Speak no evil
4 November 2002
For the man that has led Davies Arnold Cooper (DAC) out of days so dark that they have become the stuff of market legend, executive partner Daniel Gowan has been keeping a remarkably low profile. However, when we meet, the brusque New Zealander is hardly the shy and retiring type.
Gowan has the confidence of a man whose management skills have been endorsed by his partners for a second term. He is particularly pleased to report that the firm's international strategy, focused on Madrid, Latin America and the Caribbean, is falling into place nicely.
In Madrid, DAC has just signed up for a new building, twice the size of the office it opened in 1997. Madrid has grown to 21 lawyers, with more hires anticipated. It remains a largely insurance-led office, but plans are under way to replicate DAC's UK practice areas. It has already hired corporate and construction partner Javier De Dios from Landwell and has been padding out its assistant numbers since then. Gowan says that Madrid is also handling an increasing amount of Latin American insurance work, to the extent that DAC is considering a permanent association with one of several local firms it works with. In the Caribbean, Trinidad petroleum company Petrotrin has been a particularly active client.
But there are other things that emerge as strictly off limits with Gowan. When I accept the offer to interview him I am led to believe that he is ready and willing to discuss the firm's troubled past as well as its present state. Unfortunately, no one seems to have told him this. My hopes of an intelligent postmortem of events at DAC are quickly dashed.
Gowan is in the thick of an arbitration case - he still spends 40 per cent of his time fee-earning - so plans to meet on neutral ground are abandoned in favour of a sofa-lined room at the firm's Bouverie Street offices. But despite the relaxed homeground setting, Gowan starts to look decidedly uncomfortable. Quite cross, actually, as he volleys back my questions on DAC's restucturing in 1999-2000. Under the banner of "refocusing on the firm's core strengths", DAC axed its Manchester corporate practice and made 90 staff in Manchester and London redundant. As the rest of the profession looked on open-mouthed, a spate of high-profile partner departures followed the cull.
Gowan was head of construction at the time. He was not part of the small management committee that implemented the cuts, but he was part of the equity partnership that voted for the restructuring.
I dare to ask whether, with hindsight, it was absolutely the right strategy to take; whether it was all worth it. But Gowan says his views haven't changed since he sent a letter to The Lawyer in April 2000, when he vented his anger about editorial coverage of the firm's actions. He helpfully suggests that I quote from this letter in my piece, because he has nothing more to add. So here goes. Back then he wrote: "The steps that were taken, drastic as they were, were needed to protect the interests of the partners and the vast majority of the staff who have remained with the firm."
He tells me that that if he could turn back the clock, the firm wouldn't talk so openly to the press about what it was doing. "The situation in this firm was grossly exaggerated," he says, while he feels that former managing director Nick Sinfield, who has since left the law, was particularly hard done by. "There are a lot of firms making people redundant now. Nobody is saying anything because it's happening all over the show. At the time we were one of the few firms that did that. That's why it attracted so much attention." Quite. DAC's actions stood out like a sore thumb because the market was at its height. Those were boom days, these are certainly not.
It is only when Gowan talks about his appointment in March 2000 as DAC's first ever elected managing partner, now known as the executive partner, that I feel I am getting anywhere. The only other candidate for the role was Sinfield. "The partners obviously thought I was preferable to what had gone before," Gowan says.
"I said when I was elected that I would consult the partners. My whole management ethos is based on getting consensus and moving things forward. It's a matter of concentrating on what your strengths are and having good people in the right places and letting them get on with it. My role is to ensure there is an environment in which partners can flourish. It is not my job to tell them how to run their businesses."
Gowan clearly enjoys the role, although he admits that, lawyers being lawyers, partnership meetings can often become shambolic. I come up against another brick wall, though, when I broach the issue of profits - after all, the refocusing was designed to grow profitability. But beyond boasting that figures for the first half of 2002 are up on the previous year, Gowan doesn't want to play the game. Which is a shame, because however crude a measure financial statistics are, they are the only means of judging comparative performance.
"Law firms are owned by partners and what the partners earn is not for anyone else to know," is all Gowan will say. At which point I start to wonder quite why I have been invited here and what Gowan thought I wanted to talk about. The Lawyer's own research found the firm had a steady year in 2001-02, with both turnover and profits per equity partner remaining static at £29m and £200,000 respectively.
Back on the safer territory of where the practice is going now, Gowan warms up again. To his credit, DAC has been relatively stable since he became executive partner, although it did decide to shut down its two-lawyer Newcastle office when the lease came to an end last year. The insurance work carried out there was transferred to Manchester.
DAC is now concentrating on five core areas, namely property, insurance, construction, international trade and product liability. A rundown of top clients over the last year includes Crest Nicholson and National Car Parks for property; Equitas for insurance; Jacobs Gibb for construction; and GlaxoSmithKline and Cape for product liability. Litigation is still a defining feature, with only 40 per cent of the practice being non-contentious.
The aim is to build out areas ancillary to these core practices, such as property finance and planning, while pushing up the value chain in terms of instructions. So in insurance, for example, DAC is targeting work on self-insurance arrangements and retained risk.
Gowan says: "We've been asking, where are our strengths? What are we famous for? How can we develop from those? That really is the way in which we've moved the practice forward since I was elected."
DAC's London office is a stone's throw from Freshfields Bruckhaus Deringer, and the contrast is not lost on Gowan. In a more light-hearted moment, he even quips that he wouldn't mind the money Freshfields' partners get. "We're not a huge organisation," he says. "We're not like Freshfields across the road. We're different and the differences between very large firms and the rest are increasing rather than decreasing. In terms of client base and the way they get work, firms of our size have to be much more proactive in doing things to distinguish themselves from the competition. Freshfields has a reputation. Certain types of work will just walk through the door. We have to obtain that reputation in a microcosm."
So was Gowan ever tempted to jump ship to a larger firm or one without such a difficult past as DAC? "I think that when you've been happy working somewhere and you've been reasonably well rewarded over the years, if that organisation has adverse circumstances you should see it out. I stayed because I wanted to and I believed it was the right thing to do and I felt I could make a difference."
Gowan has spent almost his entire UK career with DAC, joining as a salaried partner in 1983 after a couple of locum stints elsewhere, and he says that the character of the firm suits him. "It's a very unpompous firm," he says. "It provided a good environment for someone like me from outside the British Isles."
Gowan qualified in New Zealand in 1976 and practised there for three years at Meredith Connell. It was solid grounding. The firm was crown solicitor for Auckland, so young Gowan found himself junioring on criminal and civil trials from the outset. It was the usual antipodean world trip that brought him to the UK a few years later. He describes his time travelling around South America and the US and the two skiing seasons he spent in Europe as "the best thing I ever did in my life".
Gowan fell for an English chalet girl en route, scuppering any plans for returning home. And he hasn't lost his youthful enthusiasm, either for the job or for skiing. It's just a shame he can't apply it to talking about DAC's past or its financial health.
Davies Arnold Cooper