DLA Piper Second” />It may seem like DLA Piper has been around for ever, but it’s only been a year since the merger. And we’ll admit it: it’s been a damn good year for the world’s most enthusiastic law firm.
As we report today (13 February), DLA Piper’s combined calendar year revenue figures reached £850m, making it, on current estimates, the second-largest firm in the world.
It’s some achievement. DLA Piper’s critics will say that it’s not a real merger because the profit pots aren’t fully integrated. But the firm does operate shared cash pools that cover various joint costs, particularly in the offices outside the UK and US. There’s also a cash pot that is earmarked for merit-based bonuses across the firm.
There are still plenty of question marks over DLA Piper, though. It’s a global firm without the premium-billing practice areas of M&A or banking. Its projects practice is potentially exportable, but as a host of other firms have discovered, there’s not much money in projects any more. (Just ask Allen & Overy.)
Its profit per equity partner (PEP) figure is distorted by the tiny equity partnership. Pressure to grow PEP means it may be increasingly unlikely to do dramatic bolt-ons or mergers in developed jurisdictions.
Firms needing to be rescued will no longer be able to slot into the DLA Piper model – unless they come en masse as salaried partners.
After several years racking up his air miles, Nigel Knowles might be taking a pause for breath. In fact, the smart money this year is that DLA Piper will spend most of its energies getting things right internally, such as institutionalising clients and working on integrating practice groups further.
Don’t get me wrong: DLA Piper will always have the appetite for the odd transformative deal, but it’s worth remembering that all its frenetic takeover activity last year came on the back of other firms’ mistakes. It only took over the EY practice in the CIS after the EY network imploded. Along with Orrick, it was the chief beneficiary of the collapse of Coudert. And its huge raid on Denton Wilde Sapte (DWS) to take the TMT team was born of the turmoil at DWS.
What DLA Piper has in spades is the ability to execute a deal. The magic circle firms and the big global beasts can be as sniffy as they like, but they shouldn’t ignore DLA Piper. Any firm that decisive should never be written off. Especially since it will always pounce on others’ weaknesses.