04:13, October 20 166 0

2017-10-20 04:13:16
Who will challenge Andrew Leaitherland for DWF’s top job?

DWF will soon begin its managing partner elections with incumbent Andrew Leaitherland looking likely to extend his 11-year tenure.

Leaitherland has been in the role since it was created in 2006. Since then, he has taken a regional firm with a turnover of £34m to an increasingly international outfit generating £201.2m in revenue across 13 countries and 29 offices.

The big question is: will anyone contest Leaitherland for the position?

“For years, there has been Andrew and only Andrew,” says one ex-partner. “That’s been a huge strength, but also a big problem.”

The last three elections (2009, 2012 and 2014) have all been uncontested. The firm’s CEO of insurance services Paul Berry holds the esteemed position as being the only person to have run against Leaitherland and did so in the very first election.

One ex-partner says, “there’s not a great deal of democracy there”, while another says that in the time he was there, he’d never heard of anyone else nominating themselves.

That isn’t to suggest that it’s some sort of autocratic dictatorship. As one source said: “If you get to the point where people are standing against you, you’ve already failed.”

However, this coming election feels more significant. In the past, he was running to be the managing partner of a UK firm. This year, he’s going for the role in an international firm. An international firm that he built, but an altogether different beast.

Leaitherland’s ambition was always to grow DWF. Since launching its first overseas office in Dubai two years ago, it has seen huge expansion into multiple jurisdictions, including in some surprising and eyebrow-raising moves.

Since the beginning of this year, DWF has forged an association with Saudi Arabian firm Harasani & Alkhamees, established a trio of Latin American tie-ups and brought in Sir Nigel Knowles to replace Alan Benzie as its new chairman.

This isn’t all that DWF’s been up to, but it’s an eye-opening snapshot of a firm with enormous ambitions. But is everything as positive as the figures suggest?

Leaitherland’s strategy has been questioned from many corners of the legal sphere. It can be confusing for the external observer to nail down exactly what his plan for DWF is.

In fact, despite repeated attempts by The Lawyer to contact Leatherland and DWF, neither engaged to provide comments for this article to shed light on the current strategic focus.

Few will argue that DWF are a far more prominent firm than it was in the mid-2000s, but plenty from outside question the clarity of its strategy and direction.

One key issue raised time and again by numerous sources focuses on the firm’s integration, both in terms of how its traditional north-west home sits within the masterplan and how it will incorporate each new addition to the business.

“Successful businesses acquire then integrate, they allow for a period of consolidation,” says one ex-partner. “There didn’t seem to be that much integration during my time there. The big question that I had was about the relevance of the regions to London. If they can’t figure that out in the UK, how are they going to be able to handle it for somewhere like Australia?”

Despite DWF’s rapid geographic expansion there is nevertheless still a chasm between revenue generated in the UK and overseas. Data from current issue of The Lawyer UK 200 shows that the firm generated over 92 per cent of its overall revenue in the UK last year.

And while the firm’s UK-centric base should keep partners in its various regional offices happy, if the London office grows in importance there is the risk it will eclipse its regional base, disrupting a delicate balance. Indeed, there are suggestions it has already angered some partners who were proud of the firm’s regionality.

“There were some people that cherished that regionality,” one source insists. “Those people voted with their feet, which was the right thing to do, and replaced by new partners who were excited about it all. Just ask yourself: how many firms in their office locations list Paris next to Preston?”

While this was the case until April, when DWF closed the Preston office in favour of relocating the 90-strong staff to its Liverpool office, there is still a point to be made. DWF is moving away from smaller outposts and into bigger markets as its ambition grows. Leaitherland has led that push since the beginning and it will play well to DWF’s more expansionist membership.

While this view exists, it will be interesting to see where the firm makes its next round of partner promotions. In 2016, the firmed skipped London in favour of making up six partners in Birmingham, Edinburgh, Glasgow, Liverpool, Manchester and Newcastle. This would suggest a continued investment in the regions and its traditional Liverpudlian home. If the next round contains a heavy London focus, it would give a much stronger voice to those disgruntled at its flight from regionality.

As for what Knowles brings to the leadership, for one thing at least there’s no doubt it has created an interesting top two.

“Nigel’s record is uncontestable,” says one source. “Andrew’s always admired Nigel and benchmarked himself against him.”

Knowles and Leaitherland were, understandably, quick to distance themselves from the comparisons. It’s unlikely that an established figure like Knowles would have joined the firm had Leaitherland’s re-election been in doubt. Knowles gave a considerable endorsement of Leaitherland when he said: “My mandate is to support Andrew.”

The partnership was understood to have received Knowles’ appointment with excitement. There is an anticipation there for what this duo will bring.

“Nigel Knowles was received very favourably because they thought he might shake things up,” an ex-partner said. “There was surprise, certainly. But it was very well received. I didn’t hear any conjecture.”

After 38 years at DLA Piper, Knowles took the firm as far as he felt he could and it was a mutual consensus that his time had come to an end. He retired from the roles of global co-chairman and senior partner at the firm in April 2016 before retiring fully from the partnership two months later. Knowles continued to act as an external consultant and his experienced counsel will be crucial if Leaitherland wins re-election.

Will Leaitherland continue to expand the firm with Knowles offering his experience? Or will he focus on consolidation and integration? It’d be a risky bet to put your money on either strategy, but Knowles will be crucial in either eventuality.

Data gathered for The Lawyer UK 200, shows that DWF’s partnership is 275 strong. Of that number, around 69 or 25 per cent are full equity members. It is these individuals who are the key to the big decisions at the firm, although this naturally risks creating an isolating effect on the firm’s other ranks of partners.

The firm’s LLP accounts for 2016 show that there are five classes within the partnership; salaried, associate, fixed-share, senior fixed-share and equity.

Sources say that there is a growing disconnect between the upper echelons of the partnership and it could, in time, create a significant rift for the firm’s top brass to deal with.

The equity partnership at any firm is always a difficult club to break into but this is where the decision-making power resides.

“It’s so cut off from the rest of the partnership and it’s only getting worse,” insists one source. “There’s a variety of different classes in the partnership where the equity and the fixed-share members are so detached from the rest. In terms of policy and direction, that’s all taken by the full-equities. The fixed shares aren’t involved in any of that.”

The 2015 promotions showed just how tough it is to crack; not one of the five new partners were DWF lifers. Last year, the promotion round included just one former trainee. It creates a question of identity and must make the path to partnership seem achingly long for those at the bottom.

DWF has drawn comparisons with Norton Rose Fulbright and DLA for its CEO style of leadership. Leaitherland is central to the major decisions and it seems he has the backing of the equity partnership. And while it is definitely easier to get the unanimous backing of a smaller team, this is a double-edged sword.

While it does place power in the hands of the few, Leaitherland’s position as managing partner was created in 2006 as a direct result of the firm looking to become more decisive. The power to make big decisions was given to him and he’s made plenty of them since then. He has acted decisively when needed to. His backers would point to this as a mark of his leadership and in that sense, his tenure so far has been a success.

Should Leaitherland win a fifth term at DWF uncontested, it will underscore the lack of serious rivals he has at the firm. Equally, it will underline that few if any of those potential rivals are willing to challenge his power.