UK Top 200 position: 1
DLA Piper sits at the top of the UK 200 table this year following The Lawyer’s decision to take what is effectively the client’s view and assess firms’ global revenues regardless of how they share — or do not share — profit across offices.
The firm beat Clifford Chance to the top spot by a margin of around £100m, posting a turnover of £1.4bn for the 2011 calendar year. Global net profit was £351.1m while average profit per equity partner (PEP) at the firm, which operates an entirely merit-based remuneration system, was £766,000.
It is fitting, then, that as the firm is now being treated as a single entity for financial reporting purposes, DLA Piper’s international LLP (which covers everything outside the Americas) took strides to align itself with the US side of the business in 2011. The firm stopped short of full financial integration, but unveiled plans to become an all-equity partnership, mirroring the US. Previously, DLA Piper International had three classes of partner: full-equity, senior fixed-share and fixed-share. Following the move, which took effect on 1 May 2012, the LLP received £30m in fresh contributions, while overall contribution requirements for partners fell by 15 per cent on the previous year.
Seismic as the switch to all-equity was, it was not DLA Piper’s most arresting development of the year. The firm hired former Linklaters managing partner Tony Angel — for around £2m a year, The Lawyer understands — as senior partner in November 2011, replacing the incumbent Janet Legrand who remains on the firm’s board.
Angel’s arrival sparked a certain amount of trepidation among partners at DLA Piper. His reputation at Linklaters was one of working wonders for profitability while cutting out any fee earners who did not pull their weight or fit with his vision for the firm. Sure enough, in January 2013 the news broke that the firm was closing its Glasgow office and selling its defendant insurance practice; 251 staff are involved in the redundancy consultation.
Angel has been brought in to help shape DLA Piper as it enters its next phase of growth. The firm will continue to position itself as a global business adviser to multinational companies, but in a more coherent and targeted fashion after years of rampant expansion.
DLA Piper’s investment in alternative business structure (ABS) LawVest, a canny but controversial move during the year, fits well with the proposed strategy. LawVest is a commoditised, sector-focused company with an arm that provides direct access to the bar at fixed fees. It offers DLA Piper a way to hang on to smaller and less profitable clients — even if it is through a proxy — while allowing Angel to do what he did at Linklaters: make the client base leaner and more lucrative.
The firm’s global presence may mean it has eclipsed the magic circle in turnover, but the firm’s profit margin is still some way below its competitors’, at 25 per cent. Average staff numbers across DLA Piper globally rose by 23 per cent in the 2011 calendar year, from 6,950 to 8,565. That number was boosted by the firm’s merger with its Australian best friend DLA Phillips Fox in May 2011. But partner numbers only rose by nine across the firm, from 1,238 to 1,247. A firm spokesman attributed this to 'natural wastage' at partner level on the US side. Indeed, looking at the international LLP separately shows that is where the growth was. Partner numbers rose from 647 to 689, while staff numbers increased from 4,729 to 5,835.
Globally, litigation is DLA Piper’s highest-earning department, accounting for 29 per cent of revenue. Corporate, which accounts for 20 per cent, has a higher number of partners at 270 compared with litigation’s 252. Property makes up 11.7 per cent of revenue while finance accounts for 11.3 per cent.
DLA Piper did not provide a figure for the top and bottom of equity, but The Lawyer estimates the global spread, including both the international LLP and the US side of the business, to be between £240,000 and £3.2m.
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