Introducing David Pester: Using sectors for growth

27 Nov 2014

TLT was created through a merger in 2000 with a strong initial focus advising financial institutions. It has grown significantly since then, building a UK-wide commercial practice and adding sector expertise in areas like retail, leisure and energy & renewables. Its newest office is in Manchester where a growing team is fast building an enviable client base.

After Jepson Holt’s annual conference, we spoke to keynote speaker David Pester, Managing Partner of TLT, about the firm’s sector strategy and how this has been a catalyst for growth.

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David, what is your background with the firm?

I became Managing Partner in 2002 but prior to my appointment I was one of a number of people involved in the creation of TLT in 2000 as a partner of Lawrence Tuckets; we merged with Trumps to become TLT. At that time, we comprised around 180 people with an annual fee income of around £11million. We recognised an opportunity to compete with some other strong brands in the area and the creation of TLT meant that we could offer a greater breadth of service.

 

The firm’s roots are in advising the financial services sector; when did TLT decide to expand into wider commercial areas?

TLT started out as predominantly, although not exclusively, a commercial law practice. From the outset, we advised the financial services sector and had substantial corporate and real estate teams. By combining to form TLT, the larger firm had a better investment capacity for future growth.

Around 2002, we began to focus on particular industries and our sector focus has certainly led our development since that point. Today, we are a commercial firm with recognised expertise across a broad range of legal services in the sectors where we have chosen to specialise. It has always been our intention to remain and grow as such, developing services that deliver for clients in specific industries. Our strategy develops alongside our clients’ needs and as opportunities present themselves. TLT has evolved since the firm was created but I can identify clear stages where our strategy has been adjusted depending on the firm’s growth in expertise and scale.

 

The acquisition of Lawrence Jones in 2005 saw TLT move to the City, followed by a subsequent acquisition of Constant & Constant in 2007; which new markets did this open up? Was the decision to expand client-led?

Strategically, there were a number of appointments which took place prior to the 2005 acquisition and which set the scene for the move into the City. We made a series of significant lateral team hires, focusing on strength of expertise in specific areas. In 2003, our retail focus brought in a new team of around 6 or 7 people which, although passing under the radar in terms of industry attention, was an important step for us.

Every decision we have made has been client-led. We spoke with and listened to our clients as to how TLT could be relevant to them. Our financial services clients did not expect us to become a London-centric firm but, following our lateral hires, we thought that a London base was needed in order to enhance the services we already offered which led to us making the acquisitions in 2005 and 2007.

 

TLT’s sector focus is very apparent; why did the firm decide to take the ‘sector’ route rather than the traditional ‘practice area’ route? Was this a conscious decision or something that developed as a result of the traditional client base?

From the start, the financial services, retail and leisure industries were a particularly strong focus for us and our strategic decisions have been based on client need. I believe that by focusing on fewer areas, you can be more successful. Size doesn’t limit how successful you can be, just the number of areas you can be successful in. We focus on some clearly defined areas where we believe we have credibility and traction. Aiming too wide will dilute the message and will cause confusion in what you are trying to achieve. The UK legal services market is not growing rapidly and so success is more dependent on gaining market share, demonstrating differentiation and a good USP.

We recognised opportunities in a number of industries predominantly as a result of pre-existing skills at the firm and our client base. Rather than simply pursuing targets, the service is enhanced by our people becoming truly informed about their chosen industries; buyers value the insight and knowledge we bring alongside our legal expertise in what is still a very fragmented market.

The sector approach has two sides to it; firstly, internally it helps to shape where our investment decisions should be by focusing on fewer areas and secondly, from the client’s point of view there is a strong focus on empathy and alignment as we understand the context within which they work.

 

How did the firm choose which sectors to concentrate on?

The decision was partly historical. In 2002, 10% of our business was in financial services and this is now at 40% so we have seen significant growth. We could see that we had good retail and leisure clients and we adapted to reflect those clients’ reactions to the changing economy. We always try to look ahead within the areas we already work to identify new opportunities or with a view to enhancing our expertise. For example, within leisure many changes were made in licensing where legal input is required and so we made lateral hires to satisfy that demand.

We don’t exclude working in other industries such as manufacturing, and our geographic reach opens new doors. There has certainly been an evolution from where we started, incorporating sectors such as technology and media and housing into our existing banking & finance, real estate and corporate service lines.

 

Does the approach bring mutual benefit to both TLT and your clients?

A sector focus means that you can offer opportunities to people interested in those particular industries, which is a strong motivator. Many law firms are still organised by practice area; an industry grouping gives you the ability to bring together individuals from different disciplines which strengthens their all-round skills. We are able to target clients not just by discipline but by the full range of services the firm offers. Instead of approaching a client with a view to performing their real estate legal function, we can approach that client from a sector viewpoint in order to satisfy a much wider outsourced legal need encompassing perhaps commercial litigation, corporate and employment in addition. Our industry knowledge means that we present to clients in a way that is of interest to them, by demonstrating our expertise in their field.

The approach must be more than a marketing tool. Industry know-how must come from within the firm in order to improve knowledge and both develop our people and innovate our systems. Succeeding with a sector approach depends on how you improve and enhance your own service.

 

Would you agree that the sector focus has driven the growth of TLT?

Growth has to come from not just a successful sector approach but also deep expertise. Concentrating on sectors allows us to create spaces where we can really compete with larger and more established firms, developing true differentiation in our service and approach. For example, TLT is one of very few firms with a reputation for innovative collaboration with Magic Circle firms. We look at client behaviour and their challenges in order to drive our own growth.

As a business, TLT could have chosen to do some transactions for scale alone but we always ask whether we will gain any competitor advantage from doing so; we want to enhance our service through strategic transactions and not simply scale up purely for size. We never rule out that we may get bigger but increasing our size will be a consequence rather than a specific intention; of course, this may change depending on competitor behaviour but we are comfortable with our strategies at present. We will always be dynamic and alive to the market.

 

From a practical point of view, how is the firm organised internally? Traditionally, practice areas are located together; at TLT do people work within sector or by practice area?

Both, in part; people are seated according to practice group to share know-how, but we develop our services by industry. Banking and Financial Services is one industry-focused element and is our biggest department but a large number of people are involved in multi-discipline sectors and they work within practice area teams. Our internal organisation doesn’t affect how our service is delivered; we operate nationally and adjust our resources by working open plan and so on, which allows the organisation to flex depending on client need.

 

How do you motivate and encourage people to work together across departments and sectors?

We must always keep working at it. We are at an advantage in that we started in 2000 with a clean sheet which allowed us to develop an industry focus. We could therefore shape from the very start how we wanted to evolve and our values have remained constant.

Our people are always heard, valued and invested in, to help them develop and improve. If that approach works, people will work together for mutual benefit. We are keen that people collaborate and teams do work together. As a firm, we ensure that our values and culture are very clear.

 

How do newcomers to the firm and junior lawyers find working within sectors?

The industry focus has attracted people to the firm; lawyers can be part of a winning team involving work that they’re interested in. Industry groups have a variety of roles within them and it’s important to focus on engagement and motivation of the team. Lawyers must know what they’re accountable for and how they can help to develop and enhance what they want to do. If we want to build true traction, we must build the organisation around it. Frameworks have to be meaningful and this comes from recruitment, training and internal management.

 

The following quote was cited in the media around the time that TLT was created regarding competition in the Bristol and south-west area. How do you respond to that, 14 years on?

“I wish them every success with the merger but it is hard to see where the synergy is going to come from to create any threat to the leading firms in Osborne Clarke and Burges Salmon.”

At the time, there was a misunderstanding in the industry and the area of what we were creating. We were never about following or competing in an already-congested market. We wanted to do something different. Both regionally and nationally, we are a competitor for those firms and I think our results speak for themselves. We were very small at the start and we have built a law firm from that base. To do so in that short time to TLT’s level has few comparisons.

 

What are your own personal goals and targets for the next few years, David? Where do you see TLT going in that time?

TLT has been built by many people and continues to develop. I think we will see more of the same; a growing firm winning greater market share by virtue of its specialism. We will stay alive to change.

Personally, there are lots of opportunities for me and much more to do both collectively and by me. I am never complacent. There are numerous challenges from other law firms and new entrants; existing law firms can still be new entrants, starting from a different position and they adapt to win work.

 

What are you most proud of so far from your time with TLT?

The fact that we have achieved recognition for the expertise of our people within the firm. Our talent programme produces quality equity partners. The job is never finished and is a continuous process but I am certainly extremely proud of our people development so far.

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Find out more about TLT at: www.tltsolicitors.com