All change on the North-Eastern Front

In the 1990s, senior partner Andrew Hoyle was convinced that his firm Watson Burton needed to transform itself from its staid traditions to become a forward-looking, entrepreneurial business. The financial results of the past couple of years, together with the firm’s growing reputation for success, suggests his efforts have paid off. He tells Caroline Poynton how his team went about the transformation and what challenges they faced along the way.

For many people, the Geordie brickies of ‘Auf Weidersehen, Pet’ sum up everything they need know about Newcastle, albeit washed down with several bottles of Newcastle Brown Ale. Originally inspired by mass unemployment in the North East, the series reflected the plight of a city faced with the collapse of its traditional shipbuilding and mining industries. Sadly, however, that image of the down-and-out city has prevailed. Even its recent renaissance, embodied in the city’s waterfront regeneration and the Millennium Bridge, has done little to rejuvenate the perception that Newcastle remains a poor contender in lifestyle and wealth compared to other UK cities, north and south.

However, while the city gradually rebuilds its reputation, recently narrowly missing out on becoming European Capital of Culture, a more grass-roots development is taking place as businesses appear to be moving to and flourishing in a different reality, that of an all-new city of opportunity. Nowhere is there a better example of this transition than in the formidable recent success of Newcastle firm Watson Burton. Under the leadership of senior partner, Andrew Hoyle, the firm has enjoyed two record years, with turnover hikes of 27 per cent in 2002-2003 and 29 per cent in 2003-2004, making it one of the fastest-growing commercial law firms in the UK.

Hoyle agrees that Newcastle still presents a challenge for recruitment. “Those people who know the city find that it is a very agreeable place to work and live and if you can get somebody up here, by one means or another, then it’s actually quite easy to sell the city and the job. But the traditional misconceptions are still there in the minds of some,” he says. Thankfully, he maintains that the problem has eased over the past couple of years as the city has received more favourable publicity, both professionally and culturally.

It also seems likely that recruitment success has come from the firm’s internal rejuvenation, as Hoyle and his team have strived to reform what he describes as the staid Watson Burton of old into a firm that, much like its home city, promises much for the future.

Hence, just like Newcastle, Hoyle describes the real challenge for the firm as being the need to overcome its ingrained image of old. “There was a lot of time invested in the late 1990s getting Watson Burton to a position that it could move forward, but during that period we were also deeply frustrated that the outside perception of the firm was very different to the underlying practice that we could see,” he says. A traditional firm, whose only form of marketing was its quiet reputation for quality, needed a facelift, but Hoyle describes the practice of the time as being inward looking, with few individuals in the firm sufficiently devoted to implementing change. He admits that it took a long time to persuade others, internally and externally, that the practice had the ability and qualities to make good progress. As Hoyle says: “We got there but only by attrition, banging the drum and seeking to demonstrate the benefits to make people believe that this is a practice of opportunities and good careers.”

For all the difficulties, Hoyle attributes the success of this long-term strategy to a team effort. Having joined the firm from Robert Muckle in 1992, Hoyle was made senior partner in January 1997 and charged with overseeing the firm’s strategy. Hoyle also retained his client-facing work, creating a difficult balancing act that he describes as sometimes impossible. However, Hoyle has been supported throughout by the firm’s management board, which consists of the managing director, who manages internal operations, the finance director, business-development director, two partners and a non-executive. Together they have worked hard to recruit well to broaden the practice, and have invested significant time and money in the firm’s branding and marketing efforts.

Such a strategy was not without its risks, however. Hoyle describes the firm’s turnaround as a snowball effect: it took a while to build things up, but once the strategy got going and built momentum, there was no stopping its impact. Beyond the management board, however, achieving partner buy in for an expensive marketing and branding exercise that would yield little tangible return, at least in the short term, sounds like the stuff of many a partner’s nightmares. Hoyle never doubted his team’s backing, however. “Our partners have been supportive and patient. There were early signs that the practice was going to be successful in reinventing itself, it just took longer than we necessarily imagined,” he says.

This firm’s support for change is also evident in Hoyle’s ability to maintain his client-facing work in corporate transactions. For instance, he says: “I’m assisted by a team of corporate lawyers who do a lot of the work and call upon me to add value in circumstances where I can best do that.” Whether he will be able to maintain this balance as the firm expands is questionable, but Hoyle is adamant that he will never give up fee earning. “I think you become intellectually flabby when you give up client work. Telling people what to do is very easy but it’s a lot more difficult to do it yourself. Servicing clients helps to keep you sharp intellectually and it gives you the authority to tell people how best to run their practices,” he says.

Such an outlook also marries well with his approach to leadership, which he believes is about providing an example, combined with enthusiasm and encouragement. “I like to put people in a position where they feel supported to make decisions by themselves, and I don’t ask people to do things that I wouldn’t do myself,” he says. Positioning himself as just one of the team has worked well for Hoyle so far but he may find that as the firm progresses he will need to bring a weakness into play that he has until now attempted to suppress. He describes himself as having to work hard at his powers of diplomacy to avoid his natural instinct for being blunt. He agrees, however, that this tendency comes from his instinctive ability to see through to the heart of a problem with clarity. As the firm grows and more people come under the management team’s wing, he will surely call on this particular skill more frequently. Even his concern for softening his message may become less relevant as he has to make the difficult decisions necessary for driving forward a much larger firm.

Of course, strategies and outlooks will inevitably be revised as the firm expands and its particular management needs change. For now, however, Hoyle’s strategy has worked well for a regional firm at the beginning of its path to expansion. The larger national and international firms have greater resources and can pull experience from a wider geographical base. Equally, where larger firms can use their status to establish themselves on panels, the smaller regional firms have to fight hard to get equal recognition. Many firms have struggled against such challenges, finding their services swamped by the sheer size of the larger firms in an expanding market. Hoyle has recognised, however, that such disadvantages can be turned into distinct advantages. “The difficulty with national firms is that they often have a one-size-fits-all approach to management, which leaves their practices unable to adapt to local markets,” he says. “We can ensure that our strategy suits the market that we are seeking to serve. We can be flexible and adapt where things are not working. We can also meet opportunities as they arise.”

Indeed, apart from impressive figures, there are other signs that the firm’s strategic direction of late is paying dividends. For example, the firm has recently moved into new premises that will allow the firm to expand by 40 per cent. Hoyle also says there are plans afoot to open an office in Leeds, reinforcing his prediction that the firm will grow substantially over the next few years.

In another sign of a firm looking to the future, Hoyle has led its recent conversion to an LLP. While describing the process as surprisingly smooth, he says something that is more telling of this recent strategic move. “I foresee that the vast majority of substantial practices will be limited liability within five years, so why would we wait for circumstances to overtake us?” he says. It is a comment that reflects the firm’s success in transforming itself from an inward-looking traditional practice to a business firmly focused on the future of the legal profession and its place within it.

For the first time, recent figures suggest that the magic-circle firms may have enjoyed their predominance for too long as mid-tier firms storm their way to profit through innovative management and effective leadership. While Hoyle would not attempt to suggest that Watson Burton is up there competing for a place at the top, he knows he’s heading up a firm that’s going places and, just like the city of which it is part, is likely to be of increasing interest to the business people and communities of tomorrow.