Cottage industry

In a regional profile, Philip Hoult explores the diversity of ideas and legal markets in East Anglia, from the educational clout of Cambridge to Norwich’s regional pride

The east of England region’s stated aim – believe it or not – is to become known as ‘Europe’s capital of ideas’.


At least that is the grand plan of the East of England Development Agency (EEDA), whose remit covers the six counties of Cambridgeshire, Norfolk, Suffolk, Bedfordshire, Hertfordshire and Essex.


To justify its bold claim, the EEDA points to the presence of world-class research departments and institutes, and the highest per capita spend on business research and development of any UK region.


Whether the label will catch on remains to be seen. But when it comes to the legal profession, the region’s leading firms are certainly doing their bit by having remarkably divergent ideas on the best strategy to adopt.


Eversheds may be the only national firm to have a presence in the east of England, but it has offices in three of its key business centres – Cambridge, Norwich and Ipswich. Some firms – such as Cambridge-based Taylor Vinters and Peterborough’s Greenwoods – have opted for a single-site strategy.


Others have multiple offices, but they can be further distinguished between those that have chosen to stay within the region and those that have spread out beyond its boundaries. The largest firm in the region, 80-partner Mills & Reeve, has offices in Birmingham and London to complement its presence in Cambridge and Norwich. Birketts is based in Ipswich and Norwich, while Hewitsons’ main operations are in Cambridge and Northampton.


And then there is Kester Cunningham John – the product of the May 2004 merger of Few & Kester and Cunningham John – which has five offices straddling the region.


So why is there no common approach? The different strategies are partly a reflection of the east of England’s diversity – there are substantial differences in the local economies around Cambridge, Norwich, Ipswich and Peterborough.


‘The east of England is not the same as anywhere else,’ Eversheds partner Ian Shann acknowledges. ‘There is no major regional capital – Norwich may have aspired to it in the past and Cambridge may do so now but neither are right. The region is disparate and large. Each centre has a different focus and the large firms all have their different backgrounds.’


One of the main reasons why the EEDA is attempting to brand the region the ideas capital of Europe, is Cambridge, thanks to the historic academic strength and international reputation of its university. The ‘Cambridge phenomenon’ has persuaded the likes of Microsoft, Kodak and Genzyme to establish research laboratories in the area, which sit alongside major local successes such as Bluetooth and Cambridge Silicon Radio.


But this source of potential work has not always made for an easy ride, according to Hewitsons managing partner John Dix.


‘What has happened in the Cambridge sub-region is that there has been quite a shake-out since the peak of the last [technology] boom,’ he says. ‘A lot of the froth has gone. But the levels of activity are very healthy.’


Simon Walker, head of the three-partner Cambridge office of City firm Taylor Wessing, agrees that there is renewed confidence. Having taken over the old Garretts office in January 2002 and weathered a subsequent downturn, he says: ‘We are now getting Alternative Investment Market work and mergers and acquisitions, and we continue to get venture capital and intellectual property instructions.’


Another significant element of the Cambridge legal market is the educational sector. The brand of the university and its colleges has allowed the likes of Mills & Reeve to develop a national reputation for this line of work, which can encompass real estate, commercial, litigation and governance advice.


‘The colleges are under more financial pressure than they were,’ says Mark Jeffries, Mills & Reeve’s managing partner. ‘The issue is how we can help these clients either save money or generate more income… But we can trade on the back of Cambridge’s reputation.’


Although the technological and educational sectors are what give Cambridge its renown, the majority of law firms in the city nevertheless plan to continue providing a full-service offering while developing other sector strengths.


The approach of 51-partner, £16.8 million-turnover Hewitsons is typical. ‘What we have done is analysed our existing client base to understand it better,’ explains Mr Dix.


This analytical exercise pointed to three areas of opportunity for cross-departmental teams to exploit alongside the firm’s traditional practice lines. The first is regionally contained activity generated by an increase in residential housebuilding, the expansion of Stansted airport, and the development of the M11 corridor. The second is advising charities nationally – clients of the firm already include the Royal Society for the Protection of Birds. The third area is public sector work for local authorities and governmental bodies (an area that is a mainstay of many east of England firms).


There is a flipside to Cambridge’s prominence, however. Many argue that there are now simply too many lawyers for the amount of work that is available to go round.


Taylor Vinters managing partner Christine Berry – whose 30-partner, 200-staff firm’s turnover has risen to £13 million since she was appointed to the role seven years ago – nevertheless argues that this is a positive development. ‘It is an over-fished pond but competition is healthy,’ she insists. ‘It makes us think about our business model.’


In contrast to Cambridge, Norwich has an older-style economy with particular strength in financial services, property, retail and agribusiness. Major employers include Aviva (parent company of Norwich Union), the city council, media business Archant, and the University of East Anglia. ‘Our Norwich office has a much more traditional business of advising companies that have been there for many years,’ suggests Mills & Reeve’s Mr Jeffries.


The economy has nevertheless been sufficiently robust to allow local firms to grow – Steeles, for example, has seen its turnover rise by 25% over the last couple of years to £11 million. ‘That has been based on our strategy of going for the mid-sized corporate, owner-managed sector alongside our traditional strength of public sector work, which contributes around a third of the firm’s turnover,’ explains managing partner Philip Hyde.


The firm has also focused on particular industries such as the food business and, somewhat unusually, the motor industry, where clients include east midlands-based Jaguar Racing.


‘Where we are based should not be any impediment to getting more work in sectors where we have an interest and expertise in,’ Mr Hyde says.


He adds that the 21-partner firm has benefited considerably from being in the unusual position – for most east of England firms at least – of having a sizeable office in London. Opened in 1997, the office now has 70 members of staff and acts for 13 boroughs in the capital.


‘If you are based in Norwich and are trying to pitch for work in, say, Manchester, they will ask why they should come to you,’ Mr Hyde says. ‘No one asks that question if you are in London as well, even if most or all of the work is actually done in Norwich.’


Ipswich-headquartered Birketts, which opened in Norwich in May 2004 with a team of lawyers from Eversheds, has also enjoyed a strong growth phase in the city. Chief executive Alistair Lang, who is not a lawyer, acknowledges that the launch had an element of opportunism about it, but adds that, having started out with just six people, it now has 44 in the Norfolk capital.


A lot of that expansion has come from commercial property work, but the firm has also developed its litigation and private client offerings in particular, and Mr Lang says there is scope for further growth. ‘The constraint we have is property, finding the premises for the number of people we want to take on,’ he says.


Birketts, which has 28 partners and a turnover of £12 million, is also looking for new premises in its historic base of Ipswich, which – like Norwich – has a more traditional economic model than Cambridge.


Hopes that a combination of the presence of the BT research site at Martlesham, the influence of the Cambridge technology cluster and the creation of a technology community – called IP City – might spark new economy growth have proved somewhat misplaced.


‘The old BT bright star has faded in terms of the number of spin-outs,’ Mr Lang explains. ‘The IP City [project] still exists but it is not as high profile as it used to be. Our corporate and commercial work tends to be old economy… The area along the A12 has also been relatively buoyant.’


Birketts’ local rival Prettys – which is celebrating its centenary – has also changed significantly over the last decade. ‘We have always traditionally had a strong insurance practice… and we are still doing panel work,’ says managing partner Roland Sharp. ‘But we also now focus much more on large organisations which are effectively self-insured, and on Lloyd’s and other markets.’


Mr Sharp says 16-partner Prettys has been driven in recent years by a strategy to grow its commercial team substantially, to the extent that it now accounts for between 40-45% of turnover. Clients include the likes of call-handling business Call Connection, healthcare provider Care UK, and racehorse training business Godolphin, as well as major lenders.


The firm – like others in Ipswich, such as Barker Gotelee and Gotelee & Goldsmith – has benefited significantly from the economic influence of the ports of Felixstowe and Harwich, where the shipping industry spins out to provide warehousing and distribution clients. ‘Transport and shipping has been very strong for a couple of years now with a real strain on capacity,’ explains Mr Sharp.


At diametrically the other end of the region to Ipswich is Peterborough, and it is a fair guess that if people were asked to name the key business centres of the east of England, they would leave it out.


This would be a mistake, according to Shelagh Smith, managing partner of Greenwoods – the largest firm in the city with 11 partners and 75 employees. ‘We consider ourselves to be part of both the east of England and the east midlands,’ she says.


The Peterborough area has a greater population and a larger economy than Cambridge down the A14, Ms Smith insists, but nothing like the brand. The city is home to Emap, and as the media giant has grown over the years, so have the opportunities to advise industry-related businesses.


She also points to the food industry as a fertile source of clients, principally those ‘between the farm gate and the supermarket’, including major logistics businesses. ‘There has been a lot of consolidation in that market and there is more to come,’ she says, adding that Greenwoods has developed a business defence team to advise clients on maintaining their reputation in such a high-profile sector.


As Peterborough is launching a new master plan with backing from the Office of the Deputy Prime Minister, development opportunities are also likely to be significant in the coming years. However, Ms Smith claims that the market would be a ‘tough nut to crack’ for outside firms because of the strength of local relationships.


While the majority of firms have stuck to the main business centres in the east of England, 25-partner Kester Cunningham John has – following its 2004 merger and the contemporaneous opening of an office in Norwich – built a different type of practice, with five offices across the region. ‘Having a mid-Anglia base is a distinguishing feature for us,’ says managing partner Tom Cook. ‘A physical commitment to the region is very important.’


The 2004 merger, he adds, has already had an impact on both the type of client and the work it is able to attract – the firm’s volume of deals has also grown by 20%, while their value has doubled. The link has made the firm more visible to potential candidates looking to relocate from the City and elsewhere.


One thing the leading firms in the east of England do have in common – in contrast to the biggest players in other regions and with the notable exception of Eversheds – is the continued importance that they attach to handling private client work.


This is in part because of the lack of sufficient heavyweight plcs to support a strategy based purely around targeting their corporate and commercial work. It is also explained by the fact that, although it is a relatively under-populated region with just 5.5 million residents, the east of England is the third most prosperous part of the country after London and the south-east.


There is, on the one hand, a mix of old money – typically based around agriculture and landed estates – and, on the other, new money enjoyed by entrepreneurs, particularly around Cambridge and commuters who work in London. This confidence in the worth of private client work was amply demonstrated by Mills & Reeve’s landing of a 15-strong team from Birmingham firm Wragge & Co in March 2005.


But will one strategy ultimately prove more successful than others? The east of England’s diversity – and its continued solid economic performance – would suggest that there continues to be plenty of scope for firms to maintain their distinctive strategies. As Eversheds’ Mr Shann suggests, ‘there is a place for [different types of firms] as long as they stick to it’.


There has been much speculation in the market place, it has to be said, about Eversheds’ own commitment to the region – the fact that no other national firm has a presence inevitably raises questions about how the region fits into the whole entity.


This ‘disinformation’ is something that Mr Shann is eager to dispel. He points to the fact that it has 178 fee-earners and 339 staff across its trio of offices, and that it is investing £750,000 in its premises in Norwich. He also emphasises that each office has an important role to play within the firm’s overall strategy of national centres of excellence. These include: Norwich for real estate, planning and employment; Cambridge for technology; and Ipswich for defendant insurance litigation and construction.


One reason why firms in the east of England – whatever their strategy – can be optimistic about the future is that, with the exception of Cambridge, they arguably enjoy an element of protection. The cost of entry and the relatively small size of the market are likely to dissuade City firms and leading players from other parts of the UK from making a big push into the region.


For that reason, Taylor Wessing is likely to remain a one-off. ‘[City firms] see that with their cost structures the market is not really worth their while,’ argues Hewitsons’ Mr Dix.


Therefore, the region’s firms have an opportunity to use their lower cost bases to attract clients from outside and to push up the value chain when it comes to the types of deals and other work they handle.


‘The links to London are a plus,’ Birketts’ Mr Lang insists. ‘Large regional clients such as brewer Greene King will never use us for their Stock Exchange circulars, but we will be working away behind the scenes. We also derive a lot of work out of London.’


And the closeness of the capital – Cambridge, Ipswich and Peterborough are all, more or less, an hour’s train journey away – means that firms can also attract highly-qualified lawyers looking for a better quality of life but with decent work.


As Prettys’ Mr Sharp says: ‘I live next to the River Orwell. I can jump in my car and be at my desk in Ipswich in 12 minutes – if I hit a bit of a traffic jam, it might take 18 minutes.’