Price Bailey has recently advised Anthony Gold Solicitors LLP, a large London-based multi-specialist law firm on a restructure to an all-equity model. The Firm has grown a profitable litigation business over a number of decades and the decision to restructure to an all-equity partner model marks an exciting new chapter for the firm.
The Firm’s equity partners had invested significant capital into successfully growing the business over many years. Price Bailey was appointed by the Firm’s management board to consider the most appropriate way to plan for succession.
Following our initial review, we assisted the board in exploring the possibilities of an internal restructuring (including employee ownership), profiling the market for a potential trade acquirer (and understanding the deal structures prevalent in the legal sector) and considering the suitability of private equity investment as an alternative.
A key part of our work was to foster an element of reflection, considering the Firm’s strengths and the opportunities that are available and that could be leveraged by those key stakeholders in the coming years. Understanding and articulating the opportunity and the business plan through the development of a financial model helped to outline the value of the Firm to the equity partners and review the potential deal structures to all parties to a deal.
Through the use of detailed financial modelling, strategic modelling and considering exit options via the acquisition and private equity market, the management board recognised that the best route forward was to continue as an independent organisation. The key drivers for this decision were a combination of ensuring continuation of the firm’s culture, and establishing a transaction structure which was beneficial for all parties involved.
Once the Firm had made the decision to continue independently, we supported the management board to plan a change to the ownership structure that rewarded the equity partners, but that also moved the business forward into an all-equity model for all partners. This new model struck the right balance for all parties.
The team at Price Bailey helped the management board to develop the all-equity structure, model the capital and cash flow implications, review the new members’ agreement and to present the plan to the Firm’s partners.
The Firm has now started a new chapter in its operations led by a strong partner group driving continued growth in a broader ownership model.
The Firm’s Managing Partner, David Marshall, commented
Price Bailey’s deep experience in a wide range of options for professional services firms was invaluable to us. In a turbulent time for many law firms, the vote of confidence by partners in our core values and financial prospects, supported by Price Bailey’s independent review and recommendations, is extremely welcome and secures the future independence of the firm. A platform for future growth is being built and I am very much looking forward to the next chapter.
Chand Chudasama, Price Bailey Partner added
It was a pleasure to work with David and the Anthony Gold team to help them evaluate and market-test some quite major decisions. Working through these choices through an agnostic process, supported with combination of rigorous analysis and debate, allowed this evolution of ownership to be defined in a careful and considered manner.
The ultimate outcome to stay independent and move to an all-equity structure rather than take the usual routes out of the independent model is a compelling endorsement of the firm’s successful business model, culture and more broadly the decision making style of a Partnership that acts in the interests of creating long term value over and above realising short term opportunities.