Wragge Lawrence Graham & Co is about to undergo a monumental change when it merges with Canadian firm Gowlings. The combination will by far be the biggest the firm has carried out but Wragges’ head of real estate Richard Bate already understands the potential benefits a merger can bring to individual practices.

The combination takes place less than 18 months after legacy firms Wragge & Co and Lawrence Graham merged and although the turnaround is incredibly fast Bate knows how to grow his real estate practice.

“We’d only done one full year since the businesses were united and we’re more than 10 per cent up on what the legacy firms were producing on aggregate,” says Bate.

“That’s quite significant and that took us to £62m of turnover in our first year together.”

The increase in growth is largely due to Bates noting the specific services that were uniquely provided by each legacy firm and then pitching those services to existing clients who had previously not been able to access them.

In this instance Wragge & Co had a strong house building practice while Lawrence Graham had an institutional practice. It was important for both sides of the merger to combine the two offerings.

“If you look at the likes of British Land, Land Securities and St Modwen Properties, those sort of companies that historically had been almost exclusively commercial in their orientation are broadening into residential development,” Bate explains.

This has allowed legacy Lawrence Graham lawyers the opportunity to offer a service they had previously been unable to provide. For Bate this type of opportunity is vital post merger but it could also signal additional revenue streams for Burges SalmonMayer Brown and Shoosmiths, which according to The Lawyer Market Intelligence all advise St Modwen.

Bate says law firms spend an astonishing amount of money trying to attract new business, “but in fact 90 per cent of a typical firm’s practice in year two is based on the clients in year one,” says Bate.

“That shows the real dividend of the merger as we can open up a whole series of stream of work that previously we were a bit nervous about tendering for.” 

The merger also granted London-based Lawrence Graham access to a lower cost centre through Wragges’ Birmingham headquarters. This is a tactic which has led to many firms opening in other regions in an attempt to pass reduce costs on to clients.

“We’re not having to scrap around in the way the magic circle and silver circle firms are trying to start operations in Northern Ireland or Bristol or Manchester,” says Bate. “Even though those firms have fantastic brands there just isn’t the supply of lawyers in those places that they can readily hire to create the scale they need to service their clients in the way they’d like to.”

This is less of a problem for Wragges as the firm is able to use its existing 800 Birmingham based staff to offer a price advantage others are trying to replicate.

However Bate is aware that real estate was not a driving factor in the decision to merge Wragges and Gowlings. This is due to real estate largely operating on a domestic market but Bate still believes there will be opportunities for international referrals.

“Real estate in terms of what Wragges is concerned is around 37 per cent of the business by turnover,” he says. “I can’t imagine that when you put that together with a significant turnover in Canada that we won’t get good things flowing from that.”

One potential opportunity is the chance to offer Canadian pension funds access to UK real estate as they move away from the country’s traditional natural resource industries, which have suffered from falling prices in recent years. Through Wragges and Gowlings tie-up the new firm will be better placed to offer these investors access to the UK.

Canada is not the only region Bate is attempting to target. Wragges has also announced the formation of a two-lawyer real estate team in its Dubai office. The new team consists of partner Andrew Thomson and senior associate Melissa Younan who both joined from Clyde & Co.

The creation of a real estate team in the region has been eagerly awaited by the firm’s Dubai managing partner Tim Casben who has been approached by clients looking for real estate advice. But Bate was not keen to send a partner from the UK to Dubai due to the high costs involved, and instead opted for a lateral hire.

As Thomson has his own existing clients it reduced the risk associated with setting up a new team while testing the market. The decision to bring in Thomson also shows the firm’s willingness to expand its real estate practice to other international regions.

“He has interests much further than Dubai,” says Bate. “He’s been building connections right around that region and he’s a young partner, he’s an enthusiast and he’s well connected.

“I do think that even if only half of his connections or a third of his connections come good it’s a very interesting platform from which we can build.”

If the firm adopts Thomson’s international ambitions than it we could see Wragge’s real estate practice spread to other areas in Dubai, Doha and even Northern Africa.

Deals

Deal one: Berwin Leighton Paisner advised Tesco on the sale of 14 development sites worth £250m across London, the South East and Bath.

The sites were sold by Tesco’s property development subsidiary Spenhill to a fund and client advised by real estate investment specialist Meyer Bergman. The sites are suitable for mixed-use and residential development and completion has already been reached on 11 of the sites.

BLP real estate partner Justine Oldale led the team and worked with partner Sunita Chawla, associate director Iain Suttie and Associate Lucy Fishman.

Linklaters advised Meyer Bergman during the deal with the team led by real estate partner Simon Price who was assisted by associates Matthew Topp and Jack Shand. Planning partner David Watkins also advised on the deal whole counsel Paul Wilson and associate Robert Tunningley provided construction advice.

Deal two: Wedlake Bell advised Hamburg based Warburg-HIH on the sale of the Angel Shopping Centre in Islington. The real estate investment company is a long-standing client of Wedlake Bell, which also advised on the purchase of the property in 2010.

The shopping centre was sold to CBRE Global investors for an undisclosed amount. CBRE was advised by Linklaters.

Wedlake Bell’s team was led by corporate partner Jai Bal who was assisted by corporate senior associate Richard Belsey and commercial property senior associate Grainne McCourt. Tax partner Make Ridsdale and banking senior associate Richard Roberts also advised during the transaction. The firm’s client partner for Warburg-HIH is commercial property partner David Earl.

The Lawyer released its first ever UK 200 Real Estate Report in September. For any law firm leader looking for insights into how to make the most efficient use of their real estate portfolio it is essential reading.

To purchase the complete UK 200 2015 Real Estate report, contact Richard Edwards on 020 7970 4672, or email richard.edwards@thelawyer.com