When Richard Crump took up his current role of senior partner role in 2007, Holman Fenwick & Willan, as it then was, had roughly 240 lawyers working across eight offices and revenue of just over £67m.
Today, newly reappointed for a fifth three-year term, the rebranded HFW has more than doubled its office and head counts, with more than 600 lawyers helping to bring in record revenues of £179m for the last financial year. And it has managed to do this without taking on debt or significantly impacting on PEP.
Key to the firm’s growth has been expanding internationally, with overseas offices now generating some 60% of revenues, as well as building out its practice base far beyond its maritime
roots.
In a tactic that differentiates it from its peers, the firm has often chosen to launch new practices overseas, building positions of strength internationally before looking
again at London.
These international expansion efforts are far from complete. Working alongside newly elected managing partner Jeremy Shebson, Crump says further expansion in the US is going to form a key plank of HFW’s strategy. Not content with merging with Houston energy and marine firm Legge, Farrow, Kimmitt, McGrath & Brown in 2017, Crump says Miami, Chicago, and New York are all of interest to the firm.
How HFW achieves this is yet to be decided, but it’s fair to say that merger – potentially with a bigger firm either in the UK or US – is a possibility. Here, Crump sets out how HFW has achieved its transformation from London shipping firm to international player and how bringing the partnership with him has been key to the redefined strategy.
How did HFW go about repositioning its business beyond what it was best known for?
A core part of our strategy has been to grow our aerospace, commodities, construction, energy, insurance, and shipping capability in the key international markets that are important to these clients. This has involved strengthening our existing offices and launching in new markets. We’ve opened in eight new markets in the past three years and added 24 new partners in 2018, including five in
London.
Sixty percent of our revenue is now international and that will increase.
How have you shifted your practice?
We’ve focused on growing the transactional side of our business, as well as boosting our litigation, international arbitration, and regulatory practices – particularly internationally. We’ve made several hires in London recently, but it is a very competitive market and it can be harder to build in certain areas, such as corporate and finance.
Our position is that once we start to acquire a certain size in a region, it gives us a credibility that perhaps we wouldn’t have for that practice in London. For example, when we targeted aviation finance to add to our strong aerospace practice on the contentious and regulatory side, we started that process in Asia Pacific and now we have one of the biggest aviation finance teams in the region. That has given us a strong base on which to develop the practice globally.
How have you managed to achieve this international growth without affecting profitability or taking on debt?
We’ve achieved it by being more efficient – billing more quickly, for example – and by being very selective about our investments. It becomes more of a challenge as we continue to expand and the partners have said they would support borrowing to fund a worthwhile project if we had to.It’s essential to have your partners on board when you’re growing like we are.
What are your plans internationally now?
We now have a large international network across the Americas, Europe, the Middle East, Asia, and Australia.
We would like to have a bigger presence in the US and we’re open minded as to how we achieve that. Miami is interesting as a gateway to Latin America and an important shipping hub; Chicago is interesting because of the commodities market; and of course there’s New York.
It’s more about finding the right opportunity than saying we want to be in a specific city. If a firm is focused on one of our sectors and is in a market that is important to that sector, we’d potentially be interested but we would also be open to something bigger.
What about London?
We’re particularly keen to expand in certain areas in London, such as construction and project finance, but we’ll seek to continue to grow across our sectors and also in corporate, finance, and litigation.
What are your other priorities?
Talent management is a real strategic priority. The career ambitions and expectations of young lawyers have changed beyond all recognition. It’s no longer about staying at the same firm for your entire career and hopefully making partner. When you consider that firms essentially invest in a young lawyer at the start of their careers and only begin to make a profit after
they’ve been qualified for a couple of years, that presents a real challenge. But it’s also an opportunity – the successful firms will be those
that adapt.
We’re also constantly reviewing the services we deliver to clients and the way in which we deliver them. We’re looking at how we
can use technology to be more effective and more efficient, and how we can reduce costs by being more agile and working smarter. We’re also looking at other services that we could offer that would be of value to clients. We recently launched a standalone consulting business, HFW Consulting, which has been very well received by clients.
What advice would you have for other firms looking to expand beyond what they are traditionally known for?
It’s about focus and bringing your partners with you. Be very clear about what your strategy is, stick to your knitting and don’t get distracted. You need to be clear about what you are going to do and what you aren’t. There are opportunities, because sophisticated clients are very discerning about who they use for particular matters.
What impact will Brexit have on you and the UK legal market?
We’d be foolish to say Brexit won’t impact on us, but I do think people will continue to use English law for disputes and contracts – it’s been around for ages, everyone understands it and it’s a great product.
These are challenging times, though. I remain genuinely optimistic but we can’t all keep growing at this rate. There will be some consolidation, in part because of the benefits scale can bring for big investments. If you need to spend £10m on an IT project, for example, the cost per partner in smaller firms is going to be much higher and the investment cost wouldn’t be proportionally that much smaller.
Talking about consolidation, would you consider merging with a firm in the UK or elsewhere?
I think all firms will be looking more openly at merging now. We’re not actively seeking a large merger partner, but we would be open to a combination of significant scale – in the UK or elsewhere – if it aligned with our strategy and if the cultural fit was right. Partners will always prefer to combine with a smaller firm, but good partners will do well in any environment.
How do you go about shifting partner mindsets on matters like this?
Lawyers tend to be cautious and conservative by nature, but they are increasingly focused on the business side of legal practice. Our partners know that the market is changing and that we need to adapt to these changes – preferably ahead of the curve. You just have to make sure you bring the partners with you on the journey.