Addleshaw Goddard wants to expand in any possible way and in any possible place following a sustained period of growth and the early signs of a successful Scottish merger.
The firm’s revenue for the 2016/17 financial year was up 23% to £242m from £197m, while profit increased 36% to £87m. Since 2012/13, Addleshaws’ revenue has increased 45%, while profit is up 68% over that same period. Its cash position has also improved £65m in that time, to have reserves of £34m.
This year’s financial results are inevitably bolstered by the inclusion of its Scottish merger with HBJ Gateley – a £20m firm which formally combined with Addleshaws on 1 June last year – but also includes organic growth, with England up 11%, Scotland 9% and the foreign exchange-impacted international arm 7%.
Addleshaws managing partner John Joyce told Legal Business the Scottish merger had bedded in fantastically well, increasing work across the firm: ‘I knew the amount of work that we were losing because we weren’t in Scotland, we could see every other week there was something missing for us there.’
The firm has been seeking mergers in other jurisdictions, with talks in Germany called off last June, as well as reports of US merger interest a year earlier.
Addleshaws chief financial officer Colin Brown said the firm’s growth over recent years, as well as the ‘very real example’ of the value driven by the Scottish merger, meant it had the appetite to do more.
Joyce commented: ‘We absolutely want to carry on expanding in any possible way that we can, in any possible place that we can. But we’re quite sensitive about what we want to do. We want to make sure that whatever we do, we do for the right reasons, but the ambition to do something is absolutely there.’
The firm has been active in the lateral hire market over the past year or so, adding 30 partners across England, Scotland, Asia, and in the Gulf region. Key hires include legacy Berwin Leighton Paisner’s (BLP) former Asia head Bob Charlton, as well as a six partner real estate team from Irwin Mitchell in Manchester.
Corporate and infrastructure were identified as targeted areas for growth, with Joyce saying the firm wanted to move up market to take work from Magic Circle firms. He pointed to highlight mandates including advising betting company GVC Holdings on its £3.9bn takeover of rival Ladbrokes Coral, as well as Lloyds Bank on its £1.9bn buyout of credit card provider MBNA as evidence of this ambition.
The retail and consumer sector grew 37% at Addleshaws, while real estate grew 23%. A key mandate in real estate was advising the Chinese government in acquiring its new Chinese Embassy in London, a client Joyce said the firm never would have had 10 years ago.
Addleshaws had set a 2017/18 revenue target of £250m a few years ago, which Joyce described as a ‘really ambitious target’ he could live with missing given the firm had bettered its profit target. He said the market outlook was unclear, but the firm wanted to continue to grow materially.
‘The market’s not bad, but I can’t describe it as a buoyant, flying market. Obviously, the question is when is Brexit going to do something? At some point something will happen and if confidence goes then that’s a challenge.’
