Legal Business Blogs

Pre-float DWF hires GC as another litigation funder lists and Burford secures $1.6bn

DWF has appointed a group general counsel (GC) ahead of its touted London Stock Exchange (LSE) listing early next year.

Litigation finance, meanwhile, has attracted more investor cash after Australian funder Litigation Capital Management (LCM) rose £20m on listing and Burford Capital secured £1.6bn in funding for new litigation investments. 

DWF said today (19 December) former Lucozade Ribena Suntory GC Mollie Stoker will join the firm as GC in January. Stoker is director of business development at Suntory Beverage and Food Europe and was Lucozade GC from 2014 to 2017.

Stoker will join DWF’s executive board and will act as counsel to senior management on the firm’s M&A activity. She will also become company secretary if DWF proceeds with its LSE listing.

The top-25 UK firm said in June 2018 it was considering an initial public offering (IPO), but it has been working with US investment bank Stifel on the float, targeted as a main board listing, since October 2017. The firm is believed to be seeking an early 2019 listing.

While the firm’s revenue has grown 25% over the last five years to £236m for 2017/18, it is struggling for profitability, with a profit per lawyer well below top 25 peers at just £23,000 last year. The profit margin is just 11%.

A valuation in the region of £400-£600m has previously been tipped but the low profitability suggests a valuation closer to £250m, based on previous law firm floats.

DWF chief executive and managing partner Andrew Leaitherland commented on Stoker’s hire: ‘Her strong background in corporate law, M&A and corporate governance, coupled with a high degree of commercial acumen will be valuable as we continue to grow the business globally.’

Stoker added: ‘This is an exciting time to join DWF. I look forward to supporting the business as it prepares for the next phase of its development.’

Stoker follows DWF securing in October an exclusive relationship with $81m-revenue US firm Wood Smith Henning & Berman, as well as the hire of one of the architects behind Freshfields Bruckhaus Deringer’s Manchester legal services hub, Anup Kollanethu.

Meanwhile, litigation funder LCM has listed on the LSE’s Alternative Investment Market (AIM), raising £20m at a market capitalisation of £56.5m. The firm recently launched its EMEA operations by opening an office in London, led by vice-chairman Nick Rowles-Davies, as well as an office in Singapore.

Rowles-Davies, formerly of Burford, had founded litigation financier Chancery Capital in 2017, but that business is understood to be folding into LCM. LCM recently de-listed from the Australian Stock Exchange and intends to use the £20m to fund its existing portfolio and for new pipeline opportunities.

LCM chief executive Patrick Moloney commented: ‘Being a London listed company positions us to fund an attractive, qualified pipeline of future projects and grow the business through the access to capital and a broadening of our shareholder base.’

He added: ‘Litigation financing is a growing alternative asset class uncorrelated with economic cycles, and we believe that we are now well-positioned to take advantage of the increasing number of opportunities across the sector globally.’

The listing comes shortly after fellow litigation financier, Vannin Capital, pulled its own IPO due to market volatility.

Finally, Burford said it had secured $1.6bn in funding for new litigation investments, following a strategic partnership with an unnamed sovereign wealth fund, a new private investment fund, and its own balance sheet. The wealth fund will provide $667m.

Burford chief executive Christopher Bogart commented: ‘Our success in being able to attract substantial long-term capital positions Burford to sustain its competitive advantage in the global legal finance industry.’

For more on what tapping the capital markets would mean for major law firms, read our special reportNo free lunch – will law firm IPOs be the next big thing?