Andy Raynor: My priorities at new top-50 UK law firm Shakespeare Martineau

Shakespeares and SGH Martineau have agreed to merge on 15 June 2015, creating a new top-50 UK law firm called Shakespeare Martineau.

The deal constitutes Shakespeares' eighth merger in the past nine years. With SGH Martineau formed from the merger of Sprecher Grier Halberstam and Martineau in 2011, the new firm will have nine mergers in nine years under its belt.

"It's the largest merger we have done and we knew from day one that there was a lot to learn from our merger partner," Andy Raynor, CEO of Shakespeares, told Managing Partner.

This includes "the depth and experience they have in sectors and the way they approach the marketplace, which would have taken us some time to do by ourselves".

In 2013/14, Shakespeares' revenues rose 10 per cent year-on-year to £50m, while Martineau's dropped 3.7 per cent to £27.5m. The newly-merged firm is expected to have revenues of £75m from 900 people across eight UK offices and one Brussels office.

"The merger puts us on day one as a top-50 firm. And I think that there's an importance, in a very rapidly-changing legal marketplace, to know that we are of the kind of scale and reach and expertise to have a real impact on the market," said Raynor.

"We think we are as good as any firm in the legal market," he continued. "Our attitude in the merged firm is that we are ready to compete with any firm and to justify our position in acting for any client."

"What this merger does is it now gives us the full kit of parts in order to be able to do that, together with the ability to invest for the long term in our business in a very strategic way.

"For both firms, I would see this pretty much as a game changer."

Culture and values

One of the challenges posed by the merger is the integration of two offices, in Birmingham.

"That's a real opportunity for integration which we hadn't really had previously," said Raynor.

Another challenge will be ensuring the new firm brings together all of the businesses which have been merged into Shakespeares.

"There is a huge amount being done to integrate the parts of the firms that had been brought in over that nine-year period."

In January 2015, Paul Wilson announced that he was stepping down after nine years as CEO of Shakespeares; he had led the firm through seven mergers.

"This is a decision primarily driven by personal circumstances," said Wilson at the time, noting that would be joining Canadian boutique law firm Smart & Biggar as managing director. "I am looking forward to the challenge of working in a completely different legal culture."

Culture and values will be a big focus for Shakespeare Martineau in the coming months; Raynor intends to leverage SGH Martineau's strengths in this area.

"From the point of view of Shakespeares, there are a number of businesses that have come together and we've been really distilling the essence of what they are over a relatively short period of time, whereas Martineau have the advantage of a much longer history and a much deeper focus on some of these things," he said.

Asked what Shakespeares has learned from undergoing eight mergers in nine years, Raynor responded: "The more you pace yourselves and learn about your peers, the better the merger turns out to be."

Efficiencies and people

As with any merger, efficiencies will need to be made to ensure two different businesses work well together and overlaps in roles are addressed. Raynor declined to comment on the specifics of these changes, however, noting that they would be determined later.

"That's frankly too early to say. We have to understand all of the ways that we operate," he said. "This is actually more about reorganisation and redeployment."

A bigger issue, for him, is talent retention, with rising competition in the market posing new challenges for firms focused on growth.

"What we need to do is to concentrate on making sure that we're fulfilling people's careers and, where there may be changes within the teams, to try and make those are a small feature of what we do rather than a major change," he said.

"We've brought these businesses together to actually expand and grow, not to in any way contract what we do or our staff complement."

As part of that talent strategy, the merged firm will continue to operate Shakespeares' 'academy', at which people receive support to develop their interpersonal skills and their role within the firm.

"The basis of the academy is that we believe that if we make a contribution to the careers of the individuals within our business, they will make a contribution to the business as a whole. We will expand it and celebrate it even more in the enlarged firm," he said.

Asked about the impact of this approach on the firm's talent retention to date, he said retention rates have been "entirely reasonable", but noted that "everybody needs to work harder to make sure that they keep people".

A merit-based remuneration structure will be used in the new firm, but there will also be a base income level for all partners.

"We have to make sure that our people can pay their bills," he noted.

Significant weight will continue to be placed on firm citizenship to ensure everyone is acting 'firm first' and providing client-centric services.

"I think any firm in this marketplace can do those things better," said Raynor.

"Making sure it is an intrinsic part of the way we reward people just means that it is front-of-mind all the time. But, what we want to do more than anything else is to make it a natural part of the way that we act."

Leadership and management

The new firm will be run by a main board, which Raynor will head as chief executive.

Emma Shipp, currently managing partner at SGH Martineau, will also have a place on the board, "with responsibilities around bringing the firm together and also the London office, which is extremely important to us," said Raynor.

He added that other members of the board will be partners who have been selected for their management ability and view of the firm. A non-executive director with a financial services background will also join the board.

Asked what Shipp's title will be at the new firm, she said: "I'm a partner; I'll be responsible for one third of development. We're not really hung up on titles, at the moment I'm managing partner but, as you probably know yourself, that could be translated as general dogsbody!"

She continued: "So it's not about titles, it's more about the desire to bring the firm together and really meaningfully moving forward as one firm. So that is a really key role as I see it."

Open communication between both sides of the business will be a key focus in the coming months.

"I think we've got to be as open as possible on this. The most important element in the early period of bringing two businesses together is to get to know each other as thoroughly as possible before making the deepest decisions," said Raynor.

"We also need to make sure that we are athletic enough to make changes in the way that we have normally acted and the way our merger partners have normally acted in order to be able to make the best for the firm."

He continued: "There will be a lot which is about communication, understanding each other, looking at where our strengths are, where we need to make sure that we are acting together to deal with any gaps there are in the structures that we have."

Priorities and ambitions

Over the next three years, Raynor intends for the new top-50 firm to become a significant competitor for client work at the top end of the market.

"Shakespeare Martineau can compete with any firm in the top-50 and it frequently does. Our competitors are very frequently very solid, substantial, top-50 firms," he said.

Key to achieving those ambitions will be growth and development of both the firm's clients and its people.

"Organic growth, investment in our people, attracting the best and a high-performance culture is what we are trying to create here," he noted.

Raynor was hesitant, however, to confirm if further mergers are on the horizon for the firm over the next three years.

"Three years is a very long time," he said. "What I would say is that the priority today and the priority in that period has got to be making sure that these firms are brought together to the best effect. We will not be contemplating any other major transactions until we believe that is the case."

He continued: "So our number one priority today is making sure that we get the best from this merger and not thinking about what's in the future."

Clearly, Raynor has his work cut out for him.

Manju Manglani is editor of Managing Partner (www.managingpartner.com)