Ex-City lawyer sets up his own firm for startups
Alex McPherson trained at Freshfields and worked at Hogan Lovells until he was 6yrs’ PQE. He left to co-found his own law firm, Ignition Law and accountancy firm Ignition Financial, which specialise in advising startups and entrepreneurs.
mtl: Hi Alex, please can you tell us about your working life before Ignition Law?
Alex: I trained at Freshfields, including secondments to Goldman Sachs, Tesco and a corporate seat in Budapest, which were all eye-opening experiences and gave me an insight into my options ahead, applying law in a commercial way. I knew from early on that I wanted to do private M&A and corporate law. On qualification, I moved fairly swiftly to a US firm, where I had great work, autonomy, responsibility, a big salary uplift and a small, fun team.
After I joined, the firm merged with Lovells, creating Hogan Lovells. I have huge respect for Hogan Lovells, Freshfields and City law and their talented teams; I still have plenty of role models who are really kind and support us as well as offering advice. I just, however, felt more comfortable in a smaller environment working more directly with clients for the long term. I did appreciate the technical training of a large firm and the quality of the work; post-merger I was able to work with UK and US lawyers in particular, which I really enjoyed.
During my time as a Senior Associate at Hogan Lovells, I gravitated to the smaller, start-up, scale-up and university spin-out clients with lower budgets. After asking around, I realised that start-ups want cost transparency and clear estimates on time, which isn’t always what a large firm can offer. At the same time, many mid-level associates were perhaps asking questions around their careers, with concerns around flexible working, pluralist careers (practicing law and perhaps running an SME at the same time) and different ideas around career progression.
mtl: Tell us about Ignition Law…
Alex: It seemed to be an obvious solution to be able to offer lower rates to start-ups and scale-ups for the same standard of work, without being a threat to big City law firms; indeed quite the opposite, to work hand in glove with them, given we are no threat. The plan is for our largest clients to start to out-grow us and build bridges with City firms, and always stay foscussed on what we’re good at (and love) – start-up, scale-up and entrepreneurship.
I envisaged a firm that would only work with start-up and scale-up founders on their early stage scale-up journey and that would also provide lawyers with an opportunity for agile working.
I met my co-founder, David Farquharson, on a stag do of a mutual friend; he was Best Man! He was already a partner in a West End firm with a practice and had the same vision as I did – we realised we had very complimentary skills and outlooks, and that there was an obvious synergy.
I put together a business plan, we each served notice, and then worked 100hr weeks for months! We launched on 1 January 2015, funded by personal loans paid into the business. I believed in our business plan and felt that if it failed I could move into a junior partnership role in a smaller law firm, with valuable experience, so I didn’t see it as a huge risk.
Originally, we did a joint venture with gunnercooke, who helped with the regulatory and back-office requirements, and did a really great job in supporting us, which was a superb synergy. We then launched as our own standalone self-regulated firm in 2017, supported by a very able Operations Director, Credit Controller, Office Manager and operational team. We are growing at a rate of 30% a year.
We are now a team of 35 ex-City lawyers, with half working flexibly around the world and some running their own businesses on the side. We’ve recruited them through networking, clients and friends championing us as well as from Hydrogen and Novo Executive Search, who have been great.
We have two models for lawyers; first, we embrace agile working to empower first class lawyers with top flight backgrounds who perhaps are running businesses, have moved overseas or had families, and felt (wrongly) they couldn’t operate in a more flexible way. Secondly, many of the team operate on an employment basis with excellent careers, responsibility and growth.
We’ve built bridges with the entrepreneurial, start-up and scale-up community and our clients come from many places, including universities, business schools, accelerators, social media and law firms. Entrepreneurs want a good relationship with clear fees. As half our team is agile, we have shrunk costs and hourly rates. We give clear estimates and some fixed products, with weekly updates and real time access to fee narratives in the pipeline. We charge very reasonable rates indeed given our niche and operate at around 40% of our previous firms’ rates.
An average day for me starts very early by reviewing the many emails I’ve had overnight at home. At the tail end of the rush hour I’ll go into our office in Fitzrovia where I’m responsible for looking after clients, and working with the really first class team here as well as now many operational duties too. Although I still do a large amount of fee-earning, I’m more involved in business development and operations this year. We are also building a LawTech career tool as well!
mtl: What have you enjoyed and found challenging so far?
Alex: Working with our clients is very rewarding and fun because they are passionate about what they do and believe in their work; the subject matter of what clients are trying to do is fascinating – from augmented reality swimming goggles, new food and drink technology solutions (including brewing with food waste!), to (quite literally) flying cars, to blockchain and quantum computing solutions.
Many client businesses have huge social value or are cutting edge such as attempting to solve certain types of cancer via technology and data analysis. Our lawyers are also inspiring (as are many of their businesses) and our relationship with them is based on trust, respect and ethics both ways.
The biggest challenge is recruitment and sticking to our guns to find the right colleagues; that can be hard when we are so busy, but culture and a passion for entrepreneurship are really key for us. Coupled to this is the challenge of growing at the right speed and not getting too big (or indeed too big for our boots). We’re trying to keep our feet on the ground, and to stay humble.
One big challenge is trying to recruit a self-starter marketeer with legal sector experience to help us with our brand strategy and growth; we’re on the lookout for this person!
mtl: And your sister business?
Alex: I was at university with Adam Brodie who is an accountant and old friend. It seemed like an obvious idea to start Ignition Financial and work collaboratively, since there were so many synergies for clients with respect to accountancy advice and financial structuring, option schemes, tax incentives etc.
To keep us busy, we’re also building a LawTech tool to try and help empower lawyers (and also our talented non-fee earning colleagues) to build, and grow, their own careers and drive themselves forwards at their own paces!
mtl: Thank you for your time Alex.
2000 - 2003
BA Geography, Oxford
2003 - 2004
2004 - 2005
2008 - 2014
Ignition Law Company Secretarial Services