National law firm Setfords Solicitors has become the latest to take external investment after securing a £3.75m injection from the Business Growth Fund (BGF) to support its expansion plans.
BGF has taken a minority stake, the second time it has done so with a law firm after putting £5m into McMillan Williams in early 2015.
BGF also introduced Setfords to ex-Interflora CEO Steve Richards, who has now been appointed as its non-executive chairman. Mr Richards is also currently the chairman of musicMagpie and No1 Traveller.
Setfords, which has become an alternative business structure as a result, will use the funding for investment in digital marketing, technology enhancements and the recruitment of additional legal consultants.
Founded in 2006, Setfords is a ‘dispersed’ firm with over 160 fee-sharing consultant lawyers around the country, backed by a 60-strong team based at the Guildford head office, providing them with back-office and administrative support.
The firm has been growing quickly, recruiting 65 consultants in the past 12 months, a 38% increase on the previous year. In its last financial year, revenue rose by over 20% to top £8m.
Founder and joint CEO Guy Setford said: “We have experienced significant growth over the past 10 years, and established a brand and business model that is trusted by independent lawyers and clients.
“We will continue to grow, recruit and invest in our infrastructure – BGF’s funding allows us to pursue our plans without disrupting the current model or management team.”
He runs the firm with fellow CEO Chris Setford, his cousin, and managing director David Rogers.
Ben Kirby, an investor at BGF who will join the board of Setfords, said: “As a relatively young law firm, Setfords has already built a nationwide footprint under the leadership of CEOs Guy and Chris Setford.
“Through a combination of innovative thinking, smart technology and a great brand, the company is well-placed to become an even bigger business and we are delighted to be supporting their ambitions.”
BGF is an independent company with capital of up to £2.5bn and is backed by five of the UK’s main banking groups – Barclays, HSBC, Lloyds, RBS and Standard Chartered. It has invested £1bn to date.
It describes itself as the UK’s most active provider of growth capital to small and mid-sized businesses. The companies it backs are privately-owned or listed on AIM, and typically have revenues of between £5m and £100m. BGF makes initial investments of between £2m-£10m.
Setfords is not the first dispersed firm to attract investment. In 2014 Keystone Law took £3.15m investment from boutique private equity firm Root Capital in return for a 35% stake in the business.
In 2013, Excello Law joined James Caan’s Hamilton Bradshaw portfolio of companies, but at the time had not taken any money from the entrepreneur.