Law Firm Partner Retirement
This case involved a long established firm in a major city. It had 5 partners, of which 3 were over 60 years old and employed around 40 people in total. It dealt mainly in property (residential and commercial), private client, company commercial and litigation. Although turnover was approximately £2 million, the company finances were not good and profitability was well below the benchmark, with borrowings equalling almost 6 months’ turnover.
The company was prompted to work with Mosaic after 2 of the partners attended one of our seminars and also their bank manager attended another of our seminars and suggested we should meet.
The client’s main aims were:
- To get borrowings down
- To get profitability up to benchmark levels
- To secure succession or exit
To help them achieve these aims, we:
- Reviewed their situation, interviewing all key people and analysing their data and systems in depth
- Identified opportunities to generate cash and reduce borrowings
- Identified areas of underperformance and helped resolve these
- Led a Partner Workshop
- Prepared a (recovery) business plan
- Upgraded their Management Information, and trained key staff on basic Finnacila management
- Introduced a system of financial forecasting to ensure no surprises!
- Acted as a conduit to their bank
Having got the company back on an even keel, we then:
- Helped them avoid a very unpalatable takeover
- Introduced them to a larger firm who were keen to grow
- Helped the Partners negotiate suitable packages in the larger firm
All of this took just over two years and we were very hands-on in terms of some of the more difficult aspects of the recovery programme. As a result, the partners were all able to exit on terms which were acceptable to them, either as Partners or Consultants with the larger firm.
The main lesson learnt was that cash is king – by focusing on cash flow and bringing borrowings under control, the firm was able to manage the exit process in its own time, and find a new owner with compatible aims and ethos.