Denton Wilde Sapte (DWS) managing partner Howard Morris has instigated a major review of the firm’s banking department in an attempt to raise the City firm’s under-par profitability.
Internal sources are predicting a fundamental shake-up of the underperforming group, which was at one time the firm’s flagship department. A DWS partner said: “Banking is the big one. We’ve got to get PEP [average profit per equity partner] up.”
Although turnover is expected to increase this year, sources suggest that firmwide PEP is expected to be virtually flat at around £385,000. Last year PEP stood at £375,000.
The finance group generates around 40 per cent of DWS’s revenue, but its profitability is understood to be significantly lower than in other areas of the practice, such as real estate’s £700,000-plus and litigation’s £500,000.
One former DWS partner said the group’s problem was its failure to win instructions on the highest-value matters.
“Yes, Dentons acts for nine of the top 10 banks in the world,” he said. “But doing what? The mere fact you’ve done one piece of work for Citibank doesn’t mean there’s a real relationship there.”
The finance group has suffered a series of departures in recent times, most notably in leveraged and Islamic finance.
The review is expected to be finalised before the end of the current financial year.
The overhaul follows a similar review of DWS’s energy, transport and infrastructure team, which was identified as one of the firm’s struggling departments two years ago.
DWS energy group head Chris McGee-Osborne said of the review of his group: “This was not a restructuring involving axing partners, de-equitisations or pulling teams. We just stopped and took stock of the practice so that we could make more of the opportunities that were available to us.”
The energy review is considered to have been a major success, with PEP in the team now well beyond £400,000.