIntyre and transactions specialist Linda Zeman.
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