Hello Rainmakers,
A lively one for you today. James Sheridan of Knights PLC is putting his experience as a corporate lawyer to the expansionist strategy of the firm he joined in 2018.
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As Chief M&A Officer of Knights, James Sheridan spends his many of his days weighing up whether the acquisitive law firm should buy this practice or that.
I ask him what the decision making process is and in response get a surprising question back at me.
“Have you ever read a book called Legacy about the philosophy behind the New Zealand All Blacks?”
I’m aware of it, I say.
“Right. So they have a very highly developed ‘no dickheads’ policy. It doesn’t matter how good you are at rugby, if you fall into that category, you ain’t pulling the black jersey on. We have a similar kind of thing.”
The Maori term is Whānau, and basically means that character matters more than individual talent. The team environment rejects ego and entitlement to build tight collective unity.
The sporting metaphor isn’t entirely a surprise. Sheridan served on the board at Lancashire County Cricket Club for over seven years and has been deeply involved in the Manchester Super Giants franchise, which is part of the newish short-form concept The Hundred.
But it’s a fitting thought as England’s rugby team get set to face New Zealand at Twickenham later this month, and as Knights has led the news recently with another eye-catching acquisition. This time of the commercial and private wealth practices of South East firm Moore Barlow, which has brought around 160 lawyers into the group.
It’s Sheridan’s role to lead the acquisition programme and the wider investor relations activity, while also providing leadership across the corporate service lines within Client Services. Part of the job is identifying high-quality acquisition opportunities, building relationships with business owners and guiding transactions from initial engagement through evaluation, execution and integration.
At some point, presumably, he works out if the intended target is a dickhead or not.
“We’ve seen some fantastic businesses on paper, but the people have been table-banging egotists. David Beech (Knights CEO) and I have walked out of those meetings, just looked at each other and gone, ‘we can’t do that,’ and you have to move on.”
One of the other factors he’s observed is legal practices spending a fortune on technology, but failing to integrate it properly, or not bringing the team with them.
“Often they’ve spent an awful lot of money, and when we’ve got hold of it, there’s been four different systems that don’t speak to each other, and they’ve got whizz bang things in them, but nobody knows how to use it. And the people at the coalface have said to us, ‘Oh, thank goodness we’re now on your one platform integrated system. It’s so much simpler than our previous one with four’.
“Some interesting stuff is starting to come into our industry, but it’s only really right at the start. So if I meet a business that says they are the technological innovators of the legal sector, I’m interested because I want to learn, but I’m a bit sceptical from an investment perspective because the software and the tools are not really that good yet. So I think there’s a danger of people going bleeding edge and burning through a lot of cash.”
A corporate finance professional since 1995, he built a reputation in the North West on many mid-market transactions. Having joined, led, and built up the Manchester firm Turner Parkinson, he then subsequently sold it to Knights in 2018, where he embarked on his new role.
You could says he brings the combined perspective of an adviser, business owner and acquirer into the one role. He says his breadth of experience gives him a distinctive understanding of what makes a business valuable, what motivates its owners and what is required to create confidence in its future.
“It’s great fun because I’m learning new skills all the time,” he says, “and I’m applying things that I learned as an advisor, but as a principal now. So I really enjoy that. I’ve also learned in real life what all my old clients used to say to me: that the hard work starts on completion day, and the success or not success of what we’re doing is all about how we integrate the businesses, and how we get them to perform together. How we drive change, how we get people facing in the same direction.
“In these people businesses, you have to win the trust, confidence, hearts and minds of the people who, let’s face it, at the start don’t know you from Adam.
“You know, I walk into a room and stand up in front of however many people in a business and go, ‘Hi, we’ve just bought your business.’ They don’t know if they can trust me or they can’t. So we have to we have to win people’s trust, and you know we do that by being honest, straightforward people and showing them the rest of our business and how it’s worked.”
He says he’s had a lot of fun applying the very advice he used to help other people with, most pointedly, about how much hard work it’s to successfully integrate after a deal.
He also says there’s still a lot to go at. Though Knights has bought into new areas of professional services, the rapid consolidation of the legal market has focused minds at building a firm at scale.
“We’ve hit a rich seam with that, and I think we didn’t expect there to be as much opportunity as there has been, and there will continue to be because we’ve only just got started really.
“We won’t operate in London but it’s still a £3.8 billion industry that’s very fragmented.”
The most recent £27m deal to buy Moore Barlow’s commercial and private wealth service lines, with its personal injury, clinical negligence and Court of Protection divisions being sold separately ahead of completion.
Moore Barlow, formed in 2020 through the merger of Moore Blatch and Barlow Robbins, operates across Hampshire, Surrey and the wider South East, and traces its roots back more than 220 years.
The deal is also structured over three years with £18m paid upfront and the rest in instalments, though with revenues of £30m that shouldn’t be a stretch.
Within Client Services at the firm, Sheridan leads the continued development of the corporate service lines, helping strengthen collaboration, performance and connectivity across disciplines.
That also covers the possibilities of AI to the business, not just integrating legacy AI systems.
“So I think you fall into one or two camps of that. It’s either a threat, or an opportunity, and for us it’s a massive opportunity in our corporate environment. We have the financial firepower to make significant investments in that kind of thing, which in partnerships they often don’t because the partners take the cash out,” he says.
Another part of his role is stakeholder engagement, and is a leading voice for the business to investors. As a shareholder himself he has an obvious eye on the publicly traded share price, but he gives off the vibe that he doesn’t obsess over it.
At a market cap of £142m, everything he says suggests he thinks it’s undervalued. “I think it’s a tough environment to be in, but we’re a relatively small listed company. I think the people that remain invested in UK equities are focused more on large companies. But it’s all cyclical. That will come out in the wash, and at some point the market will recognise the true value of our business.”
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