Taylor: Every partner is on board
The growing number of consolidators in the legal market does not mean there will be a bidding war for attractive law firm targets, the newest player in the field has said.
Meanwhile, the managing partner of Higgs – the law firm bought by August Equity – has reassured would-be partners that still have a route to equity ownership.
We reported on the acquisition [1] last Friday and yesterday published the first part [2] of an interview with August director Katie Beckingham and Higgs managing partner Nick Taylor.
With the growing number of platforms looking to acquire – such as Lawfront, Adeptio and the MAPD Group – will what is currently a buyer’s market turn into a seller’s one for law firms?
Ms Beckingham said this was a good time for those running small law firms who were looking to exit, but poured cold water on the idea of a bidding war.
“There are so many firms in the country and all of these consolidators have different approaches. They’re all looking for slightly different things in the businesses that they’re speaking to.
“Inevitably as with any sector, there will be a few businesses that we’ll speak to that will also speak to a couple of the others, but ultimately cultural fit will determine which business they are going to fit best with.”
August has taken a majority investment, but the partners retained an ownership stake and would-be partners can continue dreaming of it too, Mr Taylor said.
“I’ve told people internally who have aspirations that they can achieve exactly the same – it’s just partnership looks slightly different and the equity element of partnership looks slightly different.”
And for those who do not want partnership – a growing group in the solicitors’ profession – there are “other very clever and fancy things that you can offer in terms of benefits and packages to attract and retain them”.
Higgs traces its history back 150 years and Mr Taylor acknowledged that his partners took some time to get their heads around the notion of private equity investment.
“We talked about our purpose, our vision, where we wanted to get to, how we wanted to grow and how we were going to grow. It was a time-consuming, thorough exercise because we wanted to make sure that every single one of our partners was on board… Everybody, to a person, is now absolutely on board.”
Part of the doubts would no doubt have been due to the bad reputation of some parts of the private equity world, at least, as just wanting to fatten up an investment for sale, meaning they would not care about solicitors’ ethics and so on.
Ms Beckingham said: “We are growth investors and the reason for partnering with businesses is to take them on that growth journey. And growth comes by delivering the highest quality of service to clients by rewarding staff and giving them the opportunities to develop, to grow, to take on new career paths, to be incentivised as a part of that.
“We’ve got a reputation as well to maintain and there will be future investments in other professional services businesses for us. So it’s very much about delivering growth and creating the best business that we can together with management and not about anything else that private equity may have a historically negative reputation for.”
Indeed, August is clearly not an investor that rushes. Legal Futures first reported its interest [3] in the legal sector in 2012, six years before Ms Beckingham started worked there. While legal services has been on the agenda for all that time, the fact it has taken until 2025 to find the right investment “is really a testament to how we work as a firm”.
She continued: “It shows that we really stick to areas that we like and we’ll spend a long time making sure that we are absolutely comfortable and certain on investing in a space before we do so.”
In that time, August has spoken to other law firms and while they were good – and indeed some could end up being acquisition targets for Higgs – they were “not as set up for a private equity journey as Higgs is”, such as its governance and corporate structure.
Ms Beckingham said: “They’ve invested really heavily in terms of leaders within the business that are non-client facing and are there to drive the growth of the business. That is actually a very big differentiator versus a lot of firms…
“What stood out to us as well is the fact that the business is really delivering a really high-quality, really wide breadth of services to clients and the client feedback and reputation in the market is genuinely second to none in the space.”
As to where Higgs will be in five years’ time, Mr Taylor replied: “Hopefully we’ll be a lot bigger, a lot stronger, a lot more financially stable and profitable.
“We’ll still be offering absolutely excellent service to our owner-managed business client base that has expanded more nationally and out of more regional hubs.”