Legal Business

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

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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

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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

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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

Legal Business

DAC Beachroft gains ABS for claims business as it prepares for ‘complex and challenging market’

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DAC Beachcroft is the latest firm to enter the alternative business structure (ABS) market gaining a licence for its Claims Ltd as it seeks to future-proof its offering in the sector.

Effective today (2 September), the licence will only apply to the firm’s claims solutions business in England and Wales, and both DAC Beachcroft LLP and DAC Beachcroft International Ltd will continue to be regulated as law firms.

Commenting on the move, Craig Dickson, chief executive of DAC Beachcroft Claims Solutions Group said: ‘Securing an ABS licence for our claims business in England and Wales gives us greater flexibility and capability, in the future, to adapt to changes and opportunities in this complex and challenging market.’.

The move will allow the firm to bring in outside investment or make non-lawyers partners in the business. Mishcon de Reya and Kennedys have both obtained ABS licences over the last 12 months while US firm Cahill Gordon & Reindel used the structure to open up a litigation practice in the City.

It has been tough recently for firms with large insurance practices and margins continue to be squeezed. DAC was no exception, cutting 62 roles following a redundancy consultation and being hit by rising staff costs and IT failure, however the firm posted positive results for this financial year, with a 3% rise in its total billings to £200m, up from £194.4m last year.

The firm also stated that operating profit before exceptional items rose by 10% from £30m to £33m – the use of that metric comes after the firm was hit by an expensive IT failure last year which was booked as an exceptional item and knocked £2.9m off profits, the firm said that whether there are any exceptional items for this year will be determined during the audit process.

In July, DAC unveiled a new leadership team, electing real estate partner Virginia Clegg as senior partner, while insurance head David Pollitt was named managing partner. Clegg succeeds Simon Hodson while Pollitt will replace current incumbent Paul Murray. Both new appointments will take effect from 1 November.

kathryn.mccann@legalease.co.uk

Legal Business

DAC Beachcroft unveils new leadership following contested election

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DAC Beachcroft has elected real estate partner Virginia Clegg as the firm’s new senior partner, while insurance head David Pollitt has been named managing partner, bringing both the insurance and non-insurance parts of the business together in leadership.

Clegg succeeds Simon Hodson while Pollitt will replace current incumbent Paul Murray. Both new appointments will take effect from 1 November.

The duo won their seats against two other candidates – Richard Beaty, a partner in the firm’s professional and financial risk group and Bristol-based real estate head Michael Bothamley from the non-insurance side of the firm.

Based in Leeds, Clegg is currently the regional senior partner for Leeds and a board member, and has advised property owners and developers on development, asset management, investment and funding issues.

Pollitt, who will be based in London, chairs the Claims Solutions Group, is an executive board member, as well as heading the insurance department. During his tenure, the firm has opened new offices in Colombia, Chile and a representative office in New York, as well as signing association agreements in Canada, Malaysia and Brazil.

Both Clegg and Pollitt will stand down from their current position when the new leadership roles take effect with successors to their respective roles announced in due course.

Outgoing DAC Beachcroft managing partner Paul Murray said: ‘Simon and I would like to place on record our heartfelt congratulations to David and Virginia. Virginia’s contribution to the growth of our commercial business and David’s tenure of the insurance sector during a period of significant growth bear testament to the pair’s leadership, resilience and business focus.’

The new management is the firm’s first new executive team since the merger of Davies Arnold Cooper and Beachcroft in October 2011. Hodson and Murray were elected to their roles at legacy Beachcroft in 2005 and then re-elected for a second term in 2010.

jaishree.kalia@legalease.co.uk

Legal Business

Financials 2014/15: DAC Beachcroft sees total billings reach £200m as profits rise 10%

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As the firm ramps up for a defining election, DAC Beachcroft has announced its financial figures for 2014/15 saying it had seen a 3% rise in its total billings to £200m up from £194.4m last year. 

The firm also stated that operating profit before exceptional items rose by 10% from £30m to £33m – the use of that metric comes after the firm was hit by an expensive IT failure last year which was booked as an exceptional item and knocked £2.9m off profits, the firm said that whether there are any exceptional items for this year will be determined during the audit process. The firm’s £200m billings figure is 1.5% higher than the firm’s £197m fee income figure which was reported in its 2013/14 LLP accounts.

Based on the operating profit before exceptional items figure, the average amount received by equity partners was £307,000 for 2014/15– up 10% on last year’s £278,000. The firm also said that net debt had fallen from £30m to £25m as of 30 April 2015 while lock-up days had also decreased from 164 to 149 reducing the firm’s need for working capital.

DAC Beachcroft managing partner Paul Murray (pictured), who is set to step down from his role later this year, said: ‘This is a solid performance across key areas of our business and I am very pleased with the outcomes reflected in the provisional numbers. Billings exceeded our plans for the year and the Operating Profit figures reflect improvement in underlying profitability and margins.’

‘In addition, the lock-up days values highlight our efforts to improve working capital management and the reduction in net debt is the practical consequence of these focused endeavours. This performance represents improvements that we were determined to make and that will be continued.’

The firm is currently getting set for an election this summer as it sees senior partner Simon Hodson also stepping down. Potential candidates for the two executive roles being cited currently are: head of the firm’s insurance sector, David Pollitt and Richard Beaty, a partner in the firm’s professional and financial risk group, as well as real estate head Michael Bothamley and Leeds-based partner Virginia Clegg.

michael.west@legalease.co.uk

Legal Business

DAC Beachcroft set for defining post-merger management election

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DAC Beachcroft is gearing up for a management election this summer between both insurance and non-insurance partners as the firm looks to select its first new executive team since the merger of Davies Arnold Cooper and Beachcroft in October 2011.

Current senior partner Simon Hodson and managing partner Paul Murray have been in place since 2005 when they were elected to the roles at legacy Beachcroft and then re-elected for a second term in 2010. Neither will stand again this time around.

There are four partners being talked of as in contention for the firm’s leadership, with the heads of real estate and insurance both potential candidates.

As Legal Business went to press four potential candidates had been cited, including head of the firm’s insurance sector, David Pollitt, who is based in Bristol, and Richard Beaty, a partner in the firm’s professional and financial risk group. London-based Beaty was appointed to DAC Beachcroft’s board in May 2011 and is a disputes lawyer.

From the non-insurance side of the firm comes Bristol-based real estate head Michael Bothamley, who sat on the firm’s board from 2006 to 2011, while real estate partner Virginia Clegg is also being touted. Leeds-based Clegg was elected to the firm’s board in 2013 and is also the firm’s regional senior partner in the city.

A statement from the firm said: ‘This is an ongoing process so it would be inappropriate for us to comment any further until its completion later this summer, at which stage we will make a formal announcement.’

The new management will have work to do as the latest LLP filings at Companies House revealed an 18% drop in profits from £31.2m in the 2012/13 financial year to £25.5m in the year ending 30 April 2014 as staff costs rose and the firm booked the cost of an expensive IT project. However, the firm did see a 6% increase in revenue from £186.8m to £197.2m.

The LLP filings also revealed that the firm had extended its banking facilities by £15m to help it focus on ‘its strategic growth plans’. This saw the amount of bank loans the firm had outstanding rise from £9.2m in 2012/13 to £24.1m in the year ending 30 April 2014.

kathryn.mccann@legalease.co.uk

Legal Business

DAC Beachcroft set for defining post-merger management election

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DAC Beachcroft is gearing up for a management election this summer between both insurance and non-insurance partners as the firm looks to select its first new executive team since the merger of Davies Arnold Cooper and Beachcroft in October 2011.

Current senior partner Simon Hodson and managing partner Paul Murray have been in place since 2005 when they were elected to the roles at legacy Beachcroft and then re-elected for a second term in 2010. Neither will stand again this time around.

Legal Business

Partner promotions: DAC Beachcroft makes up 47% of 15-strong round in Bristol

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UK-top 25 firm DAC Beachcroft has announced its partnership promotions for 2015, making up almost half of its intake in Bristol.

A total of 15 lawyers will make the firm’s partnership ranks, seven of which will be based at the firm’s Bristol office. From the remainder, three were made up in London, two in Manchester, and one each in Birmingham, Winchester and Leeds.

The promotions take the firm’s total partner numbers to 258 and will go into effect from 1 May. These are spread across ten practice areas with most partners were made up in in claims solutions followed by commercial dispute resolution, real estate and healthcare regulatory.

DAC Beachcroft managing partner Paul Murray said: ‘As always, these promotions underline that client demand remains strong and prospects across the business remain good. Coupled with our improving financial performance, the promotions speak volumes for the renewed confidence I am seeing across the firm and will be instrumental in us realising our full potential in terms of profitable growth.’

The promotions come after the firm LLP fillings at Companies House in January revealed its profits available for division among members fell by 18.3% from £31.2m in the 2012/13 financial year to £25.5m in the year to 30 April 2014.

The promotion list in full:

Ros Ashcroft, Regulatory & Public Law, Bristol

Nick Beko, Real Estate, Manchester

Jonathan Bingham, Claims Solution Group, Birmingham

Rhiannon Davis, Insurance Advisory, London

Belinda Dix, Healthcare Regulatory, Winchester

Faye Fishlock, Claims Solutions Group, Bristol

Gemma Leonard, Real Estate, London

Harald Loeffler, Commercial Dispute Resolution, Manchester

Richard Loxley, Employment & Pensions, London

Cassandra Mitchell, Claims Solutions Group, Bristol

Chris Morris, Healthcare Regulatory, Bristol

Mike Pearce, Corporate & Commercial, Bristol

Simon Thomas, Commercial Dispute Resolution, Bristol

David Williams, Claims Solutions Group, Leeds

Rob Williams, Claims Solutions Group, Bristol

jaishree.kalia@legalease.co.uk

Legal Business

A 17-year dispute: Roadchef workers win legal battle against DAC Beachcroft client over employee shares

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Hundreds of workers at motorway service operator Roadchef are set to share a windfall after a 17-year long legal battle against the company’s former chief executive regarding an employee share option scheme.

More than 600 people working for Roadchef, which has 21 service stations in England, Wales and Scotland, were due to benefit after former managing director Patrick Gee, who led the 1983 buyout of the firm, decided to allocate them around 20% of the company’s shares in the mid-80s. Gee died, however, before the scheme was completed and his successor, Timothy Ingram Hill was accused of cheating staff out of millions of pounds by disregarding Gee’s wishes. When Roadchef was bought out in 1998 by Delek, an Israeli multinational, the shares made Ingram Hill almost £27m.

Bankrolled by Harbour Litigation Funding, the claim involved the 1998 transfer of shares in Roadchef between two trusts, EBT1 and EBT2. EBT1 operated an employee share ownership plan for the benefit of employees while EBT2 was used to provide share incentives to senior management. The dispute brought to court concerned the circumstances in which the senior management trustees granted options over the shares to Ingram Hill personally, who served in several high powered positions at the company over a period of time including as managing director, chairman and chief executive.

Hardwicke Chambers trio Nigel Jones QC, PJ Kirby QC and Emily Betts were instructed by Capital Law for the claimant, while Fountain Court Chambers duo Michael Brindle QC and Giles Wheeler were instructed by DAC Beachcroft for the defendants.

The claimant argued that transfer of shares from EBT1 to EBT2 was void and that the transfer made was in breach of trust or breach of fiduciary duty owed to the beneficiaries of EBT1. There were further allegations that Ingram Hill dishonestly assisted in the breach, as he received the shares in the knowledge that they had been transferred in breach.

Having considered whether or not the transfer of the shares was entirely valid, void or voidable, in January 2014 Justice Proudman found that, irrespective of any wrongdoing on the part of Ingram Hill, the transfer was void as it was outside the power of the trustees. Proudman held that the claimant could therefore void the transfer of the shares. The High Court also found Ingram Hill liable for breach of fiduciary duty as he did not obtain the informed consent of other directors because he did not tell them he intended to secure the options over the shares.

The success for the claimants at trial ultimately led to a settlement between the parties. In a statement today (2 February), Capital Law said: ‘The terms of the settlement with Timothy Ingram Hill (and others, including his wife, Mrs Ingram Hill) remain confidential. The Roadchef Employee Benefits Trustees Limited will now undertake negotiations with HMRC and other parties to determine precisely how much money will be available for distribution. They will continue to work to administer the trust as swiftly as possible so that the beneficiaries can receive their respective share without further undue delay.’

sarah.downey@legalease.co.uk