The “digital law firm” set up by the former boss of DWF has acquired an Australian practice as the first step to roll out its model internationally.
Arch.law, the brainchild of Andrew Leaitherland, has acquired 15-lawyer Nexus Law Group, a dispersed law firm with physical offices in six Australian cities, adding to the 35 lawyers arch.law already has in the UK.
The acquisition is being self-funded by arch.law via a purchase of shares.
Mr Leaitherland said: “The acquisition of Nexus Law Group enables arch.law to embark on building an international and scalable platform enabling our clients to benefit from a high-quality team of legal advisors combined with leading-edge technology.
“There are many positive synergies and opportunities within the Australian market to drive the digital law firm model and we are looking forward to working with the highly skilled team at Nexus to deliver legal solutions differently to our clients.”
Whilst CEO of DWF, Mr Leaitherland built its Australian business to over 200 people in three years.
He added: “I know the opportunities available in the APAC region and am looking forward to building another substantial digital law firm model in the southern hemisphere.”
He indicated that further international expansion was on the cards: “This is a first step towards the internationalisation of the arch.law brand enabling us to support our clients cross border.”
Marcus McCarthy, who founded Nexus in 2014, will be continuing in arch.law Australia as a portfolio member. Lawyers work at arch.law either as portfolio members with their own clients, retaining 70% of their fee income, or as resource members – lawyers who are provided with work either centrally or by portfolio members.
Mr McCarthy said: “We operate an almost identical structure to arch.law and all our interactions prove a strong cultural alignment, which was important to our team in moving forward with this.
“I am very keen to assist the expansion of the arch.law business in Australia and continue what I believe is one of the most innovative and beneficial operating structures for quality lawyers to work together anywhere in the world.
“Together, both businesses now have a supercharged platform for growth in Australia and beyond, well into the future.”
Arch.law is unusual in also bringing together a group of ‘preferred partner’ businesses to offer clients a range of services, both legal and technological, that arch.law cannot.
They include The Legal Director, a law firm that provides SMEs that do not need full-time legal directors with experienced commercial lawyers to work in-house on a contract basis, and Farillio, which offers start-ups and small businesses access to legal documentation and advice on a monthly subscription.
Meanwhile, Mr Leaitherland’s old firm, DWF, last week announced a 3% rise in revenue to £173m for the six months to 31 October. Adjusted profit before tax was up 40% to £19m, with the listed firm’s gross margin increasing 1.7 percentage points to 51.3%
However, DWF’s net debt rose to £77m, which it put down to the repayment of Covid pay deferrals, settlement of deferred consideration and a one-off outflow for the restructuring of its Australian operation.
Chief executive Sir Nigel Knowles said: “We have continued to see strong revenue growth on a like-for-like basis, after the decisive action taken in the prior year to exit or slim down a number of businesses.
“We have seen an improvement in our gross margin and a reduction in our overheads relative to revenue. This has led to a compelling step-change in profitability. Our client proposition of providing integrated legal and business services is gaining traction and leading to a strong pipeline of instructions.”