A major law firm has opted for employee ownership after rejecting offers from private equity worth “millions of pounds.”
Myerson Solicitors, one of the largest firms to transition to employee ownership, announced its decision following substantial private equity interest. Chief Executive Carl Newton disclosed that the firm had received numerous offers from private equity investors, which they declined to preserve their independence and organisational culture.
Newton predicts a significant rise in the number of employee-owned law firms, potentially doubling to over 50 within two years. Myerson is the first Manchester law firm to become entirely employee-owned, joining other significant firms like Ison Harrison, Talbots Law, and Hudgell Solicitors.
Employee ownership trusts (EOTs) are believed to foster growth and staff retention. Newton supports the Employee Ownership Association’s proposal to increase tax-free bonuses for EOT employees from £3,600 to £4,400, stating Myerson intends to meet or surpass this bonus cap by the end of the financial year.
Myerson has consistently grown its revenue by an average of 15% annually over the past decade, reaching £17.5 million in the last financial year. The firm aims to continue this organic growth model and has no intention of altering their established approach.
In their transition to an EOT, Myerson converted from an LLP to a limited company and secured approval for an alternative business structure from the Solicitors Regulation Authority. The firm’s 24 partners sold their shares to the EOT with an agreement to repay over five to eight years, adaptable to the firm’s financial performance.
A new board of trustees now oversees the firm’s management in the best interests of employees, while Newton and the existing board ensure effective day-to-day operations. Despite attractive offers from regional law firms and private equity, Newton asserts that such ownership would undermine the firm’s autonomy and customer-centric ethos.
The firm anticipates advising more law firms on transitioning to employee ownership, with interest growing steadily post-pandemic. Newton expresses surprise that Manchester, the nation’s second legal centre, had yet to establish an entirely employee-owned law firm until now.
The move towards employee ownership signifies a transformative approach in the legal industry, prioritising staff involvement and long-term growth over immediate financial gains through private equity.
