England's oldest town's biggest law firms are future-proofing in different ways

The Essex city of Colchester has a few notable features, from being the first capital of Roman Britain to the home of Boudicca and Blur. Older readers might remember that Colchester United shocked Don Revie’s then mighty Leeds United in the FA Cup.

But in terms of the legal profession, Colchester is typical of provincial England. Mid-sized firms, well known in the local community, once plugged away making decent returns for partners, but now face existential choices in the face of rising costs.

Three of Colchester’s biggest firms have taken different paths in terms of identity, ownership and external funding.

Birkett Long’s name goes back more than 200 years, but it will soon disappear. The firm is being swallowed by the acquisitive listed outfit Knights, which bought the business for £16.6m this month.

Birkett Long had been stable, but finances were stretched: net assets nearly halved last year and operating profit fell despite turnover increasing. Knights did not arrive in shining armour, but did offer financial muscle and a lucrative exit option for partners. Knights chief executive David Beech said: ‘We are confident that without the constraints of independent ownership and building on its growth in recent years, the acquisition will deliver further organic growth in the region.’

The announcement prompted negative headlines when Knights put support staff on notice of redundancy, as it has done at most acquired practices. The carefully cultivated image of a local community practice is difficult to maintain when dozens of hard-working staff are cast aside by a cost-saving public company.

‘We assess all areas of a business during an acquisition and work collaboratively with their partners to identify, and ensure we retain, all roles that will complement our team,’ said a spokesperson. ‘Birkett Long is no different, and there will be people we do not retain.’

Fisher Jones Greenwood, which opened in Colchester in 1983, took external funding three years ago when it was acquired by the Lawfront group, backed by private equity firm Blixt. The deal allowed Fisher Jones Greenwood to retain its identity, but its future is bound by the exit plans of its private equity owners.

'We’ve chosen a path that avoids disruption. Clients know who they’re working with and why. We’ve expanded steadily across the region, while keeping our identity and values intact'

Guy Longhurst, Ellisons

Neil Lloyd, chief executive of Lawfront, believes it is a more attractive prospect than a consolidator firm like Knights. ‘Lawfront invests in the local brand, its people and backs the firms’ management teams to achieve their own growth ambitions within their region, whereas Knights quickly consolidates the acquired firm into the Knights brand,’ said Lloyd. Fisher Jones Greenwood, like all Lawfront regional firms, has preserved its brand and maintained its ‘local’ reputation while growing by over 30% since acquisition.

One Colchester firm that remains independent is Ellisons – so central to the city that it stands opposite the (now closed) Debenhams and sponsored the local panto last year.

After a period of relative prosperity, last year was more challenging, with operating profit falling from £4.1m to £2.5m. But the approach has not changed. Managing partner Guy Longhurst said that being partner-owned offers the freedom to make decisions quickly and retain the firm’s integrity.

‘After more than 260 years in the law, we’ve seen every kind of market and societal shift, and we’ve learned that success comes from adapting on your own terms,’ said Longhurst. ‘Our dedication to long-term success, rather than short-term profits for shareholders/investors, means we continue to build a sustainable business for future generations of partners and our clients.

‘We’ve chosen a path that avoids disruption. Clients know who they’re working with and why. We’ve expanded steadily across the region, while keeping our identity and values intact. Too often, firms lose their soul and forget about the clients that helped build a successful business in their quest for continued growth.’

Jeff Zindani, a merger consultant and owner of Acquira Professional Services, said the discussions at firms in Colchester are being echoed across the country.

‘Many firms find themselves at a critical inflection point – where decisive action could lead to transformation and growth – or locked in a standoff, where inaction and caution leave firms paralysed, waiting for others to move first,’ Zindani told the Gazette. ‘There will be some firms where the partners are seeking retirement and looking for a payout. That is a choice, but it will mean relinquishing control and risking losing the goodwill that has built up in the brand. But then those firms turning down PE investment have the major issue of coming up with a succession plan.’

Colchester’s most famous band once sang ‘There’s No Other Way’. In terms of legal strategy, they were wrong – the trouble is picking which road to choose.