Stephenson Harwood's chief executive on the calm after a prolonged storm
"The early 2000s was the most difficult time in my memory and it's not something we want to go through again" - Stephenson Harwood's Sharon White on why she feels her firm will sustain its dramatic turnaround...
March 01, 2012 at 07:03 PM
6 minute read
Stephenson Harwood's Sharon White tells Sofia Lind why she feels her firm will sustain its dramatic turnaround
Stephenson Harwood chief executive Sharon White (pictured) manages that tricky balance of maintaining loyalty to the firm's interests while also being relatively frank and open about her career.
Her relaxed demeanour may be partly due to the performance of the firm, which has sustained a dramatic turnaround after a troubled period in the late 1990s and early 2000s. Even since the global downturn gripped the market in 2008, Stephenson Harwood has grown its revenues for the last three consecutive years, just over two with White at the helm. The firm has risen from 38th in revenue in the top 50 in 2006 to last year reach 27th place as income increased 16% to £107m.
White, who has been with the firm since 1988, is modest enough to admit that she was fortunate to have taken over leadership at a time when her predecessors had gone a considerable distance in dealing with issues that had plagued the firm.
She especially attributes the success to the ground laid to John Pike, the firm's chief executive between 1996 and 2004, who had one of the hardest jobs in law firm management. Back then, Stephenson Harwood was a once-celebrated but fast sinking brand in City law with a lack of focus and a factional partnership. In particular, the firm became caught between the shift in the market that saw the emergence of transactional firms led by the magic circle on one hand, and the shipping and insurance litigation specialists on the other. Stephenson Harwood was left sitting awkwardly in the middle.
A troubled 2002 merger with Sinclair Roche & Temperley only aggravated matters, with the firm soon seeing average profits per equity partner (PEP) not far above £200,000. The work of Pike and his successor Sunil Gadhia saw the firm undertake a bruising but necessary partnership shake-up and usher in a sharper focus on targets markets.
White reflects: "We were facing many of the same problems that a lot of UK firms are facing now, such as low profitability and a lack of focus. At that stage, we were still priding ourselves on being a full service firm, which diluted the message of who we were. John Pike was very much grappling with those issues. He put us on the right track and laid a very good foundation."
As such, White has arguably been sheltered from some of the difficult decisions undertaken by City rivals during the recession.
"The early 2000s was the most difficult time in my memory and, because we had that period when we had to take a good look at our partnership, which nobody relished, it is not something we want to go through again. As a result, I have not had to de-equitise people or ask people to leave," she says. "I have been lucky that way."
But that is not to say that White has not had challenges on her watch. She says a lot of hard work lies behind the firm being able to keep a PEP level of £610,000 through the worst three years for businesses in recent memory, but the firm has also grown in size and scope during the period, with a significant number of City lateral hires and the expansion of its existing Asia offering. White also led the firm's corporate practice during the turbulent years of 2007 to 2009 before taking on the chief executive role, becoming one of only three women currently leading a top 50 UK practice.
Commenting on the relative stability during the downturn, White says the firm was well positioned because of its large contentious practice while it has also helped that Asia accounts for 30% of its headcount.
While continuing to head the firm's corporate practice, White has led the firm through expansion exercises, including launching in Indonesia in December 2011, and the firm has also recently applied for a Beijing licence.
For a firm with a modestly sized partnership of just around 100, Stephenson Harwood has built a substantial network of offices that includes Guangzhou, Hong Kong, Singapore and Shanghai, while the firm also has business flowing from growth economies including Korea, Malaysia and Vietnam on a fly-in-fly-out basis.
Given its recent form and expanding international horizons, Stephenson Harwood receives plenty of invites from firms wishing to discuss merger opportunities. "We will definitely see more mergers taking place in the market. We do get approached, particularly by US firms," says White.
"We would never say never, but we are also clear on the fact that a merger needs to be about something more than just making us bigger. It would need to propel us to new levels. Our firm culture is very important to us – we have a lot of partners joining, but we also have a lot of partners who have been with us for a long time."
White's confidence comes from a clear focus: "Our focus will be to grow our core strengths. Our Singapore and Paris offices are a good example of where we have grown slowly but surely over a long time. Some firms have had quite a checkered history with international growth, opening and closing offices. We have taken a more cautious approach, pursuing a strategy of growing the size of the firm through internal promotions and lateral hires."
After a strong run for Stephenson Harwood, and only in her first term, White would seem a likely candidate to go for a second (the chief executive is appointed via the firm's partnership council, not through an election).
She says: "It is too early to think about a second term yet. There are another three years until my term is up and it is going to be a difficult three years – starting with 2012, which is going to continue to be a tough environment. Although we have done well, we have had to work hard to do well."
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