Tony Angel puts matter at top of agenda for firm’s Tuesday board meeting after partners express outrage
DLA Piper co-chief executive Sir Nigel Knowles has become embroiled in a partnership storm after it emerged at the end of last week that he and a small number of other partners at the firm had personally invested in alternative business structure (ABS) LawVest without declaring it to the firm’s board or the wider partnership.
DLA Piper took a collective stake last year (28 October 2011), putting £62,500 into the nascent business. While that is the current extent of the commercial relationship between the two organisations, both DLA Piper and LawVest have stated that they expect that smaller DLA Piper clients will begin to use LawVest.
Following enquiries from individual partners, global co-chairman Tony Angel emailed partners stating that Knowles, who is also non-executive chairman of LawVest, was the only individual on the board to have invested in the ABS. However, sources close to the firm have told The Lawyerthat it then became clear that other individual partners known to be personally close to Knowles had also invested in the business, leading to what one partner described as “uproar”.
The international board is meeting tomorrow (Tuesday 28 February) and it is understood that the issue is at the top of the agenda.
On Thursday (23 February), Knowles sent an email to the firm in which he expressed shock that his action was being perceived as a conflict of interest and indicating that he would consider divesting his stake.
On Friday (24 February), Angel sent out another email to the partnership that stated that the board had at no time considered any investment made by individuals. It is understood that Knowles’ and the other partners’ individual investments were made subsequent to the firm’s.
A source close to the partnership said: “There’s genuine frustration among the partnership. If it’s such a good investment, how come it isn’t available to everyone?”
Another said: “Corporate governance has gone astray here.”
However, another source said: “The view of the world that there’s some grand plan to funnel vast amounts of work to LawVest and that Nigel and his mates benefit is just nonsense.”
LawVest chief executive Karl Chapman said: “The investors and the share register of LawVest is a confidential matter.”