Law giant snubs raising cash as shake-up looms

Sir Nigel Knowles, joint chief executive of the legal giant, was speaking as it reported a rise in profits of nearly six per cent, to £503m.

He said DLA, which has its roots in Yorkshire, is able to fund its own growth as the legal market prepares for deregulation, dubbed “Tesco law”, from October.

The Sheffield University graduate said DLA is not thinking of taking private equity money, while going public would be time-consuming and cut the rewards available to the future leaders of the business.

“There isn’t anything we want to do that we cannot pay for ourselves. We have got to where we got to by doing it ourselves.

“Listing would be far too complex and we would not be giving the partners of tomorrow what the partners of today have had. We would be accused of forward-selling the silver.”

Sir Nigel said DLA had achieved a “strong set of results against a very difficult background”.

Total revenue for 2010 rose one per cent, to $1.96bn (£1.27bn), and the profit pool for global partners rose 5.9 per cent, to $777.8m (£503m), as the firm cut costs by 2.5 per cent, although it did not reveal a cash figure.

DLA has pursued growth aggressively and now has 4,200 lawyers in 76 offices in Asia Pacific, Europe, the Middle East and the US.

Last year, the firm established a presence in Turkey, Brazil, Portugal and Venezuela, and last month it merged with DLA Phillips Fox in Australia, with which it had already been working.

Sir Nigel said: “We have had some very good and strong performances across the business. The US had a fairly modest time in 2009-10 and they are starting to see things pick up again. Continental Europe was particularly strong.

“The UK has held its position. It saw a movement down in terms of the whole legal market. After a bit of re-shaping in the prior year, it held its position and had a strong impact on the bottom line.”

Growth has continued since the year-end with revenue in the first quarter of 2011 $22m (£14.2m) higher than the same period last year. The firm said it expects revenue to rise 15.6 per cent this year, or 8.5 per cent excluding the impact of Phillips Fox.

Sir Nigel said 90 per cent of its revenue comes from the G20 group and it has a presence in 14 of the nations.

“We have seen strong growth across the firm... (but) in these financially turbulent times, we take each quarter as it comes.

“The global financial crisis has ended but it is still pretty turbulent. There is pretty poor GDP growth in Great Britain and Europe. It has resulted in a paradigm shift. The boot was on the foot of the law firm and now it is on the foot of the client. There has been a move to value.”

DLA has 500 staff across two sites in Leeds and 350 at its Sheffield office, although it no longer has a base in Bradford.

Last year, its clients included Santander – which owns Abbey and the savings arm of Bradford & Bingley – as well as Barclays, Australian bank Macquarie, Motorola and online daily deal site Groupon.

It said its UK and US businesses’ had grown revenue beyond budget expectations in 2010.

Sir Nigel said: “Against the backdrop of a tough global legal services market, our performance demonstrates the advantages of the firm’s diversity of services and geography.

“Our ambition is to be and remain the leading global business law firm, and our absolute focus on our clients and what they need from us now and in the future will enable us to achieve this.

“Everyone in the firm is focused on continuing to deliver capability and value to our clients wherever they choose to do business.”

Sarah Day recently took over as the new head of DLA Piper in Leeds and called on Yorkshire companies to appoint more women to board level positions.

Nigel Knowles Factfile

After graduating from Sheffield University, Nigel Knowles joined Broomheads and Neals. In the early 1980s, he opened the firm’s Doncaster office.

Broomheads and Neals changed its name to Broomheads and, in 1986, merged with Dibb Lupton to create Dibb Lupton Broomhead.

Sir Nigel went on to work in the Leeds office where he built a major corporate practice. He was later elected to the role of managing partner and relocated to London in 1996.

In 2004, the firm achieved the single largest transatlantic law merger in recent history and created what was then DLA Piper Rudnick Gray Cary with more than 1,000 lawyers on each side of the ocean.