Martin Holdsworth (l) and Ken Fowlie
A law firm that limits its solicitors to 25 billable hours a week has seen annual growth of 40% over the last two years.
IDR Law, the only law firm in the country specialising purely in inheritance and trust disputes, has created a business model that consistently delivers annual growth – without exposing its lawyers to burn out.
In less than a decade, Yorkshire-headquartered firm has built the largest contentious probate team in the UK, with 27 lawyers and 500 referrals each month. It will next week open an office in London.
Since 2017, IDR Law has worked on over 20,000 inheritance disputes, many referred by a network [1] of 1,800 individuals and 350 companies, made up of law firms, will writers, wealth advisors and probate administration organisations.
This pipeline helped secure £3.25m of private equity investment [2] from BGF, the British Growth Fund, in 2023, which took a 28% stake.
IDR Law has managed to deliver significant, sustainable growth – 17% in the first year after BGF’s backing as the firm invested, and then 43% and 46% in the following two years – all whilst maintaining an EBITDA yield of 25% and keeping billable hours capped at a maximum of 25 per week.
Speaking at last week’s Law Firm Growth Summit, chief executive Martin Holdsworth said his business model sounded counter-intuitive to many senior partners and investors. But his message to the legal sector was clear: “It works.”
He said: “In 2017 when we kicked off I had some fairly strong beliefs about culture. I’ve been described as a passionate advocate for kindness and flexibility in the workplace, which I absolutely love – because it’s genuine.”
“I grew up in law firms struggling to understand why people were being driven to breaking point just to advance their careers. You could bill £200,000 in a year, and be rewarded with a pay rise, but you’d then get a £250,000 target for the following year.”
“I just couldn’t understand why firms were not bringing more people in and capping them, which is what we do. We have 25 billable hours a week. Nobody is allowed to go over 25 hours.”
But despite the human and financial toll working excessive hours takes, many lawyers still saw higher targets as the key to success, Mr Holdsworth said. They assumed the IDR approach could make money or create value.
Mr Holdsworth said: “They’re wrong. We have an 8% write off in terms of the time going down. There is no wastage. It’s very lean. No PE invests in anybody who is not making money year on year.”
When a case is referred to IDR Law, it is triaged by a non-lawyer who is trained to assess the case and distribute the work across the legal team, making sure everyone gets 25 billable hours each week.
IDR Law also uses bespoke technology to carry out work such as drafting wills, assessing risk in estate planning, and spotting trends from the data gathered from thousands of cases.
Mr Holdsworth said: “The tech is in place so the lawyers can do what the lawyers do, at the right price, so we can pay them well. And because we know everyone is on 25 hours a week, we know how many cases we need to keep them at that level. That’s how it operates.”
Asked what happened if someone billed more than 25 hours, Mr Holdsworth said he would first ask them if they were alright and then suggest allocating the extra hours to someone who maybe had billed 23 hours.
“If you keep the target the same every year, people progress by doing other things I need them to do in the business.”
Speaking on the same panel, Ken Fowlie, chairman of Stowe Family Law, said he saw real value in the IDR Law model, because it gave PE investors “the repeatable, predictable revenues” they look for.
Mr Fowlie said: “A business where you have a group of people who are more consistent in terms of their performance is a better business than a business where you have a handful of people who are really good and a handful who are really poor.
“One of our objectives has been to narrow the range of performance between our best and worst performers. Over time that’s what we’ve achieved and it’s a better business than one where I’ve got a handful of high performers, because the first question you’re asked is that ‘You’ve got key person risk – what’s going to happen if one of them leaves? It’s going to blow a hole in your revenue’.”
More consistent performance should lead to “longevity and lower churn”, and “a business that’s got more value, because the value is in the platform, not in any one individual”.
Mr Holdsworth added that the model also allowed the firm to know how many cases his lawyers needed to keep them at the right level. Understanding the balance also meant the firm knew if it needed to recruit or get more work in.