The rise of the non-lawyer

Watson Burton may boast a 200-year history in the UK’s North East, but the appointment of professional non-lawyers has made the past ten years a decade of unprecedented growth for the firm.

By Patrick Harwood

It may be helpful to gain a perspective on Watson Burton’s current achievements by reflecting briefly on the firm’s journey through recent history.

I suppose that we at Watson Burton consider recent history to be the past ten or so years. For many firms this length of time will represent a significant part of the whole life of the business as people remember it. For Watson Burton this is just a small, if rich, slice of a 200-year epic.

Brief history
The original firm founded two centuries ago established a strong tradition of serving the business and professional community of the North East of England with an emphasis on quality and innovation.

Over the past century, the firm forged close relationships with those engaged in the primary industries that made up much of the region’s economy. Latterly this led to a sizable involvement in industrial disease litigation work and, in particular, acting for claimants through the various coal health schemes.

Aside from the short-term growth in the scale of the firm’s operations associated with this ‘bulk’ business, little else changed within the firm in terms of remaining a full-service law firm offering the usual core commercial disciplines.

For many years this formula supported a successful business but, as the regional legal marketplace started to become more focused and competitive during the early 1990s, Watson Burton’s personality started to translate as rather understated and some might forgivably say modest.

During the early 1990s the firm streamlined its operation, closing a number of ‘branch offices’ located in the towns and suburbs of the North East and concentrated its efforts to deliver a more focused commercial service centrally in Newcastle upon Tyne.

In common with a number of regionally based competitors, Watson Burton started to create a focus for its future development and growth. As part of finding this focus, the firm also identified a gap in the management skills that existed within the business and started to look closely at how this could be filled.

A professional approach to management
Throughout the firm’s long history, management roles have generally been carried out by principals of the business, very much along the lines of a traditional law firm model – that is, identifying the partner who could do least harm in a specific management area and letting them have responsibility for caretaking it, in turn reporting into a generally benign committee process.

To their credit, the partners at Watson Burton identified at an early stage during their re-focusing as a modern commercial business that this approach, while comfortable, would not drive the business or its practitioners in rising to the challenges that lay ahead.

In 1997 the firm appointed its first senior non-lawyer manager as head of finance and administration. An enthusiastic young accountant with experience in the management of law firms and a particular interest in managing business re-engineering projects became their appointee.

By recruiting to compliment the skill set of the incumbent management team, the business was able to maintain a level of traditional control while taking a critical first step towards having a functional management structure.

Having up-skilled the team, the management process was now able to focus on the longer term goals of the business, without regularly becoming bogged down in day-to-day implementation issues. This liberation of the partners involved in management soon led to a new approach within management, focusing increasingly on strategic rather than operational issues.

Arguably, the introduction of the broad skill set of a professional manager at Watson Burton was the turning point for the management team in terms of differentiating between strategically important management decisions and operational day-to-day management tasks, the latter now being dealt with through operational management processes.

Positioning the role of the professional manager
Building a platform from which to have genuine influence within the management process and creating confidence in the new structure has been crucial to the success of professional management at Watson Burton.

The engagement of staff at all levels within the finance, IT, administration and general support functions underpinned a new and energetic approach to supporting the firm’s growth and development ambitions. A demonstration of both leadership of, and belief in the ability of, these key assets of the business led to instant returns on investment.

Like many firms, Watson Burton already employed a formidable pool of talent within its non-practicing personnel. The ethos of the new management structure was to empower and direct this resource and not to over complicate the structure with unnecessarily formal processes of control.

Having demonstrated the value that could be leveraged by channelling existing resources within the support functions, a precedent now existed for employing a similar approach within the firm’s practising community.

Practical support of the leaders of the firm’s business units soon created a new level of commercial awareness throughout the firm and a tangible commitment from all to achieve new heights of performance.

A thorough but imaginative approach to financial planning and the management of performance against clear goals have been the basic tools that have galvanised Watson Burton into the progressive firm that it is today. Making sure that these concepts are firmly embedded and consistently ‘lived’ by practitioners at the coal face has formed a substantial part of the operational management agenda.

This approach has in turn given great confidence to the management team in tackling the firm’s challenges at a strategic level.

Understanding that a relatively standard business model can be applied to a law firm has been a revelation to partners and managers alike at Watson Burton. Notwithstanding this, the alignment of priorities that has flowed from this understanding is a major part of the firm’s achievement.

Our strategic milestones
In the past ten years, Watson Burton has changed significantly, not least as a result of tackling a wide range of strategic projects in quick succession.

All the projects that the firm has undertaken in the past ten years have been carefully scoped, costed, managed and evaluated – simple stuff in essence but fundamental to prudent financial control. By creating a clear vision at the start of every project of how success would be measured and understanding the value or impact of this on the business, basic commercial sense rules all the decisions that follow.

Some of the larger projects have been:

The development of business management and information systems driven by reliable and flexible IT resources and high-quality practice-management systems. These have played a key role in business improvement, providing a platform that has underpinned the firm’s growth and development at every stage;
Re-branding the firm as a unique proposition within the North East legal market, which played a major part in securing new clients and opening up new markets for the firm in the months that followed the re-launch. Within a year, turnover had almost doubled across the core commercial disciplines;
Moving from run down and inadequate premises to a state-of-the-art, purpose-built office complex in Newcastle, which demonstrated a fundamental commitment within the firm to a long-term vision. This in turn reflected outwards as an unquestionable confidence in the business’s basic proposition of a long-term commitment to quality and client care;
Opening an office in Leeds, one of the most competitive legal markets in the UK, and seeing this project move into profit within two years. This demonstrated that Watson Burton’s product could travel, and that scope for an alternative approach existed even in highly developed markets;
Following the Leeds office project with the London opening, only 18 months later, which demonstrated yet further confidence and capacity within the firm to tackle monumental challenges and create success.

The infrastructure of the business is now capable of supporting substantial growth across all three locations and the firm has positioned itself to take advantage of market opportunities arising out of any one or all.

A clear example of the substance of this approach has been the recent merger with Trevor Robinson & Co., a transaction that we could not have seriously considered without a London Base.

Merger with Trevor Robinson & Co
As the most recent in a long line of strategically important projects to be delivered, the merger between Watson Burton and internationally renowned commercial and technology practice Trevor Robinson & Co drew heavily on the experiences and successes of other projects from recent years.

The timing of this opportunity was perfectly matched to a requirement within Watson Burton to consider initiatives that would deliver sustainable growth across the whole firm and particularly lead to an enhanced presence in the London market.

The firm’s guiding principle in opening offices outside Newcastle upon Tyne has been to offer services that are aimed at a clear client demand. Operating a partner-led approach to service, focused on understanding and supporting the client’s needs, the firm’s rationale for growth across new geographical markets requires a consciousness of and commitment to this philosophy.

Having only opened the London office in the summer of 2006, planning for growth in this location was much more a question of what else Watson Burton could offer to the London marketplace rather than how we could increase the scale of the operation.

The initial offerings of construction, professional indemnity, pensions and property all enjoyed success in terms of growth in client instructions during the first year of operations and a similar level of success would be targeted for any further offerings developed from this location.

The opportunity to begin a conversation between the firms arose from an introduction made between Trevor Robinson & Co’s accountants and trusted advisor RMT. Anthony Josephs, partner at RMT and long-term friend of Trevor Robinson approached Watson Burton as a possible merger partner, having followed with interest the firm’s growth and development over recent years. Recognising the progressive nature of Watson Burton, he felt that a good match might exist between the two businesses.

Right from the first meeting, both firms approached the project in an open and honest way, quickly finding a common understanding of where respective priorities existed in progressing further conversations.

Having identified loosely what either party would contribute to a successfully merged business, a detailed financial model was the next task. Dealing with the financial expectations of both parties and understanding risks at this level of detail at this early stage of the merger discussion allowed the project’s overall focus to be set on the positive and desirable aspects of combining the two businesses.

Fortunately, having operated their firm as a highly efficient business for many years, the partners at Trevor Robinson & Co took little convincing of the merits of the pragmatic management style of Watson Burton. This characteristic has also greatly accelerated the assimilation of the new technology business unit into the merged firm.

It is fair to observe that merging a business of the scale that Trevor Robinson & Co represented with Watson Burton would not, at a technical level, be that complex but to assume that this would make the transaction simple by default would be a mistake.

The intangible and personality aspects of this project were always going to be the real test of the firm’s respective ability to complete a merger. Managing the relationships of the individuals involved and dealing respectfully but pragmatically with the detail of merging a business with only two principals with a close working relationship and a trading history of nearly thirty years with a much larger entity became the task at hand.

Ironically to some maybe, this is the aspect of the entire transaction where Watson Burton most clearly demonstrated its difference in the marketplace to other propositions that had been considered by its potential merger partner. The involvement of the CEO at the very first discussion about this project had resulted in the prompt, accurate and sensitive production of a financial model for the project. This level of empowerment of the professional team at Watson Burton had in turn framed up a very clear picture of effective and appropriate business management that could be expected as part of life in the merged firm.

This clarity proved fundamental in addressing many of the fears that existed with the partners at Trevor Robinson & Co about the nature of the organisation they would be joining and its ability to run an efficient business along the lines that they had been used to. Experiencing for themselves the level at which professional managers are empowered at Watson Burton made a very positive impression on the Trevor Robinson & Co partners.

Trevor Robinson & Co. had received interest from a number of national and international law firms to acquire their business but their ultimate choice was to join a firm that could demonstrate a cultural integrity and commitment to core values of client care while operating as an efficient and effective business, a model close to their own firm’s practicing standards.

It has been a genuine pleasure for all those involved to have worked on this project, which we believe may well have set a precedent for future mergers. Imagine a scenario where all the parties involved in a merger discussion wholeheartedly wish for the transaction to go ahead without any material fear of the new world this will create.

It is still less than one month since the merger took place but already the merged firm is seeing substantial support from major clients in the form of continuing instructions and invitations to broaden these relationships in the future, recognising the much wider service offering of the merged firm.

Where do we go now?
Throughout its experience of rapid growth and expansion over the past ten years, Watson Burton has embraced the opportunity of having experienced and committed professional managers at the heart of the strategic-decision making process, informing the strategic conversation and taking responsibility for efficient implementation.

Having this level of resource available to scope, plan, implement and then manage the outcomes of strategic projects has helped to define Watson Burton as a genuinely progressive business.

The atmosphere within the firm is one of ‘can do’ and the examples of people developing their careers within the business are numerous, lawyers and non lawyers alike.

The commitment to develop a professional-management team that started eleven years ago with the key recruitment of a non-lawyer general manager, has led to a structure that today incorporates a CEO, COO, commercial director, finance director, HR director, compliance director and business development director.

Over the past twelve months, the firm has been conducting a review of its equity, income allocation and control structures with a view to implementing changes that will continue a strong history of sustainable growth for future generations.

The implementation of this project will see Watson Burton lead the legal industry in terms of revolutionising law-firm structures in anticipation of post-Clementi opportunities. ?

Patrick Harwood is CEO at Watson Burton LLP. He can be contacted at patrick.harwood@watsonburton.com