When a firm has a strong reputation in a niche area and has some of the key players in a particular industry working within it, this very strength can bring singular problems with it regarding the management of the firm’s profile, growth plans and future development.
Since its establishment in 1985, Marriott Harrison had been known primarily for its work for the film and TV production industry, acting for such luminaries as Universal Pictures and Aardman Animations. The firm’s reputation in this field arose as a consequence of its work conducted in a high-profile area, as opposed to a planned and managed effort to position the firm.
As markets diversify and change, new commercial and legal skills are required of those that advise them. While a strong niche reputation can be powerful in attracting more of the same type of work, it can be counter-productive by attracting work in developing and complementary fields. By the same token, a high profile in a specialist area can be very positive in attracting new recruits to the firm, but can effectively mask its abilities in other disciplines, thereby making it harder to attract the attention of the best candidates for those other areas of the firm’s business.
A further problem is that a top niche practice is often built around the reputation of a few individual lawyers. Again, this can mask the abilities of the firm as a whole. Of more concern is what to do if a high-profile key individual leaves. Their level of in-depth industry expertise and the extent of their network of contacts is inevitably impossible to replicate.
In the early 1990s, the partners at Marriott Harrison sat down and scrutinised the firm’s existing business and its exposure in niche areas dominated by sole individuals. We also took a long hard look at the market forces that necessitated change and reviewed the opportunities that were available to us.
The firm needed to adapt in two ways. It needed to develop a strong corporate team that was not only capable of servicing the increasing requirements of its media clients but also of creating its own business base. It also needed to ensure that the media team could adapt to the changes we saw coming to the industry, and taking advantage of the opportunities these changes would bring.
This reshaping of the firm has proved successful. For the last two years, average profits per partner have been at about £230,000. But the most telling statistic is the change to the proportionate contributions of our various teams. In the financial year ending April 2000, company commercial work accounted for 50% of the firm’s turnover. The proportionate contribution of the film team has been dropping, to 17% in the year ending 1998-99, and falling to 11% in 1999-2000. The work of the commercial media team (which handles a range of work including software and new media) has been steadily rising, now accounting for more than 20% of turnover.
Developing the corporate team
This ambition presented us with a recruitment challenge: we had always been able to attract good corporate lawyers keen to act for film and TV companies, but we were now more interested in developing a team that could develop its own business agenda and that wanted to run with its own ideas and client base.
In 1993 we were joined by ex-Slaughter and May corporate lawyer Jon Sweet. Duncan Innes, then an equity partner at Richards Butler, joined in January 1994 and Jonathan Pearce (ex-Ashurst Morris Crisp) joined the following month. This team has been highly successful in developing its own client base, which includes Durlacher Limited, Foreign & Colonial Ventures, GLE Development Capital, Lica Development Capital, ProVen, HSBC Enterprise Fund, as well as continuing to act for the firm’s media clients.
A particular strength of this team has been its success in carving a niche in internet financings – a good strategic fit with the work of the new media practice, although the team has developed the work from a largely independent client base. E-commerce, internet and other new media-related work (including both corporate finance and commercial elements) accounted for 18% of the firm’s turnover in the year ending April 1999, rising to 28% for 1999-2000.
