Dawsons and Penningtons set for imminent merger
Lincoln’s Inn firm Dawsons is close to sealing a merger with private client firm Penningtons after coming under pressure to recapitalise and keep a grip on its core partnership.
Further changes at Dawsons saw corporate partners Bernd Ratzke and Ute Mueller quit for private client firm Boodle Hatfield.
According to sources close to Dawsons, the firm has been scouring the market for months for a merger partner to help it stabilise after suffering a series of exits and being hit with two significant lawsuits.
When merger talks with Fladgate Fielder broke down before Christmas the firm was forced to introduce a four-day week and implement wage reductions.
Last month (14 February) Dawsons managing partner Martin Codd told The Lawyer: “Like many other law firms at this time we’re facing a challenging economic climate and we’re taking the necessary steps to ensure the firm remains strong and profitable.”
Both Dawsons and Penningtons confirmed the merger talks, with any deal expected to go live in July.
Codd said: “These negotiations are ongoing and we’re therefore unable to comment further at this stage.”
A statement from Penningtons added: “Part of our growth plan is to consider possible merger partners. We’ve been impressed by Dawsons’ lawyers; their practice would be a good cultural and strategic fit with our own, complementing our existing strengths.”
While Dawsons’ turnover has remained relatively static over the past few years, in July last year it was forced to settle a High Court claim for unpaid fees brought by Simmons & Simmons (The Lawyer, 5 July 2010). The firm also settled a claim for unfair dismissal brought by former chief executive Jeremy Ward that November.
Ward was succeeded by Mark Dembovsky in March last year, but the latter has since left to join Howard Kennedy as chief executive.
Meanwhile, top family partner Suzanne Kingston recently announced that she is defecting from Dawsons to Withers, taking two assistants with her.
The firm is also under pressure to vacate its Lincoln’s Inn premises to make way for Hardwicke Buildings (The Lawyer, 14 February).
In terms of turnover, the past few years have been harder on Penningtons than Dawsons, with the former’s turnover dropping by 23 per cent, from £29.1m to £22.3m, between 2006-07 and 2009-10. Over the same period its partner headcount contracted by almost a third (28 per cent), from 67 to 48.
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Readers' comments (29)
Victor Meldrew | 15-Mar-2011 10:20 am
Dawsons merging with Penningtons; it’s like Dad’s Army meets Last of the Summer Wine...
I’m sure Southern Cross can provide the office space...
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A_Smith | 15-Mar-2011 11:14 am
Looks to me like Dawsons will have no family or corporate department anymore. Essentially looks like an overstaffed litigation firm with a few add ons. Penningtons likewise.
If the 'merger' doesn't happen does that spell disaster for all involved?
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Anonymous | 15-Mar-2011 11:20 am
@ The_Laweyer: who told you "Dawsons’ turnover has remained relatively static"? I heard turnover was down, maybe as much as 30%-50%. Not sure what that means for PEP, but doesn't sound good
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Fairpoint | 15-Mar-2011 11:33 am
I say leave the firms alone. If they can sort out a merger that can save some if not most jobs then that is a good thing and not something we should jeopardise. Admittedly it is a shame for such an old firm of 300+ years to be going through this and something terrible must have been going on over the last year or so for it to be in this position. Lawyers don't often make good businessmen and maybe this is a case in point.
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Anonymous | 15-Mar-2011 9:07 pm
Save jobs? Around 40 members of Dawsons staff have either been wrongly forced out or made redundant in the past 8 months. All I see for anyone that merges with dawsons is trouble with a capital T. The firm let so many good workers and good lawyers go just to save a quick buck that it proves further that lawyers do not always make good businessman.
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Ashley Balls | 16-Mar-2011 10:44 pm
There is nothing illogical at all about this merger unless if is being driven by the desire to join two firms together for no other reason than they fit together 'quite well'. Presumably there is some strategy behind the initiative and some economies of scale my emerge. All that really matters is the clients and how they can access and receive improved services for lower cost. To achieve that will require investment and a lttle blood letting. Otherwise it is yet another example of assuming bigger is better and that would be dumb.
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Anonymous | 18-Mar-2011 4:28 pm
Isn't it easy to pass judgement when in possession of so little factual knowledge ? Anonymous on 14th 3.13pm states that they are two firms trying to succeed. No - that is just incorrect. Penningtons are a good firm, yes. Dawsons gave up trying to succeed some time ago has been going to the dogs for some years. Why? Because the completely lost direction when they lost their private client team to Hunters about 6 years ago. The new private client team was a mish mash of people that did not get on and wanted to go in different directions; the litigation team fell out in a spectacular way culminating in Jo Keddie taking her team to Winkworth Sherwood, and EPs refused to work together with a cohesive strategy. The firm simply lost its identity and lost its way. Instead of trying to all get along and work towards the same goal, massive factions developed, and focus was lost. IN some partners meetings certain factions actually refused to speak to the other - juvenile but true.
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Anonymous | 18-Mar-2011 6:26 pm
Oh how people love to gossip! No doubt, some of the above is true and some is fabrication. Hardwicke may have earmarked the Dawsons' premises, but I gather that there is no real pressure on the firm to move. No-one has been that interested in either of these firms over the past few years, so why is this such big news? Most small-medium sized firms have been exploring merger opportunities over the past year and, naturally, this causes internal instability. There have no doubt been some disappointing departures, as well as some welcome departures. These firms each have good lawyers, good clients and a similar vision, culture and strategy. I can think of a worse way to start...
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Anonymous | 8-Sep-2011 8:35 pm
If you change the badge on a broken down car it's still a broken down car! As a former client I found a lot of sitting on laurels and not a lot of customer service. Being around a long time means nothing, you are only as good as you are found to be today.
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