A prominent law firm in Manchester opts for employee ownership over lucrative private equity offers.
- Myerson Solicitors, with 150 employees, becomes completely employee-owned, marking a significant shift in Manchester’s legal sector.
- The firm anticipates a growth in employee-owned law firms, predicting numbers could double within two years.
- Carl Newton, the firm’s CEO, advocates for increased tax-free bonuses for employee ownership trusts to bolster growth.
- Myerson’s revenues have grown organically by 15% annually, summing up to £17.5m last year, without resorting to acquisitions.
The decision by Myerson Solicitors to embrace employee ownership represents a significant step in the legal sector, as it turned down private equity offers worth several millions of pounds. This shift positions Myerson among the largest UK law firms adopting this ownership structure, joining others across Yorkshire and the Midlands.
Chief Executive Carl Newton has voiced support for policy changes that would increase the ceiling on tax-free bonuses for employee ownership trusts, which currently stand at £3,600. Newton suggested that these should be increased to £4,400 to further incentivise firms to follow suit, presenting it as a potential catalyst for economic growth.
Newton projected a rise in employee-owned law firms, anticipating that the number could exceed 50 in the next two years. Currently advising other firms on adopting the model, Myerson stands at the forefront of this anticipated shift.
Rejecting private equity was a deliberate move to preserve the firm’s independence and culture, despite receiving substantial offers. The firm’s growth strategy prioritises organic expansion—aided by a consistent average annual revenue increase of 15%, accruing to £17.5 million last year.
With this transition, Myerson converted from an LLP to a limited company and obtained an alternative business structure licence. The firm’s partners have sold their stakes to the employee ownership trust, planning to repay over a flexible period of five to eight years, contingent on profitability.
Newton acknowledged the influx of offers, notably post-pandemic, from both private equity groups and regional law firms. However, he maintained that private equity ownership contradicts client interest and professional integrity in the long term.
The transition to employee ownership at Myerson Solicitors sets a precedent in the legal sector, encouraging economic growth through sustainable business practices.
