SEVEN years of aggressive expansion firmly established HHG Legal Group in the Perth legal scene, but the firm says it’s in a better place now after two years of consolidation.
The firm’s growth from a five-man operation based in Albany to a team of more than 70 with a head office in Perth earned it the runner-up title in WA Business News’ 2010 Rising Star Awards.
Two years on, however, director Simon Creek concedes bigger is not always better, for while the rapid expansion enabled HHG to break into the Perth market and establish itself as a mid-sized firm, inefficiencies had crept into the business.
“We knew we had gone from being a very small firm to a mid-sized firm very fast and we were aware that our systems and procedures hadn’t caught up – we simply hadn’t had the time. (But) we have had time over the last two years to polish those things up,” Mr Creek said.
“Polishing up” has meant deliberately curbing growth and instead looking to drive up profits from existing turnover – a focus Mr Creek said had been enormously beneficial.
The firm has introduced new technology in order to cut support staff, but employ more solicitors. In 2010, HHG had an average of one support staff member to every solicitor – the ratio has now changed to one support staff to every four or five solicitors, which Mr Creek said was more what it should be.
So while staff numbers have decreased from more than 70 to about 65, the addition of more fee-earners increased the business’ profits.
“Turnover has increased, but profits have increased more,” Mr Creek told WA Business News.
Having come out of two years of consolidation, HHG is now considering its next move.
Mr Creek is faced with three options: embark on another growth phase; join a network of Australian law firms to give HHG an east coast affiliation; or get involved in South-East Asia.
HHG’s focus is on the small to medium-sized enterprise market and it aims for an equal ratio of private business to government and commercial cases.
He said HHG had established a niche separate from the market space where full-service firms such as Jackson McDonald Lawyers or Lavan Legal operated.
“Neither of them does family law, workplace relations, wills and estate planning like we do; – we are out of the smaller firms’ space but we don’t want to go into the larger firms’ space either. We’re very happy staying in the middle,” Mr Creek said.
But he said there was still potential for growth given that both Jackson McDonald and Lavan had an employee base larger than 200.
HHG would not rule out further acquisitions – it took over Wheatleys Legal in 2007 – but creating affiliations with other firms nationwide was an attractive option that would enable the firm to benchmark against peers.
Mr Creek said HHG also had a lot of business where clients had interests in South-East Asia – such as family law cases and commercial property – which would make having an affiliation there beneficial.
“We’re very excited about what’s going on in South-East Asia ... we’re being asked more and more about firms in Asia that we could refer clients to,” he said.
Mr Creek said he thought demand was due to increased migration and commercial clients acquiring more assets in Asia.
While the company decided which route to take, Mr Creek said the enduring focus needed to remain on providing something different, and doing it well by placing emphasis on being energetic, dynamic and innovative.
“Some of the most exciting resolutions to legal problems come from creativity and innovation. I guess people in other professions would just call that commercial thinking,” Mr Creek said.
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