08:24, July 21 228 0

2017-07-21 08:24:08
Dentons merges with Scotland’s Maclay Murray & Spens

Dentons is set to merge with Scottish firm Maclay Murray & Spens, adding 216 lawyers to its UKMEA base and bringing the firm’s global headcount up to 7,616 lawyers.

Through this merger, which will complete later this year, Dentons will gain a presence in Aberdeen, Edinburgh, Glasgow and will add headcount to its London base.

Maclays has 56.71 full time equivalent fee earners in London, of which 14.5 are partners and 7.8 are full-equity partners. The entire team is expected to move to Dentons’ London office by the end of this calendar year.

As part of the deal, four of Maclays’ management team will join the Dentons UKMEA board, including Maclays chief executive Kenneth Shand and chairman Michael Livingston. Shand will also join the regional management committee, which currently has five divisions.

Maclays had previously been in merger talks with Bond Pierce (now Bond Dickinson since its merger in 2013), and was rumoured to have engaged in talks with Addleshaw Goddard and US firm Locke Lord.

Talking to The Lawyer, Shand admitted that the firm “had been interested in expanding its proposition for some time”.

“We are quite a cautious bunch in some ways but ambitious, and we believe we have found a genuinely fascinating opportunity here.

“It will bring us the much greater reach and scale both nationally and internationally that we feel we need to expand our client offering and grow new clients. It will also bring us the firepower to bring tech efficiencies to the business to develop the service we can offer. It expands the career opportunity for our people and people we want to recruit going forward.”

Dentons UKMEA CEO Jeremy Cohen said that his firm had “toyed” for a while to be in Aberdeen to support its oil and gas practice, and said that both firms had a good practice fit, with banking, financial services, energy and infrastructure capabilities.

“For some time we have wanted to grow in the UK,” he said. “Maclays is a great quality firm both in the talent of the lawyers and client base that we can take the Dentons message to.”

Shand said that this merger will allow the firm to be “the only significant player in Scotland” with a presence across all continents. “We will have a real advantage on Scottish national firms,” he said. “It will add global capability to a high quality-combined London and regional model.”

Both Shand and Cohen confirmed that “some partners” would be locked in as part of the merger deal, but would not confirm how many or for how long.

Maclays has yet to provide financial figures for the 2016/17 year, but in the previous round the firm suffered one of the biggest drops in revenue per lawyer, 10 per cent, while revenue per partner dropped by 4 per cent.

The firm’s net profit dropped by 20 per cent last year to £10m, putting it 31.5 per cent lower than it was in 2011/12 and 37.54 per cent lower than in 2007/8.

The firm dropped in equity partner numbers by 13 per cent from 46.6 to 40 during the year and profit per equity partner dropped by 12.4 per cent to £248,000.

Turnover rose by 3 per cent to £44.8m, leaving the firm still 4 per cent below its most recent high of £46.9m in 2011/12 and 27 per cent below the £61.1m posted in its best-ever year, 2007/08.

Shand told The Lawyer that although the accounts have yet to be finalised, market conditions in the UK have led the firm to expect flat results for 2016/17.

Maclays will be incorporated into Dentons’ UKMEA LLP, which this year reported a 9 per cent PEP dip from £530,000 to £481,000, while revenue grew by 1 per cent to £165m. This additional revenue from the merger could boost the firm’s figures up to above the £200m mark for the first time.

In the last 12 months, the firm has launched a UK patents practice with a team from Olswang, and made up seven partners in the UK in its latest 54-strong global promotions round.The firm also decided to scrap the role of managing associate following a review in its UK offices.

According to data from The Lawyer‘s Global 200 2017, Dentons generated an estimated $2.1bn (£1.5m) in global revenue in 2016, a 0.9 per cent drop compared to 2015. Constant expansion for the firm has meant that it has added 158 partners between 2016 and 2017, an increase of 9.7 per cent from 1,626 to 1,784. Beijing was named as Dentons’ largest office with 129 partners, but with this merger London will overtake it with 137 partners.

In the last financial year, the firm has launched an office in Yangon (its second office in South East Asia); entered into a tie-up with Peruvian firm Gallo Barrios Pickmann; entered a strategic alliance with a local Brazilian firm; launched an office in Georgia by taking a team from DLA Piper; opened in the Netherlands with a Dutch merger;

The firm has continued to integrate the McKenna Long & Aldridge teams – chopping 60 business services roles in 20 offices.