Jonathan Blair, managing partner of Dickinson Dees, has spent an intense nine months negotiating a major merger, as he explains to Peter Jackson.
DICKINSON DEES, the largest North East law firm, is merging with South West lawyers Bond Pearce to create a Top 20 nationwide firm.
The new firm, Bond Dickinson, will have an income of about £95m, 136 partners and 1,200 staff operating from eight locations around the UK.
Jonathan Blair, Dickinson Dees managing partner, will become managing partner of Bond Dickinson when the merger goes ahead in May, which will conclude an arduous process of negotiation and preparation which began in April.
Little wonder that, when I meet him in Dickinson Dees’ St Anne’s Wharf offices, he looks a little tired and distracted. Not that he isn’t perfectly affable, even if there is an initial reserve. He does tell me later he is nervous of journalists, which is fair enough – journalists are nervous of lawyers, too.
He is a native North Easterner, born in 1964 and brought up in Whitley Bay. He read law at Leicester University and, after law school, joined Birmingham firm Wragge and Co, where he worked for two years before joining Dickinson Dees in 1989. “I guess I was a Geordie with magnets in his boots,” he laughs. “I think it had always been in the back of my mind to come back.”
He joined as a litigator and, a year later, joined the newly-created insolvency team of two people which has now grown to number 45 and been renamed the corporate recovery group. He was made team leader after being made a partner in 1997.
He joined the firm’s board in 2004 and was elected managing partner in September 2007.
Since he joined the firm, it has grown dramatically – opening offices in Yorkshire and London.
The firm then formulated its “20:20 Vision”, which led to the 20 by 2020 goal – to be a Top 20 firm by 2020. This in turn drove the opening of the Leeds office in April 2012, moving operations across from York and transforming London from a base into a fully-fledged office with seconded partners and solicitors, alongside direct recruitment at both levels.
“The third most significant thing is the merger and the merger is not a strategy but a means of meeting the strategy,” says Blair. He explains that the growth strategy has been driven by a rapidly and radically changing market in legal services.
“It has been driven by clients. In the well-worn phrase, clients are increasingly wanting more for less. To do that they are typically reducing the number of firms they have on their panels.”
This started in the public sector, where, previously, clients would go out to tender and appoint perhaps 10 law firms across the UK to their panel.
Now, typically, that client would have no more than three or four firms on its panel. This has now been taken up by banks and other large corporates.
“If you have fewer law firms on your panel, those firms have to have the right level of resource, the right quality of people to do the work across a diverse geographic base,” explains Blair. “That, in turn, then drives consolidation, because to do that you have to make sure you have the resource level to be able to deliver when your client wants you to deliver and where they want you to deliver it. This was all post Lehman Brothers in September 2007 and it started the process of law firms looking carefully at each other.
“The legal sector is incredibly diverse, which has probably been crying out for consolidation for many years.
“The catalyst was the recession. There have been a huge number of consolidations and mergers in the last 18 months to two years and they are continuing apace. As everyone says – you can’t stand still in this market.”
Having resolved on a growth strategy, which necessarily involved merger with another firm, Blair and senior partner John Marshall began the search for a suitable candidate.
So the Dickinson Dees partners must have placed a great deal of trust in them?
“Yeah. We agreed the strategy and it was explicit in that strategy that we would look for the right merger partner, so John and I and the rest of the board had a mandate to go and deliver that strategy.
“So, yes, the partners very much trusted the board and, in particular, myself and John.”
Armed with that mandate and that trust, they had discussions with one or two firms, but it was South West-based Bond Pearce, who had been known to them for some time, who seemed the best fit.
Negotiations began around Easter 2012.
“They had a very similar view to us as to what was going on in the legal market place, a very similar view to us that this was client-led and that we needed to bulk up to have that bench strength,” says Blair.
“We had similar views around London, that London was important but neither business saw London as dominating the combined firm. You have to have a presence in London but the regions are very important to both of these businesses, to Bond Pearce in the South West and Dickinson Dees in the North East.
“Culturally, the firms are very similar. Of course, in any discussion or negotiation, when you are bringing two very sizeable businesses together, there are going to be points where you are going to have to spend a bit more time looking at in a bit more detail, but actually the process itself was relatively straightforward and there were very few stumbling blocks along the way.”
It helped that the two businesses were remarkably similar in their financial profile. Dickinson Dees turnover was £46.1m, Bond Pearce’s was £46.5m and both firms showed a profit of £12.1m.
“In a lot of mergers, the financials can be a real stumbling block, but for us they were an enabler,” says Blair.
Then they built up a business case for a merger between the two firms which met the board’s approval. The boards of both firms met and, in September, the proposal was put to the partners, who gave the go-ahead to continue with due diligence and last month gave approval for a merger.
It is a rapidly changing market for legal services, so things presumably won’t stop after merger. What comes next? A flotation?
Blair says: “At the moment, no, I don’t think so. But certainly other law firms are doing that, though typically they are practising in areas of the law where we don’t, so it’s largely insurance-led. It’s not something that’s on the radar for us, but it’s something that all law firms have to keep a careful eye on.
He says the new firm will have other priorities over the next few years, the main one being integration. “We have to spend a lot of time carefully looking at making sure you get these two businesses operating in different parts of the country working as one business. That’s going to be a big, big exercise which we’ll be spending a lot of time on over the next 12 to 18 months.
“Alongside that we want to make sure we are continuing to invest in those regions that we come from – the North East and South West. We do have an aspiration to grow the London end of the operation because we think that’s right for our combined business.”
He reveals that discussions are under way for new London premises for occupation in spring next year. The new offices will be between 20,000sqft and 25,000sqft, which is just under half the size of Dickinson Dees’ St Anne’s Wharf offices in Newcastle.
Blair concedes it’s harder for a provincial firm to make headway in the London market but Dickinson Dees has established a presence.
“In Newcastle we are dominant, in the North of England we are well-known, but in London, unless we are talking to that group of clients we already work with, then obviously we are not as well-known.
“What we have noticed, though, is that if you put the right people on the ground, then you very quickly are able to establish yourself and work.”
It has, for example, done a lot of work for Citibank in 2012 and is confident it will do more and financial institutions will be a core area for Bond Dickinson.
Blair believes they are already well on the way to a common culture for the combined firm.
“We started the conversation initially [with Bond Pearson] because we had a similar culture, values and approach to things. Both businesses put people first. I know it sounds a little bit trite to say that but this is a professional services firm, we don’t make widgets, we sell legal advice and to do that you have to have good-quality people, so you have to make sure you have the right people and that you reward them accordingly.”
After culture, the next most important area is IT integration, where work has already started.
Bond Pearce recently announced the recruitment of four partners to its oil and gas and real estate departments in Aberdeen and this is an area – both sectorally and geographically – in which the new firm plans to grow.
And, as part of the process of integration, will the new firm have a headquarters and, if so, where will it be?
“Quite a lot of people have asked about HQ and people always want to know where the HQ is and I honestly don’t know how to define where the HQ is. If the HQ is where the management team will be, the answer is that we’ll have a split site. I will be splitting my time between Newcastle – which, as it happens, will be the largest office by head count – and London, but I have a roving brief. The four of us on the core board will probably meet more regularly in London because it’s convenient.”
Back office functions will not be in London and different functions could be in different provincial offices.
He says he is puzzled why people should be so interested in the question of where the firm’s headquarters will be. I suggest that it is because Dickinson Dees has always been a major North East business.
“Although, for many many years, more than 60% of our turnover has come from outside of the North East region,” he says. “I agree with you, there is a perception that we are the heavyweight in the region but, actually, for many years, a significant proportion of our business has come from outside the North East.
“We are proud to be based in the North East and our presence here is not in any way going to diminish and we will continue to invest in the North East. I’m a Geordie born and bred.”
Blair lives in Jesmond, Newcastle, with his wife Sarah and children Joseph, 17, and Lucy, 13, who have doubtless seen little of him this year as he has criss-crossed the country negotiating and planning the merger.
When he relaxes he plays the drums in a band called Dashboard Elvis.
“It’s for pleasure but we do a lot of charity gigs, and we do 30ths and 40ths and the odd wedding and that sort of thing.”
As we speak he also has Christmas to look forward to.
“I’ll down tools at 5pm on the Friday before Christmas and my plan is to switch off, hopefully play the drums, go running and then come back refreshed in the New Year.
“Then – as someone said to me – the hard work starts here.”
What car do you drive?
I spend most of my time travelling on trains so I hardly have any time to drive.
What’s your favourite restaurant?
Sale Pepe in Jesmond, Newcastle: great Italian food, lovely staff and good prices.
Who or what makes you laugh?
I used to love Eddie Izzard but you hardly ever see him now. He was in a beautiful drama on TV last year called Lost Christmas. If they repeat it make sure to watch it!
What’s your favourite book?
Too many to choose from! Different books at different times of my life. Those that would make the top 10 are Fair Stood the Wind for France; The French Lieutenant’s Woman; Tess of The D’Urbevilles; Birdsong; Child in Time; The Time Travellers Wife; Nice Work.
What was the last album you bought?
I love music and pick up albums and tracks all the time. It’s all a bit too easy to download! The last album I downloaded, though, was by one of my favourite bands, Danny and The Champions of the World. It’s called Hearts and Arrows and if you like a bit of alternative rock have a listen!
What’s your ideal job, other than the one you’ve got?
When I was a kid I wanted to be a footballer but then I realised you had to be good at football to do that. Nowadays, a drummer in a touring band but you probably need to be good at drumming for that.
If you had a talking parrot, what’s the first thing you would teach it to say?
“If your face wants to smile, let it. If it doesn’t, make it.”
What’s your greatest fear?
Running out of time.
What’s the best piece of business advice you have ever received?
Someone once said to me, “It is irresponsible to make decisions without all of the facts and then once you have all of the facts, it is irresponsible not to make a decision.”
And the worst?
Another person said, “Sometimes, if you don’t do anything, decisions just make themselves”. That always struck me as avoiding your responsibilities.
What’s your poison?
A pint of Farne from The Ship in Seahouses.
What newspapers do you read, other than The Journal?
I tend to keep up to date through Sky news online! I occasionally read The Times and “i”. And every week I receive a copy of “The Week”. It’s a great publication which pulls together all of the week’s news from all news sources, from the trivial to the serious all in one place.
How much was your first pay packet and what was it for?
I used to clean cars with my brother on a Saturday morning. We had a decent business by the time we hung up our sponges. Although I think our business model might have been flawed. We charged £1 a car – inside and out – which meant 50p each.
How do you keep fit?
Running, gym and playing the drums.
What’s your most irritating habit?
Playing the drums.
What’s your biggest extravagance?
Which historical or fictional character do you most identify with or admire?
Musicians and sportsmen and women tend to be my heroes. The majority of what they do is “away from the track or pitch” or “off stage”. This year’s Olympics gave us so many fabulous examples of skill and sheer hard work. I think we were all so impressed with the likes of Chris Hoy, David Weir, Johnny Peacock and Jessica Ennis. You don’t win gold medals without 100% commitment to the cause.
Which four famous people would you most like to dine with?
John Lennon. Boris of Kathmandu – a Russian ballet dancer who travelled to Kathmandu to set up a restaurant there in the 1950s. He is also credited with opening Nepal up to the West in the 1950s. Heinrich Harrer, an Austrian climber who was the first man to climb the north face of the Eiger, and tells the story in his book The White Spider. Eddie Izzard to make me laugh and, if there was room for one more, Jessica Ennis.
How would you like to be remembered?
As someone who didn’t run out of time.