A major law firm has become the first entirely owned by its employees after its founder and other equity partners agreed to sell the business to an Employee Ownership Trust.
Patrick Allen founded Hodge Jones & Allen over 40 years ago with Henry Hodge and Peter Jones to offer legal services to those in need and to provide access to justice.
The firm, which has an annual turnover in excess of £17 million, has represented victims in many high profile cases including the Grenfell fire, The Kings Cross fire and the Marchioness ferry disaster. The firm also represented Neville Lawrence, the father of Stephen Lawrence, who was murdered in a racist attack.
Patrick, who is the sole remaining founding partner, decided to create the EOT so that the ethos of the firm of helping people would continue and all of the loyal staff at the firm could benefit.
The move is part of a succession plan to enable Patrick to take a less active role in the business. The EOT is a similar model to that of John Lewis in that it enables all employees to become beneficiaries of the firm. All 230 employees will reap benefits of being part of an EOT structure from day one. One benefit is the firm is able to make tax free distributions to its employees up to a maximum of £3,600 per annum per employee.
Hodge Jones & Allen Solicitors Limited will trade and run in the same way as Hodge Jones & Allen Solicitors LLP, but 100 per cent of the shares of the new limited company will be owned by the Trust rather than the current members of the LLP. Senior Partner and majority owner Patrick Allen will act as trustee and Kingsley Tedder becoming an independent external trustee for corporate governance and compliance.
There will be no day-to-day change in the running or operation of the firm. As part of its long-term strategy, HJA considered all the options available for succession planning, but opted for the EOT approach to safeguard its future whilst maintaining its culture. Figures from the Employee Ownership Association show how employee-owned businesses outperform the market in terms of profitability, productivity and staff engagement.
Patrick, who will remain as Senior Partner, said: “Becoming employee owned reflects the people-first entrepreneurial spirit that has been the backbone of HJA since 1977. It provides continuity for our partners and staff, and therefore our clients. It is the perfect model for a firm like ours.
“I wanted to ensure that the firm could continue to grow in the same way as I intended when I founded it over 40 years ago. We have a fantastic team and we help people who may not always be able to access advice and redress. I see this as a way in which my vision can go forward and thrive into the future.”
The EOT is the latest innovative move by the company with Patrick remaining as a Senior Partner, to take the firm forward and grow.
Patrick looked at all potential options for the firm, but decided an EOT was the best choice for the long term growth of the business whilst maintaining the core ethos and culture.
Patrick has supported the firm for over 40 years and this move shows his commitment and love for the company he founded and a desire to support continued growth and investment into the firm.
Under his stewardship the company has grown from a small practice on Camden High Street, in London, to the firm it is today, helping clients nationwide access a diverse range of legal specialists and leaders in their field.
Creating the EOT was the best way of ensuring Patrick’s legacy and of safeguarding the firm whilst making sure that the ethos and values remain intact.
Now the firm can better plan for the future and continue to grow and innovate for the benefit of all staff and clients.
Deb Oxley, chief executive of the Employee Ownership Association, said: “We congratulate Hodge Jones Allen on its transition to 100% employee ownership.
“This is a pioneering move in the legal sector, at a time when many similar partnerships are challenged by the succession dilemma of securing the future of an LLP-structured firm. By widening ownership of the business to all of its employees via an EOT, Hodge Jones Allen is securing the future of the business, including its ethos and values, whilst engaging all employees in its vision and future success.”