AIM-listed DSW Capital plans to double the number of lawyers in its legal arm following the acquisition of Dr Solicitors
The chief executive of DSW Capital has said that expanding its recently acquired legal arm is a major priority for the AIM-listed professional services group, with the immediate goal of doubling the number of fee earners. Speaking to Legal Futures, Shru Morris said the company’s investment in DR Solicitors last year has accelerated growth and created a platform for a wider move into the legal market.
DSW Capital, best known for its network of finance and accountancy firms operating under the Dow Schofield Watts name, entered the legal sector late last year through a £6.1m acquisition of the Surrey-based practice. DR Solicitors is a fee share firm that focuses on healthcare work and has one of the longest track records in the sector, having operated since 2003.
A half-year trading update last week reported that DSW’s revenue rose by 32% to £10.3m for the six months ending 30 September. The group said the increase was driven both by the acquisition of DR Solicitors and by expansion across its existing network of licensee businesses.
DSW operates a licensing model that differs from the traditional partnership structure. The business currently has 24 licensee firms employing 144 fee earners across 12 offices. These licensees are permitted to use the Dow Schofield Watts brand, although not all choose to do so, and they can access shared resources and support services offered by DSW. In return, DSW receives 22% of the licensee’s revenue and, in some cases, a share of profits.
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Since joining the group, DR Solicitors has expanded from 20 to 26 lawyers. Ms Morris said DR has been able to grow its work in specialist dental matters, supported by the wider DSW network. More importantly, she said, the acquisition was designed to provide a foundation for DSW’s broader push into legal services.
Ms Morris said the focus is now on attracting ambitious lawyers who want to establish their own operations within the group as licensees, as well as lawyers or teams who prefer to work as consultants through DR Solicitors. She noted that further acquisitions are not the priority at this stage, with the emphasis instead on organic expansion through recruitment.
Although DR Solicitors operates as a fee share firm, its model differs from many in the market because lawyers are not required to generate their own work. Ms Morris, who previously spent seven years at North West firm Napthens as finance director and later chief executive, said the DSW network contains financial incentives to encourage work referrals between businesses. She said that if enough work is referred internally, the license fee can in theory be offset entirely.
Ms Morris said DSW measures shareholder value primarily by the number of fee earners within the group. She said the goal is to reach 200 fee earners in short order. Growth in DR Solicitors is expected to play a central role in meeting this target, and she confirmed that the aim is to double the number of lawyers in the firm.
She said that while the market contains many options for lawyers looking to join fee share practices, DSW is confident in the distinctiveness of its offer. She said the group generates significant levels of client work and that many lawyers are attracted to the opportunity to concentrate on delivering legal services without the pressure of generating that work themselves.
The founders of DR Solicitors, Daphne Robertson and Nils Christiansen, together hold 12.75% of DSW Capital’s shares, making them the second largest shareholders in the company.