WHEN he took over as managing partner of MacRoberts last year, Neil Kennedy said his plan was to grow the business via acquisition. Having followed up the December 2017 merger with debt recovery specialist Yuill & Kyle with the addition of Murray Snell earlier this year he has been as good as his word.
“Yuill & Kyle is really working out well and is making a contribution to turnover but also to profit growth; I’m very happy with that” Mr Kennedy said.
“We did a second acquisition at the end of last year with Murray Snell, a long-established firm in Edinburgh with a focus on private client work, estates work and commercial property work.
“We’ve been looking to grow our private client offering in the east for many years and we also wanted to bring new service lines into the Edinburgh office.”
The deal has increased MacRoberts’ headcount by 12, three of whom are partners. Though it was finalised after the firm’s 2018/19 year-end, early indications since the Yuill & Kyle deal are that the acquisition strategy is starting to pay off.
Having endured broadly static revenues for the six years to 2016/17, the firm posted a three per cent increase to £18 million in 2017/18 and followed that up with a 4% rise to £18.8m in the most recent financial year. Growth in profitability was even stronger at 12%, although at £5.9m the firm’s profit figure is still some way off the £6.9m it generated in 2015/16.
The firm’s people have all been able to share in that success, with the firm overhauling its remuneration and bonus systems since Mr Kennedy took the helm.
“During the last financial year we more than doubled our bonus to non-partners, paying out 120% of what we paid out in the previous year,” he said.
“It’s based on individual achievement, the achievement of the teams people are in and there’s also an all-firm bonus. Some people received a total of 19% of their salary.”
The firm has also been looking at its working practices to ensure that, in addition to getting paid well for the work they undertake, staff are able to work in a way that suits them.
“We do flex Friday so people can start early and finish early and we have a large number of lawyers and non-lawyers who work all kinds of different patterns, both in and out of the office,” Mr Kennedy said.
With the firm’s staff encouraged to work from home if it suits their needs as well as those of the business, Mr Kennedy is also keen not to be tied to one particular desk. His strategy of spending time in each of the firm’s offices each week is designed not only to show leadership when it comes to working flexibly but to ensure he is accessible to the firm’s staff too.
“I work across all three offices, which caused a bit of confusion for people to begin with,” he said. “In business, people talk about doing simple things well; in a people business if you’re not visible and speaking to people then you’re doing it wrong.”
Mr Kennedy believes that changes to pay and working practices are having an impact of staff morale, with retention rates improving significantly during the 2018/19 financial year while overall headcount rose from 211 to 232.
“The business is stable and people are happy with the strategic direction the firm’s taking,” he said. “We’re bringing a lot of focus onto the performance of the business and making sure we’re getting people to perform at their best.”
To continue to achieve that, Mr Kennedy said the firm will have to continue to invest. While he noted that the growth in profitability is “really pleasing”, he said the fact the firm’s cash position doubled to £1.7m over the 2018/19 year is even more significant as it will give the firm “the ability to invest and be agile and use our cash to grow our business”.
Though that will inevitably mean further acquisitions for MacRoberts, Mr Kennedy said that for now the focus is on growing the firm's six-year-old Dundee office to tap into the booming technology and oil and gas sectors there.
“We’re doubling our space in Dundee as we want to go from 20 people to 40 in the next month,” Mr Kennedy said. “We want to have a stronger Dundee presence.”
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