Bott: EOT preserves independence and culture
Leading consumer law firm Bott & Co has become the latest to embrace employee ownership as its three founders look towards exiting.
Paul Hinchliffe, David Bott and Gary Froggatt decided to sell the 25-year-old Cheshire-based firm to the staff because they were “the best custodians” offering “the best home” for the business.
Mr Bott, the senior partner, said: “What we’ve built over the last two decades has only been possible because of the incredible people around us. The care, dedication and professionalism our team brings every day is what defines Bott & Co.
“This transition ensures the people who have contributed to our success are directly invested in our future, while preserving the independence, culture and values that have always mattered to us.”
Bott & Co now turns over more than £12.5m a year from low-value consumer claims such as flight delays, mis-sold car finance and road traffic accidents. It handles more than 100,000 cases each year.
The three founders began to think about a transition two years ago, driven by age.
Mr Hinchliffe, the managing director, told Legal Futures: “The firm was approaching 25 years, and we were approaching our 60s. It was the right time to start thinking about transition. With the business cycle, and the cash in the business, it was the right time.”
He said the shareholders considered all the options – including potential mergers and approaches from private equity investors – but decided an employee ownership trust (EOT) was the one to focus on.
He said: “The hardest thing for any law firm is getting really good people into the business. We’ve got a great team, of around 130 people now, and a great culture. The EOT structure allows David, Gary and me to start a phased withdraw from the business, and keep the team and the culture in place.
“The new structure is like the John Lewis model, and I think everyone has a soft spot for that. It’s an egalitarian thing to do. So this is a proud moment for us all.”
To prepare for the transition, Bott & Co has appointed a new chairman and expanded its board from three to five members.
It took eight months to address the legal, taxation and accountancy issues involved.
Work is now taking place to identify which employees will form the new senior management team, taking over from the original founders as the new leaders and decision-makers.
Mr Hinchcliffe said he could already see benefits, for the team and the firm: “Being an EOT helps with staff retention. The team can engage with the business in a different way, with a sense of ownership and responsibility. I’ve already seen people saving paper clips.”
The transition is expected to take two to three years, with the founders cutting back on the amount of time they spend at the firm, and how much management control they have.
Mr Hinchcliffe added: “I like ownership, and responsibility, but after 25 years now is the time to bring in new people and new energy, who will take on that responsibility, with the business being owned by everyone.
“Over the next two to three years we will be stepping back, spending less time in the office but still wanting to contribute to the business as we trust the new leaders to take the firm forward.”
Mr Bott described the move to an EOT as a “natural next step”. He said: “Our mission remains the same: helping consumers stand up for their rights and secure the compensation they deserve, with people continuing to sit at the heart of everything we do.”
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