Legal Business

Thrusting DWF primed for largest law firm listing yet but eyebrows raised at touted price

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Innovation DWF

Thrusting national operator DWF is gearing up to be the largest UK firm float yet with a London Stock Exchange listing later this year. The top 25 UK law firm initially went into standard non-denial mode today (15 June) over reports it is aiming to float later this year with a supposed price tag of £1bn.

The presence of City PR shop Finsbury, which was today distributing ‘background briefing points’, signalled that DWF was being positioned for an offering. Within an hour the firm anyway changed its public position to issue a statement (see below).

Such a valuation would raise eyebrows in the profession, given DWF’s 2016/17 revenue of £199.3m, with profit last year slightly down to £43.5m from £45.5m. Profit per equity partner (PEP) fell 6% to £300,000. Even valuing the business at a generous 15 times earnings would suggest a valuation of well under £700m. Standard valuation models for such a business would be in the £400m-£600m region.

The 1,200-lawyer practice had 70 equity partners last year, with a further 154 salaried partners. Turnover was up about 8%, though a float would also focus attention on the firm’s borrowings, which have increased in recent years to currently exceed £40m in bank debt, a relatively high level for a law firm. A note in the firm’s latest annual report says the firm held discussions with its banks about future borrowing requirements and while no formal bank facility documentation had been completed, the lenders intended to make these available.

DWF’s recent history has been marked by a spate of office openings in Europe, North America and Asia-Pacific, as well as the acquisitions of legal cost business NeoLaw last June and claims management firm Triton Global.

It also brought in the man who spearheaded DLA Piper’s meteoric rise from regional upstart to global giant, Sir Nigel Knowles, as chair in September last year. DWF is seen as a firm which has long modeled itself on Knowles’ former parish. Knowles was also known to have been intent on taking the legacy DLA public before the firm instead opted for the three-way US merger that created DLA Piper.

One former partner expressed surprise at the move and the touted £1bn market capitalisation, noting relatively low profitability for a top 50 UK law firm. ‘I am sitting here struggling to understand what the hell is going on,’ he added: ‘We looked at a flotation three years ago and decided against it, now they’ve obviously had a change of heart. If [chief executive Andrew] Leaitherland was playing poker, he’s just gone all in.’

Another former DWF veteran noted previous discussions around attracting private equity investment. He commented: ‘It’s very efficiently managed but debt is an issue. They have a consistent profitability track record but I’m not sure the international offices have been working as well yet.’ He noted that a float could be used to pay down debt, ‘wiping the slate clean’.

DWF’s IPO would be the sixth UK float, and the largest by some distance since Slater & Gordon’s troublesome listing on the Australian stock exchange more than a decade ago.

DWF’s statement: ‘To enable us to deliver on our strategy and for us to better serve our clients through an increasingly international and differentiated offering, we have plans to increase our investment in information technology and connected services. The current corporate structure of our business continues to work very well and has enabled us to deliver our key business objectives with record growth this year – but as a business which is committed to “doings things differently” it is also important to consider alternative structures which can set us apart from other legal businesses. To that end, we have been considering a number of strategic options for our business, including the possibility of an IPO on the London Stock Exchange. If we were to proceed with an IPO, we believe that it would enable us to achieve our strategic objectives more quickly, while also enhancing our ability to attract and retain the best talent and to incentivise our people by aligning them through offering ownership within the business. We are focused on an IPO. However, a number of options are available to us, and we can still continue to build on our success to date, with the support of our clients, under our current structure. For the time being, it is very much business as usual for us, our clients and our business partners as we continue to focus on delivering the excellent service which our clients have come to expect of us.’

hamish.mcnicol@legalbusiness.co.uk

Legal Business

Revolving Doors: DWF and Fladgate bolster City recruitment as Ashurst goes large internationally

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Strategic recruitment AshurstDWFFladgate

City recruitment was strong last week as DWF and Fladgate followed headline laterals at White & Case and Ashurst with London plays. International recruitment, meanwhile, continued a strong run of form.

DWF added to its City insurance practice with the hire of Iftikhar Ali from Simmons & Simmons, where he led the construction all risks practice. Ali will work on construction, power and engineering claims, and has represented clients including Chubb, Aviva, and Zurich.

Commenting on the hire, DWF partner Kieran Walshe said: ‘Iftikhar brings a breadth of expertise on managing coverage and liability claims all around the world and will provide a particular strength in construction market and sector expertise when working alongside our UAE and Latin America offices.’

Meanwhile, Fladgate also made moves in the City, with the hire of David Breslin as a partner to the firm’s dispute resolution team. Breslin joins from Gowling WLG, where he led the international arbitration and insurance teams, having previously been head of dispute resolution at legacy Lawrence Graham.

Fladgate chairman Richard Reuben commented: ‘David’s appointment reflects our continued commitment to building strength in depth in our core practices and to further developing our specialist capabilities.’

Further afield moves continued apace, led by Ashurst’s array of international moves. In Germany, the firm appointed Nicolas Nohlen as a partner to its dispute resolution practice in Frankfurt, having joined from Hengeler Mueller. Nohlen’s work covers commercial litigation, arbitration and alternative dispute resolution, with particular regard to corporate, capital market and commercial law disputes.

In neighbouring France, Ashurst made two hires to its Paris office with the appointment of Noam Ankri and Vincent Trevisani as partners to its corporate team. Ankri joins from the London office of DLA Piper, having begun his career at Willkie Farr & Gallagher in Paris in 2001. Trevisani joins from Watson Farley & Williams, where he had been a partner since 2012.

Ashurst rounded off its international shopping spree with the hire of partners Alex Guy and Dan Brown to the firm’s projects practice in Brisbane. The pair cover sectors ranging from transportation and infrastructure to renewable and conventional energy projects.

Returning to Europe, King & Spalding hired tax partner Jonathan Ivinson in its Geneva office from Akin Gump Strauss Hauer & Feld, the second partner to join that office this year.

Across the Atlantic in the US, Cooley added Eric Kuwana to its securities and litigation practice. Kuwana will be based in Washington and New York, and joins from Katten Muchin Roseman where he was partner and co-chair of the firm’s securities litigation and enforcement practice.

Rounding off the international moves, Orrick Herrington & Sutcliffe announced the hire of Geoff Willard to the firm’s technology companies group as partner in Washington. Willard acts as a strategic adviser to technology and other growth companies, and focuses on equity investments, acquisitions and joint ventures.

thomas.alan@legalbusiness.co.uk

Legal Business

Revolving Doors: City laterals pick up pace as Baker McKenzie and DWF make moves while Reed Smith expands in the US

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Strategic recruitment Baker McKenzieDWFReed Smith

City recruitment kept pace last week as a trio of firms made City hires, led by Baker McKenzie’s corporate hire from Clifford Chance, while Reed Smith made big plays in the US.

Baker McKenzie added to its London bench with the hire of Kathy Honeywood to its energy, mining and industrials practice. Honeywood joins from Magic Circle firm Clifford Chance, bringing experience in M&A transactions, corporate finance and joint ventures.

Baker McKenzie London managing partner Alex Chadwick (pictured) commented: ‘With almost 20 years of M&A experience and strong client relationships, Kathy is well placed to enhance our Corporate EMI practice and to capitalise on the huge opportunities in the energy industry. This plays straight into our strategy of bolstering and growing our key transactional practices in London.’

Meanwhile, London independent Wedlake Bell bolstered its corporate and capital markets practice with two senior hires from Watson Farley & Williams in Nigel Taylor and Martin Thomas. Taylor specialises in private equity transactions, M&A and corporate structuring while Thomas works on IPOs and secondary offerings of equity and debt on the London capital markets.

Martin Arnold, managing partner of Wedlake Bell, said: ‘They will add real value and depth to our thriving corporate and capital markets practice. These appointments reflect the firm’s commitment to growth and the further strengthening of our specialist offering in key sectors to meet client demand.’

DWF also made hires in the City, bolstering its real estate arm with the hire of Andrew Edwards from American firm Greenberg Traurig. Edwards will work with DWF’s regional clients and particularly private equity houses, fund managers, property companies and high net worth individuals.

Elsewhere in the UK, Womble Bond Dickinson (WBD) recruited competition partner Andrij Jurkiw from Mishcon de Reya, where he had been since 2013 and served as head of competition. Jurkiw will join WBD in Bristol, and focuses on UK & EU competition law, with particular experience in food, building materials, pharma and real estate.

Meanwhile in the US, Reed Smith made a spate of hires which brought five new partners to its Washington, Austin and New York offices, all from Norton Rose Fulbright.

In Washington, the firm landed Frederick Robinson and Lesley Reynolds in its litigation practice. Further south in Texas, the firm recruited Ben Koplin and Jeff Layne. Layne has experience in government and internal investigations and related litigation, representing health care and life sciences companies. Koplin, meanwhile, focuses on health care compliance and the regulation of health care providers. The pair’s arrival sees Reed Smith add a new office in Austin.

Rounding off the hires, Reed Smith brought in Cori Goldberg in New York. Goldberg has experience handling Food and Drug Administration (FDA) and regulatory compliance issues, as well as government and internal investigations.

Commenting on all the hires, co-chair of the firm’s life sciences group Scot Hasselman said: ‘This is a fantastic group of lawyers. It will bring together two historical health care and life sciences practices with the accompanying relationships and experience.’

thomas.alan@legalease.co.uk

Legal Business

Financials 2017/18: CMS claims 25% profit hike post-merger as DWF’s top line grows 23%

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Financial results 2017 CMS UKDWF

CMS UK has today (20 November) claimed profits have grown 25% in the six months since its three-way merger with Nabarro and Olswang. Meanwhile, DWF’s unrelenting push internationally has seen turnover grow 23% at the H1 2017/18 stage.

Following its tripartite merger on 1 May this year, CMS said H1 turnover for its UK business was more than 50% of its full-year budget, at £253m.

However, the firm did not provide an actual figure for net profit, save to comment it was up 25% on the figure last year. This renders a like-for-like comparison meaningless, as it includes combined profit with legacy firms Nabarro and Olswang, with Olswang not providing H1 results in 2016.

The firm said disputes and TMT have been key drivers of the firm’s performance this year, while it brought about significant savings by subletting most of legacy Nabarro and Olswang former premises after all staff moved into CMS UK’s offices at Cannon Place. The three firms also cut 300 support staff roles in the Spring ahead of the merger.

Managing partner Stephen Millar described the latest financial results as ‘fantastic’, saying it was ‘a direct consequence of the momentum and confidence we are experiencing throughout the business’.

‘We have been working extremely hard on integration, and although there is more to be done, we are in a strong position. The fundamental systems integration is in place and strong working relationships have formed across the firm.’

Speaking to Legal Business in the autumn , Millar said financial measures were ‘crude but important’ in assessing the success of the firm in the first 18 months after the merger and noted the firm was performing ‘ahead of expectations’.

Elsewhere today, top 25 firm DWF has also posted strong results for H1 2017/18, with revenue up 23% and net profit increasing by ‘circa 33%’. Turnover for H1 2017/18 was £113.5m in a period marked by a spate of office openings in Europe, North America and Asia Pacific.

‘Particularly in a year that has already seen us put a significant amount of investment into our expansion, this is a good set of results which indicate there is huge potential for us to achieve further growth through the rest of the year,’ said the firm’s managing partner and chief executive Andrew Leaitherland.

Most recently DWF opened in Milan with a 16-strong team hire from local independent Pavia & Ansaldo. The firm also launched in Australia last month  and in Singapore in July with a four-lawyer team from Eversheds Sutherland.

In July the firm entered South America through a number of associations   in Argentina, Panama and Colombia.

marco.cillario@legalbusiness.co.uk

Legal Business

DWF adds to senior ranks once more as Addleshaws heavyweight Carpenter jumps ship

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Strategic recruitment DWF

A month after recruiting former DLA Piper leader Sir Nigel Knowles, DWF has brought in a senior hand again with the hire of Addleshaw Goddard heavyweight Andrew Carpenter, who leaves a year after losing a contested election for senior partner .

Carpenter, who was latterly international divisional managing partner for Addleshaws after leading its private equity practice joins Mel Sims, formerly at DLA Piper, to beef up DWF’s London corporate offering. The hires follow the appointment of London head of corporate Matthew Doughty from Squire Patton Boggs in June 2016 and partner Alistair Hogarth from PwC Legal earlier this year.

Carpenter joined Addleshaws more than ten years ago from O’Melveny & Myers and focuses on domestic and international M&A transactions and mid-market private equity across manufacturing, healthcare, transport and infrastructure and financial services. In his role as international divisional managing partner, he oversaw the expansion of the firm’s Middle East and Asia-Pacific presence.

Commenting on his appointment, Carpenter said DWF has established a leading private equity practice in the North West. ‘Leveraging this existing platform, and taking advantage of the business’s sizable depth of resource across the UK in complementary practices such as banking, there is a real opportunity to now accelerate the development of the City practice.’

Sims, who was based in London and latterly Qatar for DLA, has advised on the £200m investment by Advent International in the Towergate Group and simultaneous refinancing of the group, including a £550m bond issue.

Addleshaws experienced a tough financial year for 2016/17 in what the firm’s managing partner John Joyce told Legal Business was a ‘a rollercoaster ride’.  Profit per equity partner at the firm dropped 26% to £504,000, while turnover was down 2% to £197.8m.

kathryn.mccann@legalease.co.uk

Legal Business

Australia latest stop on DWF’s belated world tour as it announces local tie-up

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Australia DWF

In contrast to the majority of the top 25 of the Legal Business 100, DWF has been a latecomer to well-served international markets but it has nonetheless continued its rapid international push by securing an exclusive association with a six-partner outfit in another market long familiar with English arrivals – Australia. The deal, which the firm says ‘will shortly lead to merger’, follows its launch in Singapore in June.

As part of the deal, DWF will take on six partners and 20 associates based in Melbourne and Brisbane specialising in insurance, occupational health and safety and industrial relations as well as a commercial practice focused mainly on the construction, hospitality and real estate sectors. The practice, which was originally formed eight years ago as boutique insurance firm MVM Legal, is run by partners Jamie McPherson and Damien van Brunschot and prior to the deal traded as part of the international network of firms Kaden Boriss.

Commenting on the deal Andrew Leaitherland, managing partner and CEO of DWF, said that Australia was an influential and integral part of Asia’s growing economic and political influence and core to DWF’s strategy. ‘We already have a strong foothold in the region, and the time is right to build on that as part of a wider Asia-Pacific strategy.’

The move in Australia is further evidence of DWF’s recent aggressive international expansion. In June the firm broke into Asia after taking on a four-lawyer Singapore team who were formerly at Eversheds Sutherland, and just a month later entered the South American legal market with new associations in Argentina, Panama and Columbia.

April saw DWF set up office in Berlin by hiring DLA Piper’s financial services partner Nina Siedler and real estate partner Irene Schmid alongside Wolfgang Richter, who joined DWF Germany following the firm’s 2016 merger with BridgehouseLaw.

In January, DWF opened a Paris office after acquiring four-partner local firm Heenan Paris as well as acquiring UK-based claims manager Triton out of administration. The buyout brought in Heenan’s expertise in corporate, private equity, commercial, intellectual property/IT and litigation.

kathryn.mccann@legalease.co.uk

Legal Business

He’s back – DWF signs up Sir Nigel Knowles as chair in rare c-suite shuffle for the profession

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Leadership DLA PiperDWF

It remains extremely rare for law firm leaders to re-emerge at another practice, but then Sir Nigel Knowles has always been one to do things his own way in more than 30 years in the profession.

Knowles today (7 September) announced his return to law after retiring last year from the global giant DLA Piper to become chair of DWF, an ambitious UK player that has long modelled itself on Knowles’ former parish.

Knowles, who spearheaded DLA’s meteoric yet unlikely rise from regional upstart to become one of the world’s largest law firms, assumed the position on 1 September to replace long-serving Alan Benzie as DWF’s chair. Though it remains a part-time appointment, Knowles will sit on DWF’s board.

Knowles told Legal Business: ‘My enthusiasm and desire to contribute to an overall achievement have not diminished. But the strategy of DWF is not the strategy of DLA Piper. I am not here to turn DWF into the next DLA. DWF has a very different view of life, it’s come through the middle of the financial crisis with lots of great people and there’s a lot to achieve.’

DWF chief executive and managing partner Andrew Leaitherland described Knowles’ appointment as ‘the perfect succession’.

‘One of the key attractions with Nigel is his ability to give strategic insight and input,’ Leaitherland added. ‘Not just his 30-plus years’ experience in the legal sector, but also the things he’s been doing since then in terms of legal technology. Having a chairman who can be a mentor and someone you learn from is absolutely valuable. He’s not just had the t-shirt, he’s worn it several times.’

Knowles said that talks with Leaitherland about a return to legal practice began with ‘good constructive discussions’ in the last six months.

A member of the ultra-select club of commercial lawyers to have received a knighthood, Knowles was a key figure in DLA securing a transatlantic tie-up in 2005 with US firms Piper Rudnick and Gray Cary Ware & Freidenrich.

In his time the iconoclastic Knowles built a reputation as one of the most forward-thinking and admired law firm leaders in the UK, a reputation that saw him in 2015 handed the outstanding individual achievement award to mark the 25th year anniversary of Legal Business.

Knowles stepped down as head of DLA’s international arm at the end of 2014 with Simon Levine succeeding him as co-chief executive.

DWF, meanwhile, has been in acquisition mode in 2017. In June 2017, the 1,250-lawyer firm picked up legal costs business NeoLaw to add to its 36-strong in-house costs department, and also launched a four-lawyer branch in Singapore.

tom.baker@legalease.co.uk

Legal Business

Revolving doors: DWF and McGuireWoods hire in London as Jones Day, Hogan Lovells and BonelliErede expand worldwide

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Strategic recruitment DWFMcGuireWoods

Firms have been busy recruiting in London and abroad, as McGuireWoods and DWF made key London appointments and Jones Day, Hogan Lovells and BonnelliErede bolstered their international practices.

In a real estate move, DWF hired Mark Shepherd to its London office as partner after two years at Paul Hastings. He previously worked at DLA Piper and legacy SJ Berwin.

Shepherd has over 15 years’ experience in commercial real estate transactional work. Major mandates include advising the Crown Estate on its Norges Bank Real Estate Management partnership for its £1bn Regent Street portfolio.

Toby Askin, DWF’s UK real estate head said: ‘This is a key appointment in our strategic plan to continue building upon the success of our real estate profile within London, the UK and internationally.’

Still in the City, McGuireWoods hired ex-King & Wood Mallesons partner Lorraine Vaz to its debt finance practice.

Vaz is experienced on both lender and borrower financings work, with banks, debt funds and financial institutional clients. Vaz’s appointment is the firm’s third lateral hire since February, following Jeremy Davis from K&L Gates and Jennifer Kafcas from O’Melveny & Myers.

McGuireWoods debt finance chair Raj Natarajan said Vaz’s experience ‘opens a world of opportunity for McGuireWoods to satisfy the continuing movement toward U.S.-style leveraged finance in the United Kingdom.’ ‘Institutionally, McGuireWoods is built to fill that void’, he added.

On the continent, Italian firm BonelliErede brought in two senior arbitration partners to its Milan office. Herbert Smith Freehills’ (HSF) head of public international law Laurence Shore and ICC International Court of Arbitration Secretary General in Paris Andrea Carlevaris will join the firm as partners on 1 September 2017.

Shore, who was based in HSF’s New York office, will co-lead BonelliErede’s international arbitration practice from Milan. Carlevaris is re-joining BonellieErede after being a partner at the firm between 2009 and 2012.

Elsewhere in Europe, Jones Day hired antitrust partner Jürgen Beninca to its Frankfurt office. Beninca has almost 20 years’ experience in antitrust law and is also versed in internal investigations and anticorruption matters.

In Asia, Hogan Lovells expanded in Beijing, appointing corporate partner Larry Sussman, who joined 13-years at Los Angeles firm O’Melveny & Myers.

Patrick Sherrington, Hogan Lovells’ Asia Pacific and Middle East regional managing partner commented: ‘Larry is a talented and well established partner in the market in China. He has a very respectable client base acting across financial services, private equity, and the entertainment sector. Larry will be a valuable member of our corporate team in China.’

tom.baker@legalease.co.uk

Legal Business

DWF breaks into South America with associations following Asia launch

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Latin America DWF

DWF has fulfilled its ambition to enter the South American legal market with new associations in Argentina, Panama and Colombia, following swiftly on from the firm’s Asia launch in June.

The Manchester-headquarted firm has entered into associations with VAGEDES & Asociados in Argentina, Fabrega Molino in Panama and Duarte Garcia Abogados (DG&A) in Colombia. The associations will operate as ‘best friends’ arrangements and are not exclusive.

Stefan Paciorek, head of international at DWF said the firm had been eyeing the South American market for some time due to the fact that the continent was predicted to significantly increase in its global economic importance.

He added: ‘We know these three firms well through our long lasting ties in Germany. They all share our vision of doing things differently to meet clients’ needs and have a similar sector focus to us. We look forward to working closely with them.’

The move follows DWF’s first foray into Asia. In June, the firm hired a four-partner team which was previously at Singapore Eversheds.

The launch was DWF’s first office opening since April, when the firm set up office in Berlin. DWF hired DLA Piper’s financial services partner Nina Siedler and real estate partner Irene Schmid in the Berlin office, alongside Wolfgang Richter, who joined DWF Germany following the firm’s 2016 merger with BridgehouseLaw.

In January, DWF opened a Paris office after acquiring four-partner local firm Heenan Paris. The buyout brought in Heenan’s expertise in corporate, private equity, commercial, intellectual property/IT and litigation.

kathryn.mccann@legalease.co.uk

Legal Business

‘Most important strategic step’: DWF breaks into Asia with Singapore start-up

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Asia DWF

DWF takes on four-lawyer Singapore Eversheds team to set up new regional hub

DWF has broken into Asia for the first time, opening a Singapore office to expand its growing regional client offering. In June, DWF recruited a four-lawyer team formerly from Eversheds.