To some, former Linklaters chief Tony Angel is the most successful law firm manager of a generation. During his ten-year tenure as managing partner of the Magic Circle firm, he transformed it from a London-based practice into a global, moneymaking powerhouse. But his critics claim he went too far in his quest to make Linklaters more businesslike, and that by placing a premium on profits and imposing a more tightly managed structure, he damaged the historic firm’s culture.
The partners at DLA Piper will soon discover which assessment of Angel rings true. Last October, the firm announced that the 59-year-old former tax attorney was coming out of retirement to become its new global cochairman and international senior partner. Angel, who will be making about $3 million a year for a three-year term, has been tasked with molding the global giant into a more streamlined, profitable, and cohesive entity.
The question now is whether Angel, who retired from law firm management in early 2008, can pull off a repeat performance. A lot has changed in the legal profession since then, and DLA Piper is entirely different from Linklaters. The latter is a 174-year-old blue-chip firm that retains a more centralized structure. DLA Piper, by contrast, is a midmarket, full-service firm that grew through a tidal wave of combinations and is now a sprawling hodgepodge that lacks financial integration. (Like Baker & McKenzie and the recent batch of trans-Atlantic mergers, the firm is organized as a Swiss verein—essentially a holding structure that lets participating entities maintain their existing forms.)
“DLA has achieved a hell of a lot over the past ten years—the naysayers need to remember that—but they’ve got to a certain point in the market, and that progress has slowed,” says former Clifford Chance managing partner Tony Williams, now head of law firm consultancy Jomati. “Tony will help push through that glass ceiling, but whether one person can do that remains to be seen. He certainly can’t just wave a magic wand and make things change overnight.”
Angel comes into the job with a strong resume. When he took control of Linklaters in 1998, it was already one of the top practices in London. When he left the firm ten years later, to take a senior position at credit ratings agency Standard & Poor’s, its revenues had increased by 385 percent and average partner profits by 167 percent, and it had cemented its reputation as a world leader.
Much of Angel’s success at Linklaters was due to his ability to take concepts and practices from the business world and successfully transplant them within the confines of an organization that, like most law firms at the time, was fairly lightly managed. He pioneered a more rigorous and quantitative approach to performance management, narrowed the firm’s practice to focus on doing more profitable work for fewer, larger clients, and established a new executive committee to help him implement his strategy—an operational template that would be mimicked by firms throughout the city.
Chief among Angel’s goals at DLA is to solve the firm’s long-running integration issues; bolster its underweight corporate and finance offerings in London, Paris, and Germany; strengthen the firm’s presence in Asia; and weed out the legacy clients and practices that are unwanted remnants of its merger-filled past.
DLA’s international practice is the cumulative result of a staggering 31 mergers, acquisitions, and joint ventures—21 of which have taken place since 2000. Its vast network spans 76 offices in 31 countries, and its army of 4,200 lawyers makes it, by head count, the largest firm in the world. (Revenues of $1.96 billion in fiscal year 2010 were enough to place it third on last year’s Global 100.)
“We probably get too much stick for this, but there’s no doubt that we are still far too siloed,” says one London-based DLA partner, who spoke under the condition of anonymity. “After the merger, everything was about coming together to be one firm globally, but that slowly faded away. Management absolutely hates it when people label us a franchise, but in some respects it’s a pretty accurate description.”
In fairness, DLA already has procedures in place for its U.S. and international branches to share costs relating to joint initiatives, such as new office launches and Angel’s lofty salary. The firm is also investigating proposals to convert its U.K.–based partnership to the same all-equity model it operates in North America, and last spring its U.S. and international arms adopted their first-ever joint strategy. The plan calls for partners on both sides of the Atlantic to target the same leading national and multinational corporations—such as Kraft Foods Inc. and Pfizer Inc., which currently retain DLA in a range of areas—and to work for this select group of clients across a greater number of practice areas and geographies.
While Angel stresses that DLA is not looking to become another Linklaters, he nonetheless predicts that it will begin to challenge the major law firm players more regularly when it comes to premium transactional work. DLA co–CEO Nigel Knowles believes that it is already doing much better on this front than many give it credit for, pointing to deals such as advising Banco Santander on its €2.9 billion ($3.8 billion) acquisition of Polish financial institution Bank Zachodni WBK, and its representation of an Asian consortium on the £5.8 billion ($9 billion) purchase of EDF’s U.K. electricity distribution assets. (Both deals were completed in 2010.)
But while it’s true that DLA is an increasingly common fixture among the upper echelons of the end-of-year deal rankings, a closer inspection of the data highlights just how far behind the firm is compared to its competitors. DLA was not present on any of the ten largest M&A deals of 2011, and although it racked up 347 such transactions globally—more than any other firm in 2011, according to Mergermarket Limited—the average size of those deals was just $167 million. Baker & McKenzie, which has arguably been more successful in realizing DLA’s integrated service mantra, had an average M&A deal size of almost twice that at $330 million.
As DLA attempts to close that gap, some partners—and potentially even offices—may find that their practices no longer meet the grade.
“There will inevitably be areas of the business that don’t fit, and there may well be instances where it’s better for people to part company than trying to get oil and water to mix,” says Angel. He insists that it is “far too early” to say whether any regional bases are likely to close as a result, adding that “having offices in lower-cost centers can turn out to be a significant advantage, if you manage it right.” But several current partners, who asked not to be named, say that a number of office locations are under intense scrutiny.
The spotlight is most strongly focused, they say, on Central and Eastern Europe, which has seen other international firms withdraw from the market in recent years, as well as on DLA’s extensive band of regional U.K. offices—excluding London, the firm currently has five offices in other English cities and another two in Scotland. (Global cochair Frank Burch insists that the firm’s network will continue to expand, however, adding that a host of new jurisdictions—including Canada, South Korea, and Mexico—are currently being considered for future office launches.)
Clearly, Angel has his work cut out for him. “It’s a bit like a jigsaw puzzle,” Angel says. “Some of the pieces are missing, some aren’t quite the right shape, and others probably shouldn’t be in the box at all, but the important thing is that we’ve got an incredibly clear vision of what the finished picture should look like. It’s my job to help put it all together.”
In doing so, DLA may finally go from being a jumble of merged entities to an aligned business that’s more than just the sum of its parts.