Law firm DWF targeting biggest clients to drive further growth

DWF Manchester

Manchester-based international law firm, DWF, is aiming to boost revenues with a range of measures, including squeezing its biggest clients.

Last week the firm announced it had achieved revenues and profits increases in the first half period, to October 31, 2022, with turnover rising by 4.2% to £212.1m, while pre-tax profits of £12.9m represented a 17.1% improvement on the previous year.

Following this, senior management, including chief executive Sir Nigel Knowles and chief financial officer, Chris Stefani, made a presentation to analysts from investment bank Panmure Gordon, detailing the group’s future strategy.

Analyst, Robert Plant, revealed that management believe more can be done to achieve structural growth by working closer with DWF’s biggest clients.

He said: “DWF has around 6.5k clients, but 400 comprise 80% of revenue and there was a recent focus on the 100 top clients, and this set generated 11% organic revenue growth in FY22, and now the next 300 are the focus.

“Management gave the example of a client which is in the top 25 of UK listed firms, whose annual revenues with DWF have increased from around £1.5m to around £5m.”

He said pricing can also be raised, given management’s understanding of DWF’s market position, where the company is scoring highly in net promoter surveys and, through its client listening programme, is rated as offering good value for money.

Recently, the company has put through 10% price increases in some areas which have largely been accepted by clients.

Mr Plant added: “DWF also seems to be gaining market share, as shown by it winning more roles on panels.

“In half one 2023, the company won more than 30 new panel appointments. Management said that having both an increasing global presence and offering more than just legal services is helping with legal appointments.

“Clients are also reducing the number of firms on their panel. Management said that another anecdotal sign of gaining market share is the number of high quality partners the company has attracted recently from other large firms.”

DWF also believes it can make annual savings of £10-£12m, at a one-off cost of £3m, through streamlining the business. Mr Plant said: “We note that the cost/income ratio continues to improve each half year.”

Panmure Gordon has a Buy recommendation on DWF’s stock, and Mr Plant said: “Structurally we see upside especially from market share gains, international expansion and further operational improvements and we believe that the shares are cheap.”

At the time of the briefing, DWF’s shares were trading at 78p. Panmure Gordon has set a 138p target.

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