Southern England commercial law firm EMW has made the first of what it says will be a series of acquisitions of specialist consultancies as it looks to diversify beyond legal work.
Meanwhile, another firm that has already diversified is looking to a future where it offers a full range of professional services.
It has bought property tax consultancy STax, which specialises in capital allowances claims advice for property developers, owner occupiers and investors.
STax employs 20 people in its Brighton headquarters and offices in London, Edinburgh and Plymouth. It says tens of billions of pounds have gone unclaimed due to the complex and low-profile nature of capital allowances.
EMW said the deal built on its property practice “by offering clients additional surveying, tax advice and claims handling for capital allowances”.
EMW has 29 partners and 68 fee-earners in offices in Gatwick, London and Milton Keynes. The firm, which has been an alternative business structure (ABS) since 2016, is targeting expansion into other areas of professional services, which it said “is likely to include acquiring further boutique consultancies in niche service areas”.
Partner and co-founder Ian Morris (the ‘M’ in EMW) said: “We’ll still be investing most heavily in our legal teams but we see the opportunity to grow other consultancy work alongside law.
“STax is the clear independent market leader in capital allowances advice. Bringing their skills into the EMW family was the best first step we could make in implementing our diversification and growth plan.
“The next step for EMW is to acquire more market-leading specialist consultancies in the South East of England, in areas that align with EMW’s core practices and genuinely add value for our clients.”
Meanwhile, an ABS that has already diversified – Chester-based law firm Hillyer McKeown – has received approval for a second ABS.
HM Legal Services will act as a holding company for its non-legal businesses and, according to group chairman Steve Harvey, also be the business “that delivers back-office functionality to the balance of the businesses”. In essence, it means the subsidiaries will be “just profit centres”.
The firm currently has two non-legal businesses: HM Financial Services and business consultancy HM Business Growth, and Mr Harvey said plans for an insurance broker first discussed in 2015 would be announced later this year.
He said HM Business Growth had been a success, particularly its ‘virtual board’ offering to smaller SMEs “that perhaps don’t have the breadth of business skills”.
Equally the financial services arm, which was once in-house but in 2010 became a joint venture with independent financial adviser Greystoke, had “done very well for us”.
He added: “We continue to drop clients into it. The trick for us will be now to remodel it slightly so that its focus is a little less on managing existing money and providing financial services to our SME/OMB clients and the managers of them.”
Mr Harvey observed that the firm’s lawyers had enthusiastically bought into the idea of cross-selling non-legal services, “more so now they have started see the traffic come the other way”.
He explained: “As we are doing work with clients in relation to their growth expectations, then equally we have started see commercial legal work in corporate legal work and employment work starting to flow back into the law firm from those clients.”
He predicted that professional services would in future be done under one over-arching company.
“The Nirvana for me has always been not so much the provision of a diversify professional services network of businesses, but more of the cohesion and continuity of advice that you can generate from professionals all working under one brand – whether they be legal professionals, accounting professionals, financial services or management consultants.”
He continued that his mission was to put the firm in a position where it could break out from the confines of legal instructions and advise clients based on an intimate knowledge of why they were in business what they intended to do in the future.
“I imagine those clients will see their legal adviser as taking a step out of their remit to even ask those sorts of questions.
“Having said that, it is right that we should advise more in the knowledge of what our client wants to do rather than advising in a vacuum, but it has become the case that lawyers take a very narrow stance in relation to their instruction.”
Earlier this month, listed law firm Gateley made its sixth acquisition of a non-legal business after adding a property and construction consultancy to its portfolio at a cost of up to £6.75m.