Dentons has become the latest firm to post encouraging financials for 2021/22, announcing a robust 14% increase to its top line across its UK, Ireland and the Middle East (UKIME) business, which reached £260.4m.
Much of the growth was driven by a surge in corporate activity, with the UK corporate group seeing revenues hike by over 20%. Internal referral work also increased, as inbound work from outside the region surged by 40% to £35m.
While the firm does not disclose profit figures, profit per equity partner (PEP) is estimated to be near the £1m mark occupied by firms such as Simmons & Simmons.
Speaking to Legal Business, UKIME chief executive Paul Jarvis (pictured) said: ‘We saw a big increase in cross-border M&A and private equity across a number of key sectors. What we have seen this year is one of our USPs, the global presence, really coming to the fore.
‘In a very hot transactional market, where there’s a lot of cross-border M&A, clearly that plays into our sweet spot because we could service that M&A not just in the UK, Ireland, Middle East, but across the globe. That has given us a really big launchpad and you can see the upswing in work referred from international offices outside of the UK. Our referrals back have also really increased.’
The Dublin office also saw impressive development. In its first full year of trading, the outpost was able to contribute 18% to revenue growth across the collective regions.
Commenting on the firm’s plan for the office, Jarvis added: ‘It was never a Brexit play for us. We were looking at Ireland way before Brexit. What we have and continue to build in Ireland is a premium law firm. We have recruited the top talent from the top firms, and we are seeing that top talent deliver immediately.’
Assessing the current year, Jarvis concluded: ‘Last year was exceptionally busy. If you look at the activity levels that we’re at currently, they’re not quite what they were last year, but if you compare them to previous years we’ll be doing very well. When you’re comparing to a real high, you can say “oh look, we’re X percent below last year”, but last year was completely turbocharged.’
Meanwhile, in sharp contrast to last year’s booming results, DAC Beachcroft (DACB) today unveiled an investment-impacted set of financials blighted by a 7% dip in profit per member.
Likewise, profit before tax tumbled 8% from £67m to £62m, as the firm reported a year of heavy outlay on people and infrastructure. Total turnover was up a sedate 2%, from £275m to £280m.
The results mark a significant reverse from last year, when DACB unveiled pacey results headlined by a 19% uptick in both profit before tax and profit per member.
Managing partner David Pollitt told Legal Business: ‘The decrease in PEP is just down to the fact we had such a good year last year, and we decided to use some of that surplus to invest in the business.’
In terms of spending, DACB shelled out on a new practice management system, as well as cloud technology and cyber security to ‘futureproof the firm’, according to Pollitt. The firm also made 11 lateral hires over the course of the year and made 17 partner promotions in May 2022, going some way to explain the drop in profit per member.
Pollitt pointed to good performances in the firm’s insurance and healthcare businesses, and while real estate performed similarly, he admitted: ‘I’m not sure what the future holds there.’ Likewise, Pollitt identified a drying up of corporate work that had kept the market lively during the previous financial year: ‘Like many firms, it’s keeping the momentum rather than trying to forge ahead. Had the transactions carried on like they were, our numbers would probably look quite different.’
In terms of priorities for next year, Pollitt said: ‘Our international strategy is a key priority for us. One of the more frustrating aspects of the Covid year was that it made international growth more difficult. Finding the right partner takes time. We’ve got three or four projects on the go, two of which are very close.’
On the international front, during the year DACB signed a co-operation agreement with network partner BLD Bach Langheid Dallmayr in Germany. The combination gives both firms ‘more lawyers in Europe than any other insurance-focused law firm’, according to DACB.
Despite today’s unflattering numbers, Pollitt is confident that the concerted investment will translate into immediate growth, telling Legal Business that the firm is already up 6% for the first quarter as compared to last year.