Legal Business Blogs

‘International is the growth engine’: DWF eyes US after £42.5m Spanish acquisition

DWF is looking to crack the US market with an acquisition which would likely surpass its £42.5m deal for a Spanish law firm announced today (11 December).

The firm, which became the UK’s sixth and largest law firm to list in March this year, announced the acquisition of 40-partner Rousaud Costas Duran (RCD) alongside its half-year results, adding 400 staff across offices in Madrid, Barcelona and Valencia. RCD reported revenue of €35.7m last year.

The deal is worth up to £42.5m, DWF’s largest acquisition, comprised of up to £19m in cash and the remainder in DWF shares. It cements a relationship of more than a year between the firms, which led to an exclusive association in June 2019.

DWF chief executive Andrew Leaitherland (pictured) told Legal Business Spain was one of the regions the firm identified in its prospectus for growth, alongside Poland – where the firm made a £3m acquisition of K&L Gates’ 11-partner Warsaw office in May – Canada, the US and the Netherlands. He said there was significant overlap between the two firms’ clients in real estate, financial services and insurance.

‘Spain will become more important going forward should Brexit go through,’ he commented. ‘Through the association we had the ability to get to know them and there’s a strong cultural alignment, they’re all about delivering legal services in a different way. It’s a very credible platform from which we can scale.’

DWF’s revenue for the six months to 31 October 2019 grew 10% to £146.8m, of which organic growth was said to be 7%. The firm’s international arm, which also saw an office opening in Düsseldorf and hires in Newcastle, Australia, grew 28% to £33m.

‘International continues to be the growth engine of the business,’ Leaitherland said. ‘RCD is a good illustration of how we’re going to go about that moving forward.’

He told Legal Business DWF had the ability to make larger acquisitions and would likely need to as it sought to enter the US market, where it has had a similar exclusive association with Los Angeles-based Wood, Smith, Henning & Berman since October 2018. The US has stricter restrictions on outside ownership of law firms but Leaitherland is confident the firm can find the right model, particularly having spent £20m on the IPO, including a large proportion on regulatory advice.

‘The US is unlikely to be a small deal because it’s such a big market. There’s opportunities in all of our target markets but needless to say, the US in particular is the largest litigation market in the world so it’s a market that we’d love to be in,’ he commented. ‘We’ve found structure to accommodate it in other territories and we’re confident we can do the same in the US.’