DLA targets Asia Pacific growth via merger with Aussie best friend
DLA Piper is set to merge with its Australian best friend DLA Phillips Fox as it prepares to beef up its Asia Pacific practice with the ultimate aim of becoming the world’s largest law firm.
Nigel Knowles
Partners at the firm are to vote imminently on whether to bring the Australian firm into the international LLP, which includes the UK, EMEA and Asia offices, in what would create an Asia Pacific practice with estimated revenues of £195m and 700 lawyers.
If the move, which is expected to go live on 1 May, goes ahead DLA Piper would dwarf the largest UK firms operating in the region - Linklaters and Clifford Chance - which turned over £143m and £101m respectively in the region in 2008-09.
“All our clients are looking at Australia. You cannot ignore it,” said DLA Piper CEO Nigel Knowles. “If you want to be the leading business firm you need to be in the G20 economies and the emerging markets. How can any business not be in Australia?”
DLA Piper and its best friend have been pursuing closer alignment for the last three years, with DLA Phillips Fox undertaking measures to improve its profitability, including the closure of its Adelaide office and de-emphasis of its insurance practice. DLA Piper has invested in its own Asian offices as part of a regional offering.
DLA Phillips Fox also adopted the DLA prefix and DLA Piper Middle East partners Damian McNair, Stephen Webb and Tony Holland returned to their native Australia to work at DLA Phillips Fox following the downturn in the Gulf.
Under the new structure Holland would become managing partner of the Australian practice while Asia managing director Alastair Da Costa would be managing director for Asia Pacific. The firm will also include an Australian partner on the international board.
While the firm is yet to vote on the move, Knowles was confident that partners would give the tie-up their backing.
“It’s still subject to partner approval, which we’ll get. The partners have known that we’re going down this track for some time,” he told The Lawyer.
Under the plans DLA Phillips Fox’s New Zealand offices will not be subsumed into the LLP but will remain as part of the DLA Piper group, with that jurisdiction considered less significant by the firm. However, Knowles shrugged off assertions that that practice would be spun-off.
“I’m entirely and completely committed to New Zealand,” he said. “It’s served the firm very well and it’s status quo for them.”
Readers' comments (23)
Princely | 27-Jan-2011 12:03 pm
Asia Pacific is the prize. I predict there'll only be 4 independent firms left in Australia within two years as the big UK giants will be snapping them all up.
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Richard Keys | 27-Jan-2011 12:07 pm
Is this really such a big deal? The firms have been moving closer to operating as one firm for a while anyway.
And it's not as if DLA have made much secret of wanting to become an uber-brand over the last few years
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Conan The Barbarian | 27-Jan-2011 12:09 pm
I'm sure I'm not the only one who would find it immeasurably funny if the partners vote this down...
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Hamish | 27-Jan-2011 12:16 pm
Mediocre firm takes over another mediocre firm in jurisdiction nobody cares about. Big deal
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Gladstone Small | 27-Jan-2011 2:23 pm
Hamish - top Aussie-baiting there. It's as if The Ashes never ended...
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Lady in House | 27-Jan-2011 4:20 pm
Gladstone and Hamish...you never know the sign on bonus for the partners could be all those baggy greens that no-one else wants!! I agree though...to be honest who gives a...
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Boris | 27-Jan-2011 4:38 pm
I commend Sir Nigel on his foresight and strategic nous. The decision shows both commerciality and a penetrating understanding of the global economic drivers. He is truly a genius.
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Anonymous | 27-Jan-2011 4:44 pm
An obvious move that puts another piece of the jigsaw in place.
What DLA really needs though is a bigger platform in the main continental Europe cities. A merger with Simmons & Simmons would be a good start.
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Anonymous | 27-Jan-2011 4:57 pm
They could not merge with Simmons as DLA would then need to pay their lawyers properly.
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Lady in House | 27-Jan-2011 5:30 pm
Boris...are you a DLA associate wanting a pship or just tongue in cheek...I hope the latter
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Anonymous | 27-Jan-2011 5:55 pm
@Anonymous | 27-Jan-2011 4:57 pm
Oh yes those pooooor DLA lawyers only earning a mere £150K per year. How on earth does anyone survive in London on less than half a million?
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Anonymous | 28-Jan-2011 3:36 am
Another McDonalds in a different country...
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Saveaproperty.com | 28-Jan-2011 10:27 am
It should be voted down
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Stephen Pipes | 28-Jan-2011 12:32 pm
To all the snipers on here: keep sneering at DLA, and keep being complacent.
You are getting left further and further behind in terms of scale and are steadily losing control of your own destiny. Soon you will have only two options left: merge, or die. Hopefully it will be the latter.
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Vercingetorix | 28-Jan-2011 2:43 pm
@Stephen Pipes
Yes, I imagine Nigel Boardman is bricking himself about this development.
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Star Wars Kid | 28-Jan-2011 3:17 pm
to @Vercingetorix at 2.43PM
I'm sure too that Nigel Boardman and all at S&M are not worried at all about DLA. But, not everyone is Slaughters - in fact, in the UK no other firm is like S&M at all - and that's the problem with your argument.
But, there are a couple of dozen top 50 law firms in the UK that really are getting left behind in terms of global capability to whom such competition may soon matter.
OK, yes, DLA are no magic circle firm, but so what? They're doing alright and still will be some years in the future. As for many others between the UK Top 50 to silver circle rank, I'm really not so sure.
Last time I checked most major clients were increasing their investments abroad. You can follow them, or sit on your hands and wait to see what happens.
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Stephen Pipes | 28-Jan-2011 3:55 pm
@ Vercingetorix - I would be very surprised if even Slaughter and May were not aware of the dangers of becoming too sub-scale.
At present Slaughter and May is around a third the size of the largest firm in terms of total revenues, not a great problem in view of their very high profit margins. However if the largest firm was a twentieth the size then that would be a grave threat.
The process of globalisation and consolidation in the legal market has a long way to go, and the Chinese are only just begin to enter the market. In ten years' time things will look dramatically different.
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Gourmet | 28-Jan-2011 4:24 pm
Comparing S&M with DLA is like comparing Fat Duck with McDonalds. They are both selling food & drinks and McDonalds has a much larger turnover. So, surely, McDonalds must be the better place to eat!
I normally don't comment on things like these, but I just finished commenting on a DLA draft agreement. I am uncertain as to whether the lawyer who did the draft has an IQ of over 100. And yes, there are very good DLA lawyers and I know a few. But a draft of this quality would not have left a MC firm under any circumstances.
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Matthew | 28-Jan-2011 7:14 pm
Gourmet
I work at a MC firm and I can tell you that even here poor documents do get sent out (unfortunately) and I certainly get them from other MC firms as well! To suggest this does not happen is completely untrue!
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Ex DLA Phillips Fox | 31-Jan-2011 1:35 pm
Having worked at DLA Phillips Fox for many years, I know first hand the bad management the firm continues to show. It's financials are terrible - that's the real truth about why DLA PF's NZ office isn't included in the deal. DLA PF have a strong reputation for not maintaining their staff. Recently an employee filed proceedings against DLA PF and some 30 former staff were willing to appear as witnesses.
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Lady in House | 31-Jan-2011 3:03 pm
Stepohen Pipes - I find your comment rude and boorish - typical DLA in fact. As an in house lawyer at a major conglomerate with friends at major conglomerates Ill make sure we take our sneers elsewhere. Well done on making your clients feel as if DLA employs grown ups. If you cant take a joke, dont work for one.
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Walter Raleigh | 1-Feb-2011 8:40 am
Lady in House, there's nobody at DLA named Stephen Pipes. But you go ahead and keep making business decisions on the basis of anonymous comments you read on thelawyer.com.
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Hal Clark | 1-Feb-2011 7:55 pm
DLA is a one-trick pony with the tired and repetitive 80's mantra that biggest is always best. This 'strategy' avoids the need to consider the unthinkable - that perhaps the optimal model for international commercial law practices in the coming decade will greatly differ from that of the past 30 years. DLA's last major expansion was into the Middle East. It entered in a grand way, with great expense, only to find later that the party was just about to end. If it is true that DLA has the knack of knowing when to arrive in a market that is primed for collapse then we can expect a recession Down Under within the next 24 months.
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