Times are tough in Newcastle. The council is implementing a ‘scorched earth’ policy to public spending cuts that has generated nationwide headlines. And the city’s football team – always a bellwether of the civic mood when 50,000 attend every home game – is hovering uncertainly above the Premier League’s trapdoor.
Not that the locals are cowed. People from the north-east are, of course, renowned for their pride and indefatigability. The Gazette’s photographer tells me that a pub near St James’ Park called The Strawberry has been renamed ‘La Fraise’, in honour of the many obscure Frenchmen signed up to revive Newcastle United’s fortunes.
John Marshall, senior partner at regional mainstay Dickinson Dees and a regular in the ‘Dickies’ corporate box at United, identifies the same tendency among the business community. ‘North-east businesses are resilient,’ he says. ‘We have had to go through painful transitions in the past, as the area’s industrial heritage demonstrates. But then we never experienced the unprecedented "highs" of the boom, so the impact of the downturn has perhaps not been as acute as in other areas. ‘Yes, the cuts are being felt, but our economy is diverse and at its heart is manufacturing. A lot of export trade is going through the ports of Tyne and Tees, which is encouraging. Recovery from recession will be manufacturing-led, and the north-east starts from a position of strength.’
We meet on the day that a quarterly fall in GDP is announced, raising the spectre of a ‘triple-dip’ recession. Like many others, Marshall would like George Osborne to revisit the coalition’s so-called ‘plan A’, though he acknowledges that turning things around is not as straightforward as sanctioning ambitious infrastructure projects. ‘Steps will need to be taken to kickstart the economy,’ he says, ‘but one of the problems is that, although many projects are talked about, they need to be "shovel-ready" to make a difference. Not many are.’
The appetite of north-east business people for renewal is evident in the splendid riverscape visible from Dickinson Dees’ elegant Quayside offices. This takes in the sullen hulk of the former Baltic Flour Mill across the water in Gateshead, now an art gallery, and Newcastle’s own Millennium Bridge. The same appetite is evident, too, at Dickinson Dees, which only last month agreed a merger with south-west firm Bond Pearce that it hopes will propel the firm into the upper echelon of UK firms.
The deal is, as Marshall concedes, ‘almost eerie’ in its symmetry – a true merger of equals. In 2011/12, Bond Pearce reported turnover of £46.5m and Dickinson Dees £46.1m; while profit per equity partner came in at £235,000 for both. At present, Bond Pearce has 77 partners, while Dickinson Dees has in recent months seen its number rise from 53 to 62, incorporating a number of lateral hires in corporate and banking at Dickinson’s nascent Leeds office. These hires included Pinsent Masons’ local office head Mark Owen.
Dickinson Dees has five offices (the others are at Stockton on Tees, One Trinity in Newcastle and London’s Farringdon). So too does Bond Pearce (including an outpost in Aberdeen – Bond last year ended talks with the Scottish outfit Maclay Murray & Spens that would itself have created a £90m turnover-plus firm). There are also obvious synergies between practice areas. The firms are roughly equivalent in respect of corporate and property, with Dickinson more prominent in finance and Bond Pearce in litigation.
The merger stems from the Legal Services Act of six years ago, which led Dickinson Dees to instigate a wide-ranging review of its activities. This culminated in its ‘20:20 Vision’: and an aspiration to be a top-20 firm by 2020. The Leeds office opened in April 2012, to which operations were transferred from a now-closed office in York. In 2008 the firm had already offloaded its volume property arm D3 Legal to the UK’s largest volume firm, Optima Legal. ‘We could see the direction the market was heading and decided D3 was not going to be part of our core offering,’ recalls Marshall.
Dickinson Dees’ repositioning has been painful, involving redundancies, but for Marshall it was business-critical: ‘We could see that the legal market was not going to grow in real terms, and that if we were to grow it would not happen organically and incrementally. We needed to take work from other people. The goal of becoming a top-20 firm is a metaphor for significant change and expansion. We are not obsessed with our position in the law firm "league table", as that’s only a function of turnover. We wanted to build a sustainable and profitable business.’
The plan was always going to involve mergers, and perhaps acquisitions too, and for what now seem like obvious reasons Bond Pearce looked like the perfect fit. ‘We liked the people we met at Bond Pearce,’ he says. ‘There was a commonality of vision. We were complementary in terms of both geography and practice area.’ Having ‘decommoditised’, if one can describe the divestment of D3 thus, one might suppose Marshall and the combined firm will not be too concerned by the proliferation of alternative business structures. Yet this remains on the firm’s planning horizon.
BORN Newcastle upon Tyne
UNIVERSITY Law, Durham
JOBS trainee, Dickinson Dees, 1989. Made partner in 2000. Appointed head of commercial disputes in 2007. Elected senior partner in 2010
KNOWN AS a long-time pillar of the north-east business community. Co-architect of the Bond Pearce merger, with Dickinson Dees’ managing partner Jonathan Blair
Marshall says: ‘Given the regulatory delays, I think it’s probably a little too early to say what the full impact [of liberalisation] will be. But all law firms recognise that when large corporate and consumer-focused organisations like the Co-op and RAC enter your market – and even though you may not be directly competing with them – this will have a "ripple effect" that will affect the market as a whole.
‘In particular, as lawyers, we have to get used to the fact that we will be working in different ways. Law firms recognise now that a lot of the work they would have regarded as specialist 10 years ago is work that is already, or will become, more commoditised. Firms have to make a clear decision as to whether they want to continue to do that work, in which case they need to engineer themselves to do it, or whether in reality they want to step back.’
Marshall cites the example of a corporate management buyout, which ‘not too many years ago’ would have been seen as highly specialist, but is now on the way to becoming a commoditised ‘product’. ‘One of the things that attracted us to Bond Pearce was both firms recognised that, in certain areas of our businesses, we needed to deconstruct what we were doing and deliver to our clients the service and quality they expect, at the right price,’ he says.
When the merger takes effect on 1 May, the newly minted Bond Dickinson will be the UK’s 38th-largest firm by turnover, which Marshall describes as a ‘strong platform to develop from’. The managing partner will be his long-time colleague and collaborator Jonathan Blair, currently Dickinson’s managing partner. Bond Pearce chairman Nick Page will become chairman, and Bond Pearce managing partner Victor Tettmar executive partner. Marshall will be vice-chairman on the four-strong executive leadership team.
Blair, a one-time Wragges lawyer who briefly worked in Birmingham before joining Dickinson Dees in the same year as Marshall, has described himself as ‘a Geordie with magnets in his boots’. He runs the business on a day-to-day basis and the pair share responsibility for strategy. It is a very well established senior team at the north-east firm. ‘Jonathan has progressed through the firm as I have,’ says Marshall. ‘We work well and effectively together, and that’s one of the features of my role that I enjoy most.’
There are no plans yet for non-executives at Bond Dickinson, though this has not been ruled out. ‘The priority is to work well as a leadership team and consider how and whether somebody in that role could help us,’ he adds. Marshall is coy about next steps otherwise, amid speculation that the combined firm will be keen to establish a significant international presence, whether through wholly owned offices or relationship arrangements.
He says: ‘The clients we act for have international operations and in many cases are owned by companies based overseas, so we recognise we need to have a credible international offering. We will develop an international strategy as a matter of priority, working with partners to get clear agreement on our plans.
‘But we are realistic in not trying to run before we can walk. This is something that will be client-led.’