Byrne: Wider eco-system
A specialist alternative business structure has been bought by a listed company to boost its fast-growing national employment law business and compete with traditional law firms.
Marlowe plc has bought Surrey firm ESPHR for £3.2m, of which £2.5m is being paid upfront.
It comes on the back of its £61m acquisition last October [1] of Ellis Whittam, an unregulated employment law, HR and health & safety business set up by a solicitor.
In December 2019, Marlowe spent £6.3m – rising to a possible £10.3m over three years – to acquire Law At Work (LAW), a Glasgow-based national employment law business w that originally spun out of what was then Scottish law firm Maclay Murray & Spens.
Based in Weybridge, ESP is a law firm and HR technology business with 14 staff that generated £1.9m of revenues and £0.5m of EBITDA in 2020. Launched in 2003, it became an ABS in 2015 [2] so it could handle reserved legal activities in-house.
It developed a specialist software tool [3] in 2019 aimed at integrating large company HR departments with its employment law offering.
ESP has some 170 retained clients, including Greene King PLC, Randstad and Entain PLC.
Gavin Snell, chief executive of Ellis Whittam, said: “The acquisition of ESPHR will build on the existing strength of Ellis Whittam and LAW in the legal space, combining technology and SRA-regulated employment law expertise to deliver a truly competitive proposition against traditional law firms.”
Peter Byrne, founder and chief executive of ESPHR, said the acquisition would allow the firm “to benefit from the wider ecosystem of Marlowe businesses operating in other complementary areas”.
He went on: “Similarly, we are looking forward to working with the Ellis Whittam and Law At Work businesses to develop and build on our leading position in the mid-market as a new-model employment law firm and employee relations technology business.”
At the same time, Marlowe has bought HR software business YouManage for £1.25m and third-sector specialist HR Services Partnership for £700,000.
All three acquisitions will be integrated into Ellis Whittam, “where there is the opportunity to unlock synergies and cross-sell Marlowe’s broader specialist health & safety services to the acquired businesses’ customer base”, the company told investors.
Alex Dacre, chief executive of Marlowe, said the trio of bolt-on acquisitions were consistent with its new three-year strategy “to deepen and broaden our presence in core markets from selective acquisitions”.
YouManage helps employers improve the quality and effectiveness of their HR management processes through a new breed of subscription-based HR technology. Based in Dundee, the company supports some 200 clients.
HRSP specialises in delivering bespoke HR support to charities, town and parish councils, and not-for-profit organisations. It too has around 200 clients.
Speaking to Legal Futures last year [4], Mark Ellis, the solicitor who sold Ellis Whittam, explained how the traditional law firm model did not support entrepreneurs who wanted to build and sell a business.