Second time lucky? Plexus Law secures £15m PE investment

Scott: Investment will accelerate our organic growth

Defendant law firm Plexus Law has secured a £15m investment from a private equity company that specialises in the services sector.

Origin Equity has taken a minority shareholding in the firm and its partners Gavin Loughrey and Olivia Roberts will join the Plexus board.

Plexus has obtained an alternative business structure from the Solicitors Regulation Authority to enable the investment. Origin’s model is to invest £5m-20m in the services sector in the UK and Ireland.

It is Plexus’s second go at private equity, having been a large part of the Parabis Group – the first law firm to be bought by a private equity business – before it was broken up in a pre-pack sale in November 2015. Plexus returned to the ownership of its founders.

The firm is headquartered in Leeds and has offices in London, Manchester, Edinburgh and Evesham, with over 1,000 employees, including 119 partners and 655 fee-earners. It is also opening offices in Chelmsford and Taunton.

It generated a £6m profit after payments to partners on £56m of revenues, with net operating assets of £29m for year ending 31 March 2018.

Plexus said that, since returning to independent ownership, is has “enjoyed sustained organic growth off the back of increased demand, particularly from London market and reinsurer clients, for claims handling and litigation expertise in areas such as financial lines, professional indemnity and liability work”.

Chief executive Fiona Scott said: “We operate in a highly competitive market and in order to thrive, we need to grow. Origin’s investment will accelerate our organic growth across the UK and Ireland, support our efforts to secure talent through lateral hires and enable us to further explore how we utilise and invest in technology.

“We are in a really strong position to take on this investment. Plexus is cash rich, overdraft free and has an impressive client roster.

“The decision to opt for private equity investment rather than looking at a merger, IPO or becoming highly leveraged with debt, was influenced by a number of factors, notably that this approach doesn’t compromise management control.

“In addition, the fact that it is a cash equity purchase ensures that it does not expose the business and its partners to the risk that a highly leveraged, debt funded buy in or IPO might – particularly in the current economic and political climate.

“It’s also important for us to ensure that we don’t preclude future talent from taking a stake in the business.”

Origin said it approached Plexus, having tracked the business, the market and its competitors for some time, and in doing so, identified a major opportunity to invest in and support the firm’s growth and accelerate its existing strategy.

A spokeswoman said: “We believe we can help the firm’s senior management team consolidate Plexus’ position as the go-to independent defendant law firm.

“We can also help the team further exploit advances around data management, analytics and next generation case management processing, three areas in which they have already made great strides.

“Central to our approach is the idea of working closely with ambitious managers and with Plexus we see a huge opportunity for the firm to continue to evolve and innovate.

“In the current market, where transparency and client ROI is so important for professional services providers, Plexus has developed a reputation for taking an innovative approach to pricing and claims management.”

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