Back in 2014, not many – if any – would have predicted Addleshaw Goddard would boast one of the highest percentage growth rates in profit per equity partner (PEP) across the Legal Business 100 over the next five years. But with PEP increasing 13% to £730,000 in the 2018/19 financial year, PEP has risen an impressive 87% over that time.
Top-line growth between 2014 and 2019 is similarly impressive, up 61% to £275.4m, topped by a 14% increase year-on-year. In the five years leading up to 2013/14, turnover for Addleshaws had dipped 1% as the global financial crisis weighed heavily. PEP also fell 11% in 2013/14 due to exceptional expenses including partner restructuring and a written off conditional fee agreement – hence the low starting base for the dramatic growth in partner profits over the last five years.
Headcount has also grown – partner numbers are up more than 42% to 243, with the firm’s 111 equity partners the highest numbers it has ever had – while lawyer numbers have lifted by the same percentage to 960. It has mostly been organic growth, too, despite the firm’s best efforts to find merger partners in Germany and the US. Of course in 2017 the firm finally produced a tie-up, courtesy of HBJ Gateley in Scotland, adding £20m to the top line. It has just opened its first continental European office in Hamburg, following openings in Singapore, Dubai, Oman, Qatar and Hong Kong since 2012.
The firm’s cash position has also seen a £90m improvement over the last five years to boast £59m of reserves. The period of substantial financial improvement has been led by John Joyce, who was appointed managing partner in 2014 and in 2017 was re-elected to a second term.
‘We’re not going to sit back,’ Joyce says. ‘Success breeds success. Every time you put a decent set of numbers out, someone will see that as a massively positive thing. They’ll say, “I didn’t know they were doing that well.” The quality of the people that we’re seeing has improved massively over the last two years.’
Where are there still holes to fill?
John Joyce: We want to do more in all of our offices. The City’s a key priority for us and London’s grown massively, but we want to raise the profile of the firm. Scotland is also a priority and has been awesome for us, there is a lot of growth we can achieve there. We’re not going to walk away from the regions, ever: there’s still scope to grow. I’d be surprised if we don’t have at least one further office in the not-too-distant future.
What have you built up the cash position for? It gives you some potential firepower…
Joyce: We get people asking us, ‘What are you going to do with all that cash?’ and the answer’s ‘keep it’. We’ll do nothing with it, absolutely nothing.
What next, then? How do you capitalise on this growth?
Joyce: We’ll press on. We’ve achieved more than we could ever have imagined over the last five years, we would never have dreamed we could achieve what we’ve done by the end of this year. In a sense that gives you an appetite to go on and do more. One of the big messages to the partners this year has been don’t think that we’ll ease back on the pressure now, because we won’t.