Speculation about who’s merging with who has never been higher, but one firm that legal market watchers can cross off their merger list, at least for the next four years, is Addleshaw Goddard.
Andrew Johnston, who took up the firm’s managing partner role in May 2024, tells Legal Business that whatever peers such as Ashurst, Taylor Wessing and Hogan Lovells are doing, Addleshaws has no intention of adding the US to its already ambitious 2030 strategy.
‘Building out a relatively unique, high-quality and well-delivered UK, European and Middle Eastern platform is the priority, rather than looking further afield at a US deal. I’m quite comfortable with others making the choices they are but we’re ploughing our own furrow and that’s the right thing for this business. [The US] isn’t what our partners want and I don’t think it’s what our clients want right now so I’m certainly not second-guessing our strategy because of some activity in the market,’ he insists.
That’s not to say a US deal won’t be part of the longer term plan, of course, as Johnston is clear the firm has to have a strategy for the world’s biggest legal market but, if a tie-up is ultimately on the cards, it won’t be happening anytime soon.
‘I’ve been very clear that a US merger isn’t on my immediate agenda but it’s a big market and a market that we have to have a clear strategy for. Who knows what choices we’ll decide are the right ones for this business after 2030,’ he stresses.
When Johnston took over, Addleshaws was already in a strong position after a decade of tight leadership under John Joyce. While Joyce took up the management mantle when the firm had a cash deficit, by the 2024 financial year-end Addleshaws had cash reserves of £139m and an international expansion plan that was already well underway.
‘I didn’t come into the role feeling like the nuts and bolts needed to be changed,’ says Johnston. ‘What I felt was needed was an injection of confidence and ambition into the business and some clarity to our purpose.’
And he has set out to provide partners with this confidence and ambition. At his first partner conference, Johnston announced that Addleshaws was targeting revenue of £1bn by 2030, a number that effectively meant doubling in size.
He admits there may have been some sharp intakes of breath but points out: ‘We’ve been running at double digit growth for five or six years, so it effectively breaks down into 11% annualised growth and [an additional] £100m.’
Johnston is talking with Legal Business in one of the meeting rooms at the firm’s new London office. Located at 41 Lothbury opposite the Bank of England, he says the building is a nod to the firm’s ambition and intent with the AG2030 strategy. The entrance to the Grade II listed building, with its cavernous former banking hall, marbled floor and towering columns, certainly conveys ambition. Like the AG2030 strategy, the building is about eliminating any potential sense of drift in the business. Scale and ambition are part of its strategy.
So far the focus has been on building out existing offices, as well as a handful of launches across EMEA, with the firm launching a Madrid office in 2024 and acquiring Linklaters’ Warsaw office and opening in Abu Dhabi in 2025.
‘We remain open minded that there will be further international expansion; there’s no question about that,’ Johnston says, adding that the firm has made clear its desire to open in the Netherlands. Beyond that he says: ‘We’ll be consolidating the offices we’re currently in … I’m focused on quality not quantity. We need people that can help us move the business forward in a meaningful way.’
He points to this commitment to consistent quality across geographies, clients and practices as a differentiator for Addleshaws. ‘It’s delivering that consistent quality for our clients in any market that we are in, making sure that we continue to grow in the right markets, continue to focus on the right clients, and that’s why clients need to be at the heart of the strategy.’
As part of this, the firm is now focusing internally on an ever-shifting list of 50 key clients which generate a significant percentage of its revenue, aiming to ensure that it is working with these clients across as many practices and jurisdictions as possible. The breakdown of these clients falls evenly across the firm’s key sectors: financial services, which already accounts for around a third of London revenue, retail and consumer and real estate.
With the firm ‘pivoting towards more City-focused practices than we’ve had before,’ the last few years have seen Addleshaws build a structured finance practice, as well as furthering its capital markets capabilities with a triple hire from Pinsents Masons in 2024.
M&A and private equity also form part of this push with Johnston calling private equity, where the firm sits in the top tier of Legal 500’s mid-market rankings thanks to work with clients including TDR and Inflexion, the ‘crown jewel’ of Addleshaws’ corporate practice.
As part of this focus on key clients, Johnston wants the practice to be more pan-European. ‘Now we’ve got a European platform it gives us the opportunity to sell that service in a different way,’ he says. ‘I want to make sure that the work we’re doing is, wherever possible, multi-jurisdictional. It’s one of the practice areas that will make the international platform hang together.’
While the £1bn revenue target may be ambitious, Johnston isn’t just chasing revenue growth: ‘There’s no point growing an attractive top line if the bottom line is going down the pan.’
Though not changing the underlying remuneration system, Johnston knows driving partner performance is important for profitability. As part of this it’s crucial, he says, that the firm is better able to recognise and reward outperforming partners – something the firm is working on addressing.
‘We want to call it a performance mindset rather than a performance culture. You can be a great place to work and still be more crisp about the mindset that sits behind the business … You need to nurture a culture and make sure it doesn’t get away from you.’ For Addleshaws, a core part of this culture means not losing sight of its national spine: London, Manchester, Leeds and Scotland, as it grows internationally.
Johnston points to a combination of continued domestic focus and international growth as being a winning recipe. ‘Bringing those two things together has been powerful for us. We’ve seen great traction in the Middle East and across some of our European platforms. But that has come off the back of having a really strong focus on growth in the UK,’ he says.
The business Johnston inherited didn’t call for a radical overhaul. ‘We’ve been a great firm doing really good work for lots of great clients,’ Johnston concludes. ‘What we need to do is have that confidence to tell the market and to tell clients what we’re doing and what we’re capable of achieving.
‘The £1bn target isn’t just a great headline. It will create a business of scale, and with scale, I hope we will be a business with choices,’ Johnston says.
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