Harper: Approached by 20-30 PE firms in last two years
A fast-growing commercial law firm whose lawyers work remotely has become the latest to take private equity backing, with LDC, part of Lloyds Banking Group, buying a large minority stake.
Harper James, headquartered in Birmingham, has grown to a £16m business with more than 140 people since launching in 2014.
Though the lawyers work remotely and are generally senior – with an average of 17 years’ post-qualification experience – Harper James is not a fee-share practice: almost all staff are employed.
It has a sales team in Sheffield – which generates more than 90% of the firm’s clients – and an operations team in Birmingham, with serviced offices which can be used by lawyers in centres like London, Manchester and Cardiff.
Nearly 70% of the firm’s income derives from clients on subscription plans. This is likely to have been very attractive to LDC, which also has a stake in The Barrister Group – the first chambers to take private equity investment, in 2023 – and was invested in insurance law firm Keoghs for seven years to 2020.
The firm has advised over 6,500 clients since its launch, including 2,800 in the first eight months of its current financial year – as many as in the whole of the previous 12 months.
Toby Harper, founder and chief executive of Harper James, told Legal Futures that he had been approached by 20-30 private equity investors in the last couple of years, attracted by the firm’s growth and the “clean ownership structure” – he is the sole owner.
This “just got me thinking” about how PE investment could help. “So I put together a plan and ran a proper process in the last nine months or so, which culminated in signing with LDC last Friday.” The Solicitors Regulation Authority still has to approve it.
He chose LDC because it has “a great reputation [as a] very experienced mid-market investor” and “really understood the principles of what made us different”.
He described this as an operating model where lawyers have the freedom and flexibility of self-employment without the risk, “the politics and bureaucracy that are inherent parts of a traditional law firm environment” or an “overbearing employer”.
The plan is to “move faster”. He said: “I could see that, with the disruption and the change in the sector, there’s a massive opportunity to accelerate our growth and diversify the range of services we are capable of offering.”
This will include through mergers and acquisitions, but Mr Harper was clear that they would take the form of bolt-on deals, rather than being the start of a consolidation play.
Some potential investors had wanted this but he did not, because of the difficulties of integration and also the danger of diluting the firm’s culture.
The money would also accelerate investment in technology, he said – we reported late last year that the firm had developed a knowledge transfer partnership with Aston University, backed by funding of almost £238,000 from Innovate UK.
Mr Harper stressed that he was also attracted by the non-financial support LDC could provide – Harper James “has never really needed money to grow”, he said.
“I was on job seeker’s allowance, a couple of grand in the bank, got a loan from the Startup Loan Company to set the business up and I’ve been growing organically ever since then.
“So the money is an element of it, but it’s that broader picture of everything that they’re able to offer and that alignment that we have.”
LDC partner Chris Handy, head of the West Midlands, and investment director Karen Mann will join Harper James’ board as non-executive directors, alongside Steve Weller as non-executive chairman. Mr Weller is a former chief executive of uSwitch and is also non-executive chairman of The Barrister Group.
Mr Handy said: “Today’s technology-enabled SMEs want greater flexibility and the option to work with advisers in a way that reflects how they do business.
“Harper James’ innovative model, people-first culture and commitment to delivering flexible high-quality legal services make it a standout firm in a fast-evolving market.
“We’re looking forward to supporting Toby and his team as they continue to disrupt the traditional legal sector and pursue the firm’s ambitious growth strategy.”
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