I wrote recently of the need, when commenting on the firms and individual lawyers we cover, to give the benefit of the doubt, and I meant it, but sometimes it’s hard to find that silver lining or constructive slant. Addleshaw Goddard, unfortunately, has become a case in point.
Recent years have seen materially below-trend financial performance, indications of tension between its City arm and northern offices and an international strategy that looked just too little, too late. Perhaps more damaging has been the uncertain tone that has emanated from Addleshaws about where it sits in the market and wants to go.
The previous long-running management pair of Mark Jones and Paul Lee was not perfect. Indeed, some of the decisions taken during the boom years caused a good deal of the legacy problems the current leadership team have been wrestling with, notably an oversized real estate practice and an expensive City office. But they had the virtue of a complementary mix of styles and a willingness to robustly and unitarily run the firm when necessary.
As such, it has not always been apparent that the democratic instincts of senior partner Monica Burch and managing partner Paul Devitt are what the firm needs.
Remember, this is a firm that had professed to have had its long, hard look in the mirror three years ago, having been chastened by falling revenues and one of the lowest profit figures in the UK top 50. There has been no evidence of revival since, with Addleshaws’ top line still £30m below its 2007/08 high.
Recent news that the firm has had to write off substantial fees on litigation uplifts – recalling a £6m shortfall that occurred in its 2010/11 year due to conditional fee agreements undershooting expectations – and miscalculated profit points only heightens the sense that something is not right.
It’s been apparent for a while that Addleshaws – despite a formidable plc client base and having secured probably the best national/City merger in 2003 with Theodore Goddard is suffering more than its peers with commoditisation and fee pressure.
On one hand its efforts to respond creatively to a changing market with its low-cost Manchester centre are commendable. But rather than forging a strong brand to resonate with clients, much of the New Law pizazz has been lost amid talk of process mapping. And even if such a venture had been pulled off with Axiom-style panache, it hardly answers concerns that Addleshaws needs to be pushing higher into premium work, while managing costs at the commodity end.
The argument put forward before the breakaway of the litigation boutique Enyo Law that the firm should differentiate itself with a sustained push into high-end disputes in retrospect looks to have been a stronger notion than the generalist stance it has trudged on with.
In the end, the time for half measures has now surely long passed. There are a handful of strategies Addleshaws can credibly pursue – some involving substantive mergers but all demanding a clearer view about the firm’s London and international ambitions. Which path is for the firm to decide, not pontificating pundits. What is crucial is that Addleshaws – with a change in management looming – fixes on a clear plan of action and then unambiguously executes it. Sometimes in business you need to be your own harshest critic.