Law firms look at link-up as mergers multiply

NORTHERN law firm Dickinson Dees has opened talks with Bond Pearce in the South West as merger activity sweeps the UK legal sector.

If the tie-up goes ahead, the enlarged firm would have 1,200 staff, a turnover of £95 million and eight offices across the UK from Aberdeen to Plymouth.

Confirmation of the negotiations comes a day after Leeds firm Lupton Fawcett announced that it had entered into merger discussions with smaller rival Lee & Priestley.

Sign up to our Business newsletter

Sign up to our Business newsletter

Jonathan Blair, managing partner of Newcastle-based Dickinson Dees, told the Yorkshire Post that “globalisation, consolidation and commoditisation” are driving changes through the industry at large.

He said: “It’s a very dynamic sector. There has been a lot of merger activity. There was a lot last year and a lot this year. A number of discussions are going on.”

Increasing numbers of UK businesses are operating overseas, while increasing numbers of UK businesses are coming under foreign ownership, he said.

“There is a need for an international element and a need for scale to be able to deliver that at the right sort of level,” added Mr Blair.

Neither Dickinson Dees nor Bond Pearce have international operations, but Mr Blair said the firms would be looking at this “down the line”.

He said the private sector, the public sector and financial institutions are reducing the number of law firms they use.

A recent report revealed 23 of the top 30 UK law firms have fewer FTSE-100 clients than they did a year ago and not one increased the number, added Mr Blair.

Law firms want to improve efficiency and are looking at ‘onshoring’ to lower cost areas in the UK and the outsourcing of legal processes, he said.

“The name of the game is making sure you are stronger and have a more diverse client base. If you are able to attract and retain the best people you are putting yourself in the best possible shape to make sure you meet the challenges that are out there.”

The new Legal Services Act makes way for external equity to invest in law firms for the first time and is expected to drive further consolidation in a fragmented legal sector. Mr Blair described the so-called Tesco Law as “a misnomer” and said The Co-operative Group is leading the way in providing new competition as it rolls out legal services.

Mr Blair would not comment on the talks with Bond Pearce beyond a joint statement issued yesterday, other than to say “it is an exciting development but it is early stages”.

Dickinson Dees, which can trace its roots back to the 1780s, moved into Yorkshire in 2007 with the acquisition of York-based Philip Ashworth & Co.

The Yorkshire operation’s turnover has risen from £1m to £4.5m since then. Dickinson Dees moved into the highly competitive – some say overcrowded – Leeds market earlier this year as “the next logical step” in its development.

It has 60 staff at Whitehall Riverside, including Mark Owen, the former senior partner at Pinsent Masons in Leeds.

Dickinson Dees is of equal size in staff and turnover to its potential partner Bond Pearce and they sit next to each other at 58 and 57 in the UK law firm rankings.

Victor Tettmar, managing partner of Bristol-based Bond Pearce, said: “By merging the two firms we could take a major step towards fulfilling our longer term strategic goals, implementing now a client and values-driven merger to create a firm in the top 30 in the UK capable of delivering the strength in depth and specialist skills required by our clients, be they large corporates, major organisations or high-net worth individuals. It is that opportunity that we now wish to explore.”