Knights chief David Beech on culture first, results second

David Beech thought he'd left law for good.

After more than 15 years as a corporate lawyer in a traditional law firm, he spent six years in private equity and had little intention of returning. But the deregulation of the sector changed everything.

Spotting an opportunity to build a law firm differently, he bought Midlands-based Knights in 2012 and set out to create what has become one of the UK's biggest regional law firms and a £200 million business listed on the London Stock Exchange.

Speaking on The Non-Billable Podcast, the Knights chief executive says that experience outside private practice hugely influenced how he thinks about running a law firm.

Two beliefs sit at the heart of Beech's philosophy. The first is that lawyers should not also automatically be expected to own and run the businesses they work in. The second is a relentless focus on two things: people and cash.

Cash generation, in particular, is a big focus. Beech says he spends much of his time thinking about work in progress, debtor days and cash conversion, arguing that staying on top of cash gives businesses the flexibility to keep investing whatever the wider market looks like. "Cash is the oxygen and blood supply of business," he says.

That’s not just lip service either. Knights reported debtor days of 30 in its latest results, a number Beech proudly says is market-leading and well below the 75-day average across the UK's top 100 law firms.

That approach has underpinned Knights' growth through 28 acquisitions since Beech bought the firm in 2012. Its biggest deal yet could now be on the horizon, with the firm announcing earlier this year that it was in talks to acquire £42 million revenue regional firm Moore Barlow.

Rethinking law firm ownership

Drawing on his experience of private equity backing and listing Knights on AIM in 2018, he argues that traditional partnerships and outside investors are often working to fundamentally different objectives. Partnerships are built to distribute profits, while investors want businesses to retain capital and compound growth. "They don't join up," he says.

More than a decade after buying what was then a £9 million law firm, Beech remains convinced the biggest differentiator when it comes to running a successful law firm is culture. "If people are feeling good, feeling safe, feeling motivated, feeling inspired," he says, "the results will follow."

Listen to the full conversation with David Beech on The Non-Bilable Podcast.