London law firm in employee ownership first


Vidisha Joshi and Patrick Allen with the trust document

Hodge Jones & Allen (HJA) has become the first law firm to be entirely owned by its employees like retailer John Lewis after its equity partners agreed to sell the business to an employee ownership trust (EOT).

The move is part of a succession plan to enable the London firm’s senior partner and majority owner Patrick Allen – the remaining founder partner from HJA’s creation in 1977 – to take a less active role in the business, which has a turnover of more than £17m.

Figures from the Employee Ownership Association show how employee-owned businesses outperform the market in terms of profitability, productivity and staff engagement.

Though there are other law firms that have given staff minority stakes in the business through trusts – most notably south-west firm Stephens Scown and listed firms like Gatelely – HJA appears to be the first to have adopted an EOT.

Unregulated wills and probate provider Trust Inheritance adopted the EOT model in 2016.

HJA is moving from LLP status to an incorporated company, all of whose shares will be owned by the EOT rather than the current members of the LLP.

Mr Allen will act as a trustee, as will managing partner Vidisha Joshi, and business consultant Kingsley Tedder, who will be an independent external trustee for corporate governance and compliance.

The EOT enables all 230 employees to become beneficiaries of the firm’s activities, and each receive tax-free distributions up to a maximum of £3,600 a year.

Another tax break is that sales of shares to the EOT are relieved of capital gains tax, so long as a majority of shares are sold.

There will be no day-to-day change in the running or operation of the firm.

Mr Allen, who will remain as senior partner, said: “Becoming employee owned reflects the people-first entrepreneurial spirit that has been the backbone of HJA since 1977.

“It provides continuity for our partners and staff, and therefore our clients. It is the perfect model for a firm like ours.

“I wanted to ensure that the firm could continue to grow in the same way as I intended when I founded it over 40 years ago.

“We have a fantastic team and we help people who may not always be able to access advice and redress. I see this as a way in which my vision can go forward and thrive into the future.”

Ms Joshi added: “Under Patrick’s stewardship, the company has grown from a small practice on Camden High Street, in London, to the firm it is today, helping clients nationwide access a diverse range of legal specialists and leaders in their field.

“Creating the EOT was the best way of ensuring Patrick’s legacy and of safeguarding the firm whilst making sure that the ethos and values remain intact.”

Deb Oxley, chief executive of the Employee Ownership Association, said: “This is a pioneering move in the legal sector, at a time when many similar partnerships are challenged by the succession dilemma of securing the future of an LLP-structured firm.

“By widening ownership of the business to all of its employees via an EOT, Hodge Jones Allen is securing the future of the business, including its ethos and values, whilst engaging all employees in its vision and future success.”

HJA has represented victims in many high-profile cases, including the Grenfell fire, the King’s Cross fire and the Marchioness ferry disaster.

The firm also represents Neville Lawrence, the father of Stephen Lawrence.




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