The turnaround: Gateley senior partner Michael Ward on how the firm is looking to cash in after the crash
By most reckonings, Gateley is a firm that has performed well in recent years. Under the leadership of senior partner Michael Ward profit per equity partner (PEP) increased nearly 10% to £288,000 in 2013-14.
July 22, 2014 at 08:34 AM
4 minute read
By most reckonings, Gateley is a firm that has performed well in recent years. Under the leadership of senior partner Michael Ward profit per equity partner (PEP) increased nearly 10% to £288,000 in 2013-14. That followed a 22% increase 12 months earlier, while revenue over the same two-year period has gone from £61.5m to £71.7m – an overall gain of 16%.
Contrast these results with those from a poor 2011-12, in which Gateley saw PEP and revenue fall by 11% and 2.4% respectively, and it could be argued that the firm is starting to turn a corner.
While the improved performance is not unrelated to the general economic recovery in the UK as a whole, Gateley's strengths are particularly well suited to the current economic climate. Property and building work, for instance, has picked up since the downturn, and is as an important source of their latest growth figures.
Gateley acts for major UK house builders, which are taking advantage of a booming demand for real estate, as well as government schemes such as Get Britain Building and Help to Buy, which are intended to boost the supply side of the market.
Ward (pictured0 has been in the hot seat since 2001. During his tenure, the firm has gone through myriad changes, particularly since the start of the recession in 2008. That year, Gateley opened its first international office in Dubai, just 12 months after it sealed two merger deals to establish a presence in the City. It went on to acquire failed firm Halliwells' commercial practice in Manchester in 2010, adopting an extra 38 partners and breaking into the UK top 50 in the process.
Another new office was to follow in Leeds in 2012 at the same time as the firm's City branch moved into a new office space.
Possibly of most significance however was this year's move to become only the second firm in the UK top 50 to secure an alternative business structure (ABS) licence, allowing it to appoint non-solicitors to its membership and to seek external investment.
While the licence means Gateley can cash in quickly should funding opportunities present itself, there are no immediate plans to do so.
"We had one immediate benefit from the ABS, in that we could include our finance director as a member of the business," explains Ward. "But long term, the flexibility it provides is key; if we kept going well and saw an opportunity, we would not want to be waiting six months to take advantage of it."
Increased investment may be an issue for the future, but with costs starting to rise his priority is clear: carry on increasing revenue to mitigate the impact on the firm's bottom line.
"During the recession it is easier to control costs than when the market is moving upward significantly," he says. "Suppliers had not been expecting increasing costs based on the state of the market. Large numbers of staff cost money, and people were more concerned about keeping their jobs as opposed to putting pressure on wage increases."
Ward is definitely wary of the heightened pressure on costs his firm now faces, as well as increasing competition at the regional level.
"We have all come through a difficult three to four years. Clients are now in a position where they want us to do more for less. The challenge now is keeping costs under control in the next 12 months, which will be tough.
"To keep out margins we need to deliver turnover growth. We still have large shares of regional markets, but there is scope to do more."
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