1 June 2012

Biggest debt recovery firm eyes acquisitions and is “open” to external investment

The country’s largest specialist debt law firm – which went live a few weeks ago – is on the acquisition trail and is also open to the idea of outside investment, its chief executive has revealed.

Drydensfairfax was created by the merger of Drydens Lawyers – formerly Hammonds’ debt recovery unit – and Fairfax Solicitors, a management buy-out of the unsecured debt recovery unit from Eversheds.

The firm, which is expected to turn over in excess of £16m this year, currently handles around 500,000 cases with a live debt value of almost £1bn. With over 330 staff across its two sites in Bradford and Leeds, it claims to be the largest firm of its type in the UK.

Chief executive Philip Holden told Legal Futures that he was looking to expand the business, with debt recovery work at its height when the country is coming out of recession as buyers have the liquidity to purchase assets.

“We are looking at a number of opportunities on the acquisition trail,” he said.

Mr Holden acknowledged that businesses such as drydensfairfax – large, scaleable, and handling commoditised work that is not partner dependent – are seen as the ideal candidates for external investors looking at the law. “I’m not against the idea of [becoming an] alternative business structure,” he said. “The door’s always open but we’re not advertising ourselves.”

He added that the firm has only scratched the surface of the “massive” debt recovery market, noting that his institutional clients prefer to instruct a law firm rather than an unregulated debt recovery agency.

Last month drydensfairfax hired Sue Nickson, chief operating officer of the London office of US firm Squire Sanders, to take on the role of director of legal. She was one of the original investors when Drydens de-merged from Hammonds in 2003.

Ms Nickson’s appointment completes the senior level team at the firm, which now consists of seven former Hammonds, DLA Piper and Eversheds lawyers, and two director-level non-lawyer appointments in finance and operations.

Ms Nickson said: “The next two years will be interesting for law firms that have chosen to specialise in specific areas and where there is significant growth potential when combined with non-law business activities.”

 

By Legal Futures

Tags: ABS, Alternative business structures, debt recovery, external investment