Legal Business

We’re in control: DACB clears debt as revenue lifts 6% in ‘more difficult’ market

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Financial results 2018/19 DAC Beachcroft

DAC Beachcroft (DACB) has cleared nearly £40m of debt in about four years, providing the icing on a financial cake which has sweetened for a fifth successive year.

Revenue at the firm grew 6% to £243m in the year to 30 April 2019, building on an 11% uptick the previous year, and coupled with a 10% increase in profit to £52m. Profit per equity partner (PEP) similarly increased 7% to about £570,000.

DACB managing partner David Pollitt (pictured) told Legal Business the result was ahead of budget following three strong years previously: ‘For us, revenue growth isn’t the key indicator. What’s key for us, in a market that people are beginning to find a bit more difficult, is that we’ve improved our profit by 10% and we’ve improved our profitability.’

He added: ‘The icing on the cake is that we turned our net debt position into a net cash position, having started last year with £14m net debt and ending up with £1.5m in cash. That swing is the final piece of the jigsaw in our financial resilience, we’re in control of our business.’

Pollitt, who was appointed as the firm’s leader alongside senior partner Virginia Clegg four years ago, said the firm had improved its cash position by being disciplined in collecting money and controlling costs, having previously ‘drifted close to the rocks’.

The firm had still managed to invest, however. It opened new offices in London, Paris and Belfast, and made lateral hires Pollitt admits the firm would unlikely have made a few years ago: for example, former Norton Rose Fulbright head of insurance Liam O’Connell and Chris Wall, who joined as head of banking from Kirkland & Ellis.

Pollitt said it was continuing to invest and was hoping to announce some big team hires in the next few weeks, as well as having further laterals in the pipeline.

Insurance – which accounts for about 60% of the business – had a strong year, with the firm acting for all of the UK’s top ten insurers, while real estate went backwards in revenue terms.

Looking ahead, Pollitt cautioned the market was ‘not as easy as it was a couple of years ago’. The firm was growing and on-budget so far this year but he believed firms which wanted to grow substantially would do so inorganically.

‘Clients, understandably, are saying, “Why should I do that now? Why should I undertake this brand new IT project now? Why should I refinance?” Off the back of all those decisions hangs a lot of legal work, so everyone’s getting thoroughly bored. It seems like we’re in a holding pattern at the moment, I don’t think there will be many firms knocking it out of the park.’

For more about how DACB turned a perilous position around, read The DAC interview: close to the rocks (£)

hamish.mcnicol@legalease.co.uk

Legal Business

The DAC Interview – Close to the rocks

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Interview DAC Beachcroft

Legal Business (LB): You have both been in charge for nearly four years. What are some of the highlights?

David Pollitt (DP), managing partner, DAC Beachcroft: One of the first things we decided was to streamline our governance, which Virginia led on. We wanted to become more corporate, leaner and more efficient in decision-making. But we also wanted to be clear about our purpose, our vision, our principles and our business strategy. It took us some time, probably 12 months.

Legal Business

Ashurst makes up eight in the City amid reduced global round as DAC Beachcroft mints 19, RPC six and TLT four

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Partnership promotions AshurstDAC BeachcroftRPCTLT

Ashurst has promoted 21 partners globally, including eight in London, after a slightly reduced promotion round which saw Australia and the UK pick up the lion’s share of new partners. DAC Beachcroft, meanwhile, promoted 19 to partner in a significantly bolstered global round while RPC minted six in the UK and TLT promoted four.

In London, Ashurst promoted corporate lawyers Braeden Donnelly, Gaby Jones and Aaron Shute. In tax, meanwhile, the firm promoted Tim Gummer and in competition the firm made up Steven Vaz. Tim Edmonds and Nicholas Hilder were also promoted in global markets and projects respectively, while Emma Johnson was made a disputes partner.

The round is good news for the firm’s diversity numbers, as the promotions will see 25% of the firm’s partnership be female as of 1 May when the promotions take effect.

Overall promotion numbers are marginally down on last year, when the firm made up 24 lawyers globally, including nine promoted in the City. Australia made up the majority of this year’s promotions with nine new partner, while one partner apiece went to Germany, France, Hong Kong and UAE.

Ashurst global managing partner Paul Jenkins commented: ‘The firm is delivering an impressive level of performance and this has enabled us to make a good number of promotions across our offices and practices.’

DAC Beachcroft, meanwhile, announced today (30 April) a significantly increased promotion round. Nineteen new partners have been made up at the firm, an increase of 11 from last year. Four of the new partners are in the City, three of which are in insurance litigation, with the fourth in claims solutions. In the regions, the firm made up four lawyers in Leeds, three in Bristol, two in Newcastle and Birmingham and one in Manchester. Abroad, the firm promoted a single lawyer in Dublin, Madrid and Mexico City.

RPC also announced its promotion round today, with six new partners made up in the UK across its London and Bristol offices.

Commercial lawyer Charles Buckworth, IP lawyer Ben Mark, corporate lawyer Peter Sugden, litigator Alan Williams and tax disputes lawyer Robert Waterson were all made up in London. Professional indemnity lawyer, Rachael Healey, was minted in Bristol.

Finally, TLT has made four partner promotions, down from last year’s six. Commercial lawyer Kuldip Dhanoya, regulatory lawyer Duncan Reed, corporate lawyer Nina Searle and housing lawyer Shazia Bashir were all promoted this year.

thomas.alan@legalease.co.uk

Ashurst partner promotions in full:

 

Anita Choi – Corporate, Sydney

James Clarke – Dispute Resolution, Melbourne

Gerrit Clasen – Corporate, Frankfurt

Rebecca Cope – Digital Economy, Sydney

Yvonne Cross – Projects, Dubai

Jacques Dabreteau – Projects, Paris

Madeleine de Garis – Global Loans, Melbourne

Braeden Donnelly – Corporate, London

Tim Edmonds – Global Markets, London

Melissa Fraser – Competition, Sydney

Tim Gummer – Tax, London

Nicholas Hilder – Projects, London

Emma Johnson (née Martin) – Dispute Resolution, London

Gaby Jones – Corporate, London

Caroline Lindsey – Projects, Perth

Dean Moroz – Investment Funds, Hong Kong

Aaron Shute – Corporate, London

Elissa Speight – Employment, Canberra

Julia Sutherland – Employment, Perth

Lynda Tully – Corporate, Melbourne

Steven Vaz – Competition, London

DAC Beachcroft partner promotions in full:

 

Sophie Lawless – Claims Solutions, Birmingham

Kevan Smith – Claims Solutions, Birmingham

Stan Campbell – Real Estate, Bristol

Sara Eaton – Clinical Risk, Bristol

Louise Wiltshire – Healthcare Regulatory, Bristol

Niamh McKeever – Professional Liability, Dublin

Jeremy Bennett – Claims Solutions, Leeds

Shruti Brockett – Business Services, Leeds

Charlotte Le Maire – Claims Solutions, Leeds

Paul McGough – Healthcare Regulatory, Leeds

Sarah Crowther – Insurance Litigation, London

Olu Dansu – Insurance Litigation, London

Andrew Sheppard – Claims Solutions, London

Toby Vallance – Insurance Litigation, London

Pilar Rodríguez – Insurance Litigation, Madrid

Morgan Nash – Claims Solutions, Manchester

Emma Bowens – Claims Solutions, Newcastle

Dawn McIntosh – Clinical Risk, Newcastle

Salvador Enrique Urbano Tejeda – Insurance litigation, Mexico City

RPC partner promotions in full:

 

Charles Buckworth – commercial, London

Ben Mark – intellectual property, London

Peter Sugden – corporate, London

Alan Williams – commercial litigation, London

Robert Waterson – tax disputes, London

Rachel Healey – professional indemnity, Bristol

TLT partner promotions in full:

 

Kuldip Dhanoya – commercial

Duncan Reed – regulatory

Nina Searle – corporate

Shazia Bashir – housing

Legal Business

Clyde & Co, CMS and DAC Beachcroft pick up partners from an ailing Sedgwick

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Strategic recruitment Clyde & CoCMSDAC Beachcroft

As US firm Sedgwick heads towards closure in the New Year, UK-based outfits Clyde & Co,  CMS Cameron McKenna Nabarro Olswang and DAC Beachcroft have profited by picking up a number of partners.

DAC has hired a team comprising two partners and four associates from Sedgwick that will join its London office in January. This includes Mark Kendall, who led Sedgwick’s London international property and casualty team since 2010 and has also headed the firm’s Latin American group since 2014. Kendall’s practice has a strong focus on product recall and liability in sectors including food and pharmaceuticals. DAC confirmed that Kendall ‘shares a number of key clients’ with the firm.

Disputes partner Duncan Strachan will also be joining DAC in the New Year with a practice that centres on litigation defence in Latin American jurisdictions in addition to the UK and Europe. Alongside Strachan and Kendall, four associates and a non-fee earner will be making the switch to DAC.

Helen Faulkner, DAC’s head of insurance, told Legal Business: ‘While there aren’t many insurer clients that we don’t work with, Mark’s team gives us additional traction with some clients. We needed to build our bench strength in London. Mark and Duncan’s collaborative nature fits well with our culture.’

CMS has also tapped Sedgwick’s London office recruiting partner Tristan Hall. Specialising in financial claims and cyber risks, he will quit the US firm after seven years.

Office managing partner Edward Smerdon is now the only London partner whose destination remains unknown.

Meanwhile Clydes is looking to make a major US play, hiring two partners from Sedgwick to its San Francisco office, while discussions to bring in around 20 additional partners are ongoing.

Aside from San Francisco, Clydes is also in discussions with various other Sedgwick partners across the US. The firm will be seeking to build on the opening of its ninth US office in Los Angeles in July.

A spokesperson at the firm said: ‘We are sorry to hear the news of Sedgwick’s closure. We know many of its lawyers and hold them in high regard. In line with our own growth potential in the US, we are in advanced discussions with a number of its insurance partners, predominantly in California, about the possibility of them joining us. It would not be appropriate to comment further while discussions are ongoing.’

tom.baker@legalease.co.uk

Legal Business

Profitability drive sees DAC Beachcroft hike bonuses to incentivise top performers

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Salaries DAC Beachcroft

DAC Beachcroft will reward top-performing partners with more generous bonuses after the top-25 Legal Business 100 firm voted through changes to its remuneration structure.

The national firm has introduced the new bonus scheme with immediate effect following a full governance review, removing a cap on the level of profit going into its merit pool to allow for more flexibility in remuneration.

The change is part of DAC’s new member’s agreement, which follows the consultation process started by senior partner Virginia Clegg and managing partner David Pollitt  when they took over in November 2015.

A newly-established remuneration committee, including Clegg, will make recommendations to the LLP group board on the distribution of the bonuses.
Clegg said the changes ‘will support a more diverse international business operating in a variety of highly competitive environments’.

Partners also agreed to extend the powers of the LLP group board, run by Clegg, and to establish a new group executive role, reporting to Pollitt. A new audit committee will be responsible for financial matters and risk.

The changes also allow for the appointment of a non-member chief executive, although the firm said it is not actively seeking one at the moment.

Reflecting a greater focus of management on profit and reducing debt, profit per equity partner at DAC grew 20% from £358,000 to £432,000 this year, despite subdued revenue growth of 3% to £207m. It has reduced its debt from around £30m in 2015 to £19m since the new management team took over.

The insurance-focused firm is also responding to the need for wider geographic coverage in its core sector through collaboration with international firms.

In January, it signed up to the collaborative insurance alliance Legalign, while in December last year it established associations in Peru and Central America .

marco.cillario@legalbusiness.co.uk

Legal Business

‘Particularly pleasing’: DAC posts 20% rise in PEP despite subdued revenue

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Financial results 2016/17 DAC Beachcroft

DAC Beachcroft‘s profit per equity partner has increased 20% from £358,000 to £432,000, despite subdued revenue growth which the firm attributed to global investments and challenging market conditions over the year.

The firm recorded a 3% revenue rise from £201.6m last financial year to £207m this year.

DAC Beachcroft notably further reduced its debt by £1m to £19m over the period.

In a statement, DAC’s managing partner David Pollitt (pictured) highlighted panel wins for the firm, including RSA, Chubb, BT and Crown Commercial Services, alongside retaining a place on the NHS resolution panel, as contributors to the firm’s growth.

Given the economic climate, Pollitt said that to have achieved all this ‘in a year of challenging market conditions, including Brexit, is particularly pleasing.’

Pollitt said: ‘We have also continued with our investment in international expansion this year with new associations formed in Peru and Central America, as well as being one of the founding members of Legalign Global, an alliance of four of the world’s leading insurance law practices.’

DAC signed up to Legalign in January along with three others: German firm BLD Bach Langheid Dallmayr, US firm Wilson Elser and Australian outfit Wotton + Kearney.

The firm also filed its LLP statements for 2015/16 in January, which showed that turnover rose 1.5% to £201.5m from £198.5m, while profit before tax grew 9.5% from £32.3m to £35.3m.

Meanwhile, as the firm’s average number of employees increased from 2,027 to 2,093, average statutory profit before tax per member increased from £296,000 to £361,000.

Total net debt at year-end fell 18% from £24.6m in 2015, to £20m in 2016, while growth in operating profit grew 10.2% from £33.2m to £36.6m.

In December 2016, DAC strengthened its Latin America presence through insurance associations with Torres Carpio Portocarrero & Richter (TCPR), and BLP in Peru and Central America.

The associations are additions to DAC’s existing presence in Latin America, where the firm has offices in Mexico, Colombia and Chile, a Brazil alliance and a Miami hub.

The new arrangement will see all three firms work together to share best practice and meet mutual clients’ key business needs in Latin America.

kathryn.mccann@legalease.co.uk

Legal Business

Firms including Bond Dickinson, TLT and DAC Beachcroft appointed to local authority framework

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In-house DAC BeachcroftTLTWomble Bond Dickinson

A host of UK firms including Bond Dickinson, TLT and DAC Beachcroft have been appointed to West Yorkshire authorities’ legal framework (WYLAW) for three years.

A total of nineteen law firms have been appointed across ten lots which include childcare law, general litigation, routine property and contracts, commercial and IT. National firms Browne Jacobson, Ward Hadaway and Weightmans also feature on the roster. The last WYLAW review was carried out in June 2013 resulting in a panel which included Eversheds Sutherland and Pinsent Masons.

WYLAW comprises Bradford, Calderdale, Kirklees, Leeds and Wakefield councils, as well as the City of York Council and the West Yorkshire Combined Authority.

The framework term is three years, with an optional further one year extension.

In a statement commenting on the review, Jackie Gray, head of Bond Dickinson’s local government group in Leeds said the appointment was ‘strategically important for the firm and for the Leeds office’ as Bond Dickinson looks to expand its capability in local government work.

Gray added: ‘Having a dedicated local government team means that together with our property, planning, employment, pensions, litigation, corporate and commercial teams in Leeds we have a local responsive team of lawyers who can advise members of WYLAW every step of the way.’

kathryn.mccann@legalease.co.uk

Lots are categorised as (1) childcare law, (2) adult social service and community law, (3) general litigation, (4) routine property, (5) contracts, commercial and IT, (6) highways and environments, (7) major or complex procurements, (8) local government and corporate governance, (9) employment and pensions, (10) public health.

Firms appointed to multiple panels include:

  • Bevan Brittan (lots 1, 2, 3, 5, 6, 7, 8, 9 and 10)
  • Browne Jacobson (lots 1, 2,)
  • Bond Dickinson (lots 3, 4, 5, 6, 7, 9,)
  • Freeths (lots 3, 4, 5, 6, 7, 8, 9)
  • Sheffield City Council (lots 1, 2, 3, 9,)
  • Stephensons Solicitors (lots 1, 2, 3, 4, 9)
  • Ward Hadaway (lots 1, 2, 3, 4, 5, 6, 8, 9, 10)
  • Weightmans (lots 1, 2, 3, 4, 5, 6, 7, 8, 9, 10)
Legal Business

Revolving doors: DAC Beachcroft hires from DWF as Ropes partner quartet leave for Gibson Dunn

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Strategic recruitment DAC BeachcroftGibson, Dunn & CrutcherRopes & Gray

In another active week for lateral hires, firms have expanded their ranks in the UK and internationally. DAC Beachcroft has added to its Manchester office, while ARC Pensions Law, Gibson, Dunn & Crutcher and McDermott Will & Emery have all also made key hires.

Adding to its Manchester-based employment and pensions group, DAC Beachcroft has hired Philip Harman as a partner. Harman, who joined the firm on 3 April, was previously head of DWF’s employment practice.

DAC Beachcroft head of employment and pensions Alex Lock commented: ‘I am delighted to welcome Philip to the firm and we all look forward to working with him. His depth of knowledge and aspirational nature make him a very exciting new addition to our team.’

McDermott has expanded its London restructuring and insolvency practice, hiring Alan Gar from Simmons & Simmons. Gar arrives at McDermott as a partner, bringing with him significant experience in advising financial institutions on restructuring and insolvency matters. Gar’s appointment follows a string of similar hires in the last year, with the firm appointing Piero Carbone, Michael Holter, Gary Howes and Alicia Videon into its corporate and transactional practice.

Head of McDermott’s London office Andrew Vergunst said: ‘His appointment will continue to build upon the positive momentum taking shape in London. Adding another quality lateral will enable us to further expand our client offering.’

ARC Pensions Law has also added depth to its London office by bringing in Gowling WLG’s partner Jane Kola. Kola, who is a specialist in defined contribution pension schemes, joined the firm on 18 April.

Kola said: ‘I’m convinced that the boutique law firm solution is the best for trustee and corporate clients alike, when it comes to specialist services like pensions.’

Elsewhere in the UK, Mishcon de Reya has hired Alessandra Buonfino as head of international development. Buonfino joined the firm this week, after previously acting as the head of GREAT investors programme and deputy director of the department for international trade.

In Hong Kong, Gibson Dunn has hired a four-partner team from Ropes & Gray. Among the partners moving to Gibson Dunn are the firm’s Hong Kong managing partner Paul Boltz. Joining him are private equity partners Scott Jalowayski and Brian Schwarzwalder and banking partner Michael Nicklin.

tom.baker@legalease.co.uk

Legal Business

DAC Beachcroft signs up to new Legalign alliance to provide global client reach

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DAC Beachcroft

DAC Beachcroft has signed up to a collaborative new insurance alliance, Legalign, along with three others: German firm BLD Bach Langheid Dallmayr, US firm Wilson Elser and Australian outfit Wotton + Kearney.

According to DAC, the model is designed to deliver legal services seamlessly across jurisdictions in three primary areas: insurance/reinsurance coverage, insurance/reinsurance defence and insurance regulatory and compliance. The alliance will comprise more than 2,000 lawyers across the four firms.

DAC managing partner David Pollitt (pictured) said it gives the firm an even bigger global footprint.

He added: ‘The synergies between our respective clients, our service capabilities and our cultures are genuinely noteworthy. That makes the opportunity to join forces an exciting one both for us and for our clients, many of which will feel the benefit of this comprehensive new global offering with almost immediate effect. We can’t wait to continue to build on what we have already achieved.’

DAC filed its LLP’s for 2015/16 last week, which showed turnover increased by 1.5% to £201.5m from £198.5m, while profit before tax increased 9.5% from £32.3m to £35.3m. Meanwhile, as the average number of employees increased from 2,027 to 2,093, average statutory profit before tax per member increased from £296,000 to £361,000.

Total net debt at year-end was reduced by 18% from £24.6m in 2015 to £20m in 2016 while growth in operating profit increased 10.2% from £33.2m to £36.6m.

In December DAC strengthened its presence in Latin America with insurance associations with Torres Carpio Portocarrero & Richter (TCPR) and BLP in Peru and Central America.

The associations are in addition to DAC’s existing presence in Latin America, where the firm has offices in Mexico, Colombia and Chile, as well as an alliance in Brazil and a hub in Miami. The arrangement will see all three firms work together to share best practice and meet mutual clients’ key business needs in Latin America.

kathryn.mccann@legalease.co.uk