Focus: Dentons

Denton Wilde Sapte’s newest partners are optimistic about their firm’s future. But is the excitement of being made up going to their heads?

Every year Denton Wilde Sapte brings together all of its partners from its global network for a two-day conference in the UK. The event was traditionally held at the luxurious Celtic Manor hotel in South Wales. There, partners could escape the hours of business speak with the occasional game of golf. But in a sign of the times, this year the firm chose the more serious venue of the London School of Economics.

The location was not the only change. This year The Lawyer was given exclusive access to Dentons’ new partner intake. In a tough year in which to be made up, we quizzed Dentons’ newest half-dozen on whether partnership is still the Holy Grail or a poisoned chalice.

Bittersweet

For the six lawyers promoted to ­Dentons’ partnership this year – three in energy, infrastructure and project finance, two in banking and one in corporate – the partnership conference is a fairly upbeat affair. It involves “lots of high-fives and back-slapping”, says Dean Alderton, who was promoted into the Dubai ­corporate department, along with “group hugs”, according to Sarah Dyke, who was made up in the ­London banking and finance group.

Maybe these comments are not entirely tongue-in-cheek. What is immediately noticeable when The Lawyer meets this next generation of partners is the diversity of the group. Two are women, one of whom has four children aged under 10, while four are based in Dentons’ overseas offices. The Wasps that have ­dominated most City partnerships for so long appear to be in retreat.

Each of the partners has been through a ­rigorous process that began last November, when they started preparing their business cases, followed by official vetting by the partnership acceptance ­committee (Pac).

The scrutiny of the Pac must seem like a walk in the park compared with what the six now have ahead of them. They have been made up in a market dubbed the worst for 80 years. How will they fare at a firm where the ­profitability has been sluggish at best and this year has dropped by 36
per cent?

Predictably, the partners tend to couch their concerns about wider market conditions with the caveat that their respective practice areas or regions are better cushioned.

Infrastructure partner Tammy Samuel works in a relatively recession-proof area, focusing largely on UK rail work, with clients including National Express, Northern Rail and Virgin Trains. She also ­handles energy work for RWE Group.

“Becoming a partner [at this time] is good because by the time you are a senior partner the economy will have improved,” she argues ­optimistically. “It gives you the ­opportunity to build a practice in ­quieter times.”

“It’s a tough market to be made up in,” stresses Alderton, although the recent upturn in the price of oil should get work going again in the Gulf.

Almas Zhaiylgan, the only Kazak among the Almaty office’s three ­partners, says: “Doom and gloom is felt everywhere, but Kazakhstan is not feeling it as harshly. [We’re focused on] banking and finance and oil and gas. We’ll get out of it faster.”

Profit problems

As partners from the Middle East rub shoulders with those from ­Middle England, Dentons’ partner conference resembles an advert for the firm’s international reach, which encompasses a broad sweep of the Gulf and Central Asia. It is the ­international offices that have ­recorded turnover growth rates of as high as 26 per cent, the firm claims.

But that kind of growth is easier to generate if you are billing in dollars – which many of these offices are.

Certainly, firmwide profitability has not been great recently. Dentons has posted the highest drop in PEP of any of the small group of firms that have announced their results so far, down 36 per cent, from £470,000 to £300,000. This, and the 15 per cent margin this year, puts it on a par with 2008 data supplied by a firm such as Cobbetts, which is less than a third of Dentons’ size and without a comparable international brand.

But one City recruiter currently in ­contact with a number of Dentons partners is also doubtful of last year’s figure. “I don’t think £470,000 was the average by any stretch of the imagination last year,” he maintains. “They’re a firm that’s never made any money.”

However, chief executive Howard Morris resolutely stands by the data. “We report our numbers absolutely accurately,” he asserts.

Cash injection

What is certain is that the need to inject a little sparkle into the firm’s finances resulted in the conference voting for equity partners to fork out up to £90,000 each (The Lawyer, 1 June). This followed the news that Dentons had made 76 redundancies (TheLawyer.com, 17 March). Both issues underline the firm’s concerns about its profitability, with the latter claiming £3.5m in costs.

These issues are still a little way off for the firm’s newest partners, who will have to wait a minimum of three years before they are considered for the equity. But Samuel for one is ­sanguine about the cash call.

“By the time I’m through to ­equity level, hopefully the market will have come to fruition as a result of the investment that current partners are making,” she says.

Happy days?

Most of the new partners have been at Dentons for several years and two trained at the firm. That in itself bodes well for its brand. “People stay at Dentons because on the whole they’ve liked it,” says the recruiter. “If you want a relatively easy life it’s the place to be.”

But Samuel is ex-Freshfields Bruckhaus Deringer. Does she regret making the move given Dentons’ vastly divergent earning power?

“I wasn’t particularly looking to move from Freshfields, where I was based in asset finance,” she says. “I saw Dentons advertising for a rail lawyer and it was a much more ­commercial position, which fitted with where I wanted to take my ­practice.

“It might be slightly easier to ­manage having a family [at ­Dentons], but I’d managed that already at Freshfields. I don’t really make ­decisions based upon money. I’m earning more money than I ever would have done before.”

Dentons’ salaried partners are thought to start on around £120,000, certainly a comfortable wage. But the optimism coming from the new crop of partners may start to look misplaced if the firm fails to address its lack of profitability in the long term.

Dean Alderton, corporate
Education
:
1993-97: LLB/B.Com, Otago University, New Zealand
Employment:
2009: Partner, Denton Wilde Sapte, Dubai
2007-09: Senior associate, Dentons, Dubai
2000-07: Senior associate, Gilbert & Tobin, Sydney
1998-2000: Tax adviser, PricewaterhouseCoopers

Matthew Cox, banking and finance
Education:

1997-98: LPC, College of Law, London
1996-97: CPE, College of Law, London
Employment:
2009: Partner, Dentons, Singapore
2006-09: Senior associate, Dentons, Tokyo, Dubai
2001-06: Associate, Dentons, London and Tokyo

Sarah Dyke, banking and finance
Education:
1998-99: University of Nantes, France
1997-98: LPC, College of Law, London
1994-97: LLB, University of Exeter
Employment:
2009: Partner, Dentons
2007-09: Senior associate, Dentons
2001-07: Associate, Dentons
1999-2001: Trainee, Dentons

Udayan Mukherjee, energy, infrastructure and project finance
Education:

1991-55: LLB, University of Wales, College of Cardiff
Employment:
2009: Partner, Dentons, Dubai
2007-09: Senior associate, Dentons, Dubai
2006-07: In-house counsel, Calyon, London
1999-2006: Associate, Allen & Overy (A&O), London, Tokyo
1997-99: Trainee, A&O, London

Tammy Samuel, energy, infrastructure and ­project finance
Education:

1995-96: LPC, College of Law, Chester
1992-95: MA Law, University of Cambridge
Employment:
2009: Partner, Dentons
2004-09: Senior associate, Dentons
2003-04: Associate, Dentons
1998-2003: Associate, Freshfields Bruckhaus Deringer
1996-98: Trainee, Freshfields

Almas Zhaiylgan, energy, infrastructure and ­project finance
Education:

2004-05: LLM, University of Houston Law Centre, Texas
1991-97: International Law, Kazakh State University, Almaty, Kazakhstan
Employment:
2009: Partner, Dentons, Almaty
2002-09: Senior attorney, Dentons, Almaty
1997-2002: Attorney, Dentons, Almaty