Legal Business

Financials 2015/16: DAC Beachcroft posts 9% profit boost despite subdued turnover

Financials 2015/16: DAC Beachcroft posts 9% profit boost despite subdued turnover

As the firm continues gradual growth, DAC Beachcroft increased turnover to £202m, a 2% increase on last year’s £200m. Profit before tax was up £3m to £35m, a 9% rise on last year’s figures, with profit before tax per member rising 21% to £358,000.

DAC Beachcroft managing partner David Pollitt told Legal Business growth had come from the firm’s corporate and real estate divisions, and progress had been made internationally.

At the half-year point in December the firm had unveiled a 2% rise in 2015/16 revenues to £100.8m, while overall net debt fell by £4.7m (17%) year-on-year.

Pollitt (pictured) said the firm will continue to strengthen its core practice areas and will take a more meticulous approach the transactions it does.

He said: ‘We can do more work on improving the profit and the PEP of our business and that’s going to involve us continuing to take a further look at the work that we do. The reason that our revenue is flat is that we’ve seen growth in some areas and other areas we’ve turned back the dial a little bit. We’re making sure we’re moving the value of our business upwards. I hope our results show people in the market place that we are getting stronger.’

The firm saw a shake-up of its management last year with the first new executive team since the merger of Davies Arnold Cooper and Beachcroft in October 2011.

The firm promoted 12 to partnership this year, with two in London. The promotions were made across claims solutions, global insurance, corporate and commercial and clinical risk. The firm made two fewer promotions this year than last when it made up 15 partners.

Growth has been modest across most firms that have posted financial results so far this year, with Clyde & Co and Osborne Clarke posting exceptional revenue results. Turnover at Clyde & Co jumped 13% to £447.3m on last year’s £395m while profit per equity partner (PEP) climbed to £665,000. At Osborne Clarke, revenues were up by 23% from €191.6m to €236.3m.

madeleine.farman@legalease.co.uk

 

 

Legal Business

‘Last piece of the UK and Ireland jigsaw’: DAC Beachcroft forms association with Belfast’s McKinty and Wright

‘Last piece of the UK and Ireland jigsaw’: DAC Beachcroft forms association with Belfast’s McKinty and Wright

Top-25 firm DAC Beachcroft has signed a three year ‘best friends’ agreement with Belfast’s McKinty and Wright in a bid to expand its network.

From 1 June DAC will refer shared clients and combine marketing efforts with the Northern Ireland firm, a top-ranked specialist insurance defendant practice with seven partners and 19 lawyers in total.

Lester Doake, senior partner at McKinty and Wright, said: ‘This agreement with an international law firm of the calibre of DAC will allow us to apply our skills to a wider customer base to the mutual benefit of both firms. We are eagerly looking forward to working together.’

DAC managing partner David Pollitt told Legal Business: ‘It’s the last piece of the UK and Ireland jigsaw for us and from an insurance perspective being able to look after our clients for all parts of the UK and Ireland is important. We’ve had connections with McKinty the past and it now felt right to formalise the arrangement.’

In December DAC reported a 2% rise in its first-half revenues for 2015/16 to £100.8m, while overall net debt fell by £4.7m (17%) year-on-year. The firm said at the time that revenue ‘stood above budget’ and the results were ‘characterised by ongoing margin improvement and continued progress in the management of working capital, resulting in a strong cash outcome.’

In the past 12 months, the firm has broadened its international reach, opening an office in Miami to strengthen its Latin American offering by connecting local insurance clients to the rest of its network. It also entered the alternative business structure market, gaining a licence for its claims solutions business in England and Wales, a move that will allow the firm to bring in outside investment and make non-lawyer partners in the business.

victoria.young@legalease.co.uk

 

Legal Business

DAC Beachcroft deepens relationship in Malaysia with application for joint venture

DAC Beachcroft deepens relationship in Malaysia with application for joint venture

Last month DAC Beachcroft became one of a few firms to take advantage of the liberalisation of the Malaysian market as it applied to the country’s Bar council for a joint venture (JV) licence with Kuala Lumpur-based association firm Gan Partnership.

According to Gan Khong Aik, one of four partners at Gan Partnership, the two firms have been in a formal association for the last four or five years. The Malaysian practice, which specialises in corporate commercial, dispute resolution and intellectual property is hoping to expand its offering in reinsurance and insurance through formalising its relationship further with DAC.

Legal Business

DAC takes advantage of market liberalisation to enter JV in Malaysia

DAC takes advantage of market liberalisation to enter JV in Malaysia

DAC Beachcroft is the latest firm to take advantage of market liberalisation in Asia, applying for a joint venture (JV) licence with Malaysian association firm Gan Partnership.

According to Gan Khong Aik, a partner at Gan Partnership, the two firms have been in a formal association for the last four or five years. The firm, which has a broad corporate and commerical practice, as well as a focus on dispute resolution and intellectual property, is hoping to expand its offering in reinsurance and insurance through formalising its relationship further with DAC.

Speaking to Legal Business, Gan said: ‘We have a portfolio in insurance but this JV will formalise that to some regard. To get the licence there is a certain process to go through. We make an application to the bar council and then there will be a selection committee chaired by the attorney general of Malaysia.’

Malaysia, which is also a strong market for Islamic banking, construction and arbitration, has been increasingly popular with UK law firms in recent years since local legislation provided a mechanism through the Legal Profession (Amendment) Act 2012, which has liberalised the market and encouraged foreign firms to join together with local practices or practice law as a qualified foreign law firm (QFLF).

According to The Law Society, interest in legal services opportunities between Malaysia and the UK has soared given the recent liberalisation of the Malaysian legal services market. At the time, the Law Society of England and Wales president Andrew Caplen said: ‘With Malaysia opening its legal services market and both countries pledging to double the value of bilateral trade to £8bn by 2016, we also have every reason to talk business.

Last February, Trowers & Hamlins applied for a QFLF licence in the country and in 2012 was the first foreign firm to launch a representative office in Kuala Lumpur after it received approval from the Malaysia Investment Development Authority

kathryn.mccann@legalease.co.uk

Legal Business

Weightmans and DAC Beachcroft reappointed as North West local authorities finalise £10m panel

Weightmans and DAC Beachcroft reappointed as North West local authorities finalise £10m panel

DAC Beachcroft, Hill Dickinson, Weightmans, and Geldards have been appointed as partners on the North West Legal Consortium’s £10m legal panel, positioning them to work closely with local authorities associated with over 40 councils in the North West of England.

Although DLA Piper has been appointed to the wider panel, the firm has missed out on partner status this time around. Addleshaw Goddard, Trowers & Hamlins, Blake Morgan, TLT, Browne Jacobson and Ashfords have also won places on the consortium’s panel which comprises 18 firms in total.

The panel for the consortium will run for four years, and has been awarded across five lots: civil litigation, prosecutions and regulatory; property, planning and environment; corporate governance, ethical standards and information law; projects, procurement and commercial; and adult social care and education.

The consortium has indicated there is room for legal work to extend during the course of the contract to other related organisations including NHS bodies, local emergency services and educational providers.

Weightmans partner Andrew Cooper said: ‘[The position of] partner firm gives us the opportunity to work closer with local authorities. This is an increasingly important consortium in the local authorities sector and we’re delighted to have been reappointed. We look forward to working closely with them in the future.’

Other notable panel appointments this year include Eversheds, Osborne Clarke and Addleshaw Goddard’s appointment to Siemens UK’s legal panel; Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer, Linklaters and Ashurst’s appointment to Credit Suisse’s recently finalised UK panel; and Eversheds, Reed Smith, Dentons and K&L Gates appointment to a seven-firm global panel created by US car rental giant Avis.

madeleine.farman@legalease.co.uk

Legal Business

News in brief – February 2016

News in brief – February 2016

CASES AGAINST LAW FIRMS DOWN

Figures collated by RPC suggest the post-financial crisis wave of professional negligence claims against law firms has passed. High Court cases against firms were down 47% last year. While the number of cases spiked by 192% to 418 for the year 2013-14, the number of actions against solicitors for the 12 months to 30 June 2015 is lower at 221.

 

Legal Business

DAC Beachcroft takes £4m hit on failed IT project, LLP accounts reveal

DAC Beachcroft takes £4m hit on failed IT project, LLP accounts reveal

National law firm DAC Beachcroft took a £4.39m hit on a failed IT project as it tried to change its case management system internally, accounts reveal.

The firm’s LLP accounts for 2014/15 show it wrote off £1.5m as an exceptional expense after giving up on the IT project. The year before it had written off £2.89m associated with the project, for a total of £4.39m.

The accounts say after a board review the project was considered ‘no longer viable.’

DAC finance director David Gillard said the firm had hired external consultants which worked with staff to develop a case management system, but in October 2014 it was decided it was no longer of value.

Gillard said since then the firm had not yet implemented a new system but it was ‘back to the drawing board.’

He added: ‘We will look to all sorts of alternatives – it may be more sensible for a large software firm to take over the project for us.’

Despite the expense, the firm posted a 20% jump in profits for the financial year 2014/15. Its profit for division among members rose to £30.5m from £25.5m.

The firm, which posted flat turnover at £198.5m from £197.2m said in the report it considered the results a ‘solid financial performance in challenging circumstances.’

‘This growth was principally due to a reduction in expenses, in large part associated with lower staff costs, including those occasioned by restructuring in DAC Beachcroft Claims Operations,’ the accounts stated.

DAC’s average number of employees fell to 2,129 from 2,027 and staff costs were reduced from £109.2m to £104.8m. The firm’s highest paid member took home 6.7% more, as the payout rose to £438,506 from £468,063.

The firm reduced its lock up days from 164 to 149, and said total net debt at the year-end reduced from £29.7m in 2014 to £24.6 in 2015, a reduction of 17.2%.

In July last year, the firm elected real estate partner Virginia Clegg as senior partner, while insurance head David Pollitt became managing partner, bringing both the insurance and non-insurance parts of the business together.

victoria.young@legalease.co.uk

Legal Business

H1 2015/16: ‘Plenty more to be done’ – DAC Beachcroft posts modest 2% revenue rise

H1 2015/16: ‘Plenty more to be done’ – DAC Beachcroft posts modest 2% revenue rise

National firm DAC Beachcroft has unveiled a 2% rise in 2015/16 half year revenues to £100.8m, while overall net debt fell by £4.7m (17%) year-on-year. 

Announced today (14 December) for the six months to 31 October, the firm said revenue ‘stood above budget’ and the results were ‘characterised by ongoing margin improvement and continued progress in the management of working capital, resulting in a strong cash outcome.’

In June the firm announced its full year 2014/15 financials which showed a 3% rise in total billings to £200m up from £194.4m the year before, while the average amount received by equity partners was £307,000 for 2014/15 – up 10% on last year’s £278,000.

Following a period of integration since the merger of Davies Arnold Cooper and Beachcroft in 2011, the firm undertook a defining post-merger management election over the summer, in which real estate partner Virginia Clegg was elected as the firm’s new senior partner while insurance head David Pollitt took the role of managing partner.

The firm also broadened its international reach, opening an office in Miami as it seeks to strengthen its Latin American offering by connecting local insurance clients to the rest of its network. It also entered the alternative business structure market, gaining a licence for its claims solutions business in England and Wales, a move which will allow the firm to bring in outside investment or make non-lawyers partners in the business.

Pollitt said: ‘Our drive for improved profitability is also showing results as is our focus on good business discipline, with lock-up improving significantly.’

‘However, there is plenty more to be done to continue delivering the necessary marginal gains for the remaining six months of the year to help us transform our year-end figures from good to great.’

Other firms to announce half year results this quarter include Nabarro, Allen & Overy, Osborne Clarke, Field Fisher, TLT and Clyde & Co.

sarah.downey@legalease.co.uk

 

 

Legal Business

Revolving doors: DAC Beachcroft, Osborne Clarke, Baker & McKenzie among those announcing new recruits

Revolving doors: DAC Beachcroft, Osborne Clarke, Baker & McKenzie among those announcing new recruits

A number of firms including Osborne Clarke, Baker & McKenzie, CMS and Simmons & Simmons made key hires last week. 

Osborne Clarke has hired Jeremy Summers as a partner in its litigation team, joining from Slater and Gordon where he headed the business crime and regulation team. The firm’s UK managing partner Ray Berg said the hire would allow the firm to offer further white collar crime expertise, and Summers’ experience in Hong Kong would add to the formal association Osborne Clarke has with Koh Vass & Co.

Going the other way, James Mullock is leaving Osborne Clarke after almost 20 years to join Bird & Bird as partner in its international privacy and protection group. The firm’s of its co-head international data protection group Ruth Boardman said Mullock’s sector-specific expertise, particularly in advising on complex technology, media and telecoms transactions, will help the firm proactively develop data protection opportunities clients as the practice grows internationally.

Baker & McKenzie is also upping its data protection practice by hiring GE Capital’s global senior privacy counsel Dyann Heward-Mills as partner, in a move which brings the number of IT and commercial lawyers it has in London to more than 30. The firm’s London head of IT law Harry Small said Heward-Mills brings to the team a wealth of privacy and data protection insights together with a deep understanding of the regulatory pressures currently faced by clients in a number of sectors.

Meanwhile, CMS Belgium has picked up former Allen & Overy counsel Tom De Cordier to join as a TMC/data protection/life sciences partner. CMS Belgium managing partner Tom Heremans said ‘CMS has a strong focus on technology and life sciences both internationally and here in Belgium. And this strategy is paying off: more and more clients turn to us for assistance in this rapidly developing area.’

Still in Europe, Simmons & Simmons’ German office is expanding its life sciences sector group with the hire of Boris Handorn who joins as partner. In Düsseldorf Orrick, Herrington & Sutcliffe has hired Andre Zimmerman from the Frankfurt office of King & Wood Mallesons to head up Orrick’s German employment law practice. Orrick has also hired Annalisa Dentoni-Litta as partner in its structured finance team in Rome.

Back in Britain, Gide has expanded its London real estate practice by shifting Hugues Moreau, who had headed Gide Warsaw’s real estate practice, back to London.

Meanwhile, DAC Beachcroft has expanded in Manchester, adding Paul Ellaby as a corporate partner. Ellaby joins from Ward Hadaway where he was a partner in the Manchester corporate practice. Also in Manchester, Browne Jacobson has boosted its Manchester health team by appointing Rebecca Fitzpatrick from Hill Dicksinson, and appointing former Berrymans Lace Mawer lawyer and deputy district judge Claire Batchelor as a consultant.

Simmons & Simmons has hired James Coleman as corporate partner in its Dubai office, from Allen & Overy in Doha where he was counsel. In Asia, Ashurst has strengthened its debt capital markets team with the appointment of Jini Lee as a partner in its Hong Kong based securities and derivatives group. Lee joins from Linklaters where she had worked in the Hong Kong and London offices. 

victoria.young@legalease.co.uk

Legal Business

‘The final piece of the jigsaw’: DAC Beachcroft launches Miami office targeting Latin America

‘The final piece of the jigsaw’: DAC Beachcroft launches Miami office targeting Latin America

DAC Beachcroft has opened an office in Miami, led by a former AIG lawyer, as it looks to strengthen its Latin American offering by connecting local insurance clients to the rest of its network.

In common with the firm’s New York office, the Miami outpost will not undertake legal work locally in Florida. Led by former AIG associate general counsel Sascha Stullenberg, DAC Beachcroft said the new office will instead acting as a liaison between the firm’s international network in Chile, Mexico and Colombia, to insurance and reinsurance clients operating in Miami.

The firm’s head of insurance, David Pollitt, said ‘The firm maintains its own offices in Mexico, Chile and Colombia as well as a strong and deepening relationship in Brazil but the final piece of the jigsaw has been Miami, a rapidly growing market through which an increasing amount of Latin American insurance and reinsurance business flows’.

The move means the firm has a presence in two leading insurance and reinsurance centres in Latin America, São Paulo and Miami, DAC Beachcroft’s Latin American regional head Anthony Menzies said. It also builds on the merger of its Brazilian associate office, JBO Advocacia with full service firm Demarest Advogados earlier this month. JBO Advocacia partner Marcia Cicarelli Barbosa de Oliveira became head of insurance of the newly merged entity.

DAC Beachcroft has been building its presence in Latin America for some years and became the first UK firm to open in Chile in 2013 with the acquisition of two local outfits.

victoria.young@legalease.co.uk