Fast-growing consumer law firm Taylor Rose TTKW has more than doubled in size after taking over private equity-backed McMillan Williams (MW) – and has taken investment of its own, Legal Futures can reveal.
MW, which has 24 offices across the South-East and 420 staff, entered administration on Tuesday and was sold in a pre-pack yesterday.
Taylor Rose chief executive Adrian Jaggard said the firm “aims to be a leading player in the UK consumer law market”, and more acquisitions were likely in the future as it continued to pursue a growth strategy on the back of “the credibility, buying power and efficiency” its increased size provided.
The combined firm has offices across the country, from Sussex to Cumbria, and will be headquartered in Peterborough and London.
MW’s turnover for the year to 30 April 2019 was topped £31m, little changed on the previous year, with an operating profit of £312,000 turning around a £982,000 loss in 2017-18.
However, turnover for the current year is likely to be around £25m, as the firm has been hit by uncertainty in the property market last year caused by Brexit.
Taylor Rose expects income to near £20m in the current year, and Mr Jaggard told Legal Futures that “we are reviewing the whole structure” of the two firms, which for the time being will retain their separate branding.
He said: “We do hope to make efficiency savings. It’s fair to accept that, as a professional services business, this will probably include people and could include offices.”
Taylor Rose has grown quickly since opening in Peterborough 2009 to have 11 offices – coming out of what was originally a costs business, which is still an important part of its practice – and has also been rapidly developing a consultant solicitor programme, mixing a ‘new law’ operation with a more traditional practice.
To date it has always paid for acquisitions out of retained profits, and Mr Jaggard said that, on this occasion, “as part of completion, there has been some investment taken on board”. He declined to reveal the source of the investment.
The deal makes Taylor Rose the fifth largest conveyancing practices in the country.
Joint administrator Sean Bucknall, a partner at Quantuma, said: “Historic debt and limited headroom within existing facilities has meant that MW was unable to secure additional working capital to weather the current economic climate.
“The sale to Taylor Rose provides the best possible outcome for the firm and its creditors as well as protecting clients’ interests, preserving hundreds of jobs and creating a strong combined brand.
“The high fixed cost base and highly leverage model of many law-firms leaves them particularly vulnerable to the fall-out from the Covid-19 pandemic.
“We are already seeing many law firms already in serious financial difficulty and unfortunately this administration will be the first of many.”
Private equity house BGF, which invested £7.7m in MW in February 2015, is not involved in the merged firm.
A spokeswoman said: “BGF is pleased that McWilliam Williams has found a new home as part of an enlarged group with Taylor Rose, providing continuity of services to client and safeguarding jobs.”
Mr Jaggard said the two firms have been talking since last autumn. “What drew us was the underlying quality of the lawyers and clients. They are very well integrated in lots of communities and hold lots of goodwill in those communities and that has a lot of value attached to it.”
MW has had bad press in recent years, particularly after the case of Sovani James, a solicitor found to have backdated and forged documents. The Solicitors Disciplinary Tribunal found that a root cause of her misconduct was the firm’s culture and the pressure it exerted on her to meet billing targets.
Mr Jaggard said “we were aware of [the problems] and had to understand them”, but they were historic. MW’s leadership has changed since then.
MW chairman John McMillan said the Taylor Rose “platform” offered opportunities for both clients and staff.
“A shared culture, complementary services and distinct geographies made Taylor Rose an obvious home for McMillan Williams and there is enormous potential to bring our respective strengths to bear moving forward.”