Mallender: Proven model
AIM-listed professional services business DSW Capital has launched a branded legal division after the law firm it bought 18 months ago reported strong results.
DSW, which owns a network of finance and accountancy firms under the Dow Schofield Watts brand, entered the legal market in November 2024 with a £6.1m deal for Surrey firm DR Solicitors, a fee-share firm focused on healthcare.
It will now form part of DSW Legal, which is headed by new recruit James Mallender, formerly a director and head of recruitment at The Legal Director, a law firm which provides part-time in-house counsel to companies.
He will be looking to hire partners and teams to join DSW’s fee-share model.
A trading update last week said DSW’s revenue for the year to 31 March was expected to be down 12% to £23m, a hit trailed in March because of the sudden drop-off in mergers and acquisitions (M&A) due to the Iran war.
Adjusted group EBITDA is likely to be in line with revised market expectations at c.£1.6m for the year, with adjusted profit before tax of c.£1.4m.
March is traditionally an important month for M&A completions, ahead of the tax year-end, but “the outbreak of war with Iran has severely impacted M&A activity in the UK, with many deals the group expected to complete in March being aborted or postponed until the long-term economic ramifications of the war are established”.
The acquisition of DR Solicitors was part of the group’s strategic drive to diversify away from a historic reliance on M&A and the law firm grew 11% over the financial year, adding 10 consultants to its team.
Network chief executive Shru Morris said: “Whilst it is frustrating that the robust performance achieved in the early stages of FY26 stalled in the second half, the board’s strategic aim continues to focus on growing the business and building a resilient and diversified group of licensee businesses.
“The acquisition of DR Solicitors and its subsequent growth, reducing the group’s dependency on M&A activity significantly, demonstrates this strategy in action, with M&A in FY26 accounting for 34% of total income, down from 57% in FY25.
“Our FY27 focus will be on attracting additional licensees and consultants, driving new business at DR Solicitors, and launching DSW Legal.”
DSW Legal will focus on “recruiting legal professionals with ambitions to set up their own business, with the backing of an established professional services brand” – it is targeting lawyers across sectors to build out the network’s full business advisory platform.
Other than those who specialise in healthcare – who will work under the DR brand – the lawyers will work through DSW Legal.
Mr Mallender said: “I’ve seen firsthand how ambitious professionals are increasingly looking to alternative models to take control of their career.
“DR Solicitors has already proven itself as a model that can stand up against traditional models, providing the flexibility and control many look for, so the opportunity to expand this track record across DSW Legal provides a true challenger platform for the industry.
“I’m now focused on building out the offering, recruiting ambitious legal professionals who want the opportunity to be more entrepreneurial while still benefitting from a supportive environment with a strong brand and back office.”
Having been 70p at the start of the year, DSW’s share price fell to 45p in March on the news of the likely fall in turnover and has been steady since, closing yesterday at 46p.
Also on AIM, fee-share firm Keystone Law has launched a £1.5m on-market share buyback programme.
Funded from existing cash resources, “all shares repurchased will be held in treasury with a view to using such shares for the purpose of fulfilling commitments under the group’s long term incentive plan or will be cancelled”.
Keystone’s share price is around 565p and there are more than 31.5m shares in issue.
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