In a strategic move signalling its entry into the legal arena, professional services company DSW Capital has acquired Surrey-based DR Solicitors for £6.1 million, marking a significant expansion beyond its financial roots.
DSW Capital, known for its focus on finance and accountancy, has embarked on its first legal sector venture by acquiring DR Solicitors, a fee-share law firm. This acquisition is seen as a major step in establishing a substantial platform for the delivery of legal services, aligning with DSW’s ambition to attract entrepreneurial professionals keen on developing their own businesses.
Operating under the Dow Schofield Watts brand, DSW runs a network of professional services firms and employs a licence model. This model allows its 25 licensee businesses to utilise the brand while accessing DSW’s network, with the potential for startup funding and back-office support. In return, DSW typically receives a 22% share of the licensee’s revenue and occasionally profits, recording a turnover of £16 million in the previous financial year.
The acquisition of DR Solicitors, which focuses on advising primary care providers such as GPs and dentists, is a strategic move to diversify DSW’s revenue streams and reduce reliance on the cyclical SME M&A market. DSW describes the acquisition as ‘game-changing,’ not only for its immediate earnings impact but also for the diversification it brings.
DR Solicitors, established in 2003 by solicitor Daphne Robertson and accountant Nils Christiansen, operates a unique consultancy model that does not require its consultants to generate their own work. This approach saw the firm becoming one of the UK’s first to adopt such a structure, achieving revenue of £3.1 million and profit before tax of £1.2 million in the year ending March 2024.
James Dow, CEO of DSW Capital, highlighted the acquisition’s potential to enhance earnings and diversify revenue, creating resilience and opportunities to expand into new markets. His vision involves leveraging the Dow Schofield Watts brand and resources to accelerate DR Solicitors’ growth and to build a diversified platform for niche legal services.
The acquisition also marks a new chapter for DR Solicitors, with its management team, led by Robertson and Christiansen, continuing at the helm. They have received a combined £4.3 million in cash and £1.8 million in shares, reinforcing their commitment to staying with the firm for the foreseeable future.
Shrutisha Morris, DSW’s deputy, recently joined the company, bringing her expertise from a legal background, marking this acquisition as a strategic entry into the legal sector. Morris expressed confidence in DR Solicitors’ business model, which aligns well with DSW’s ethos of autonomy and flexibility, thus providing a fitting addition to their professional services group.
DSW has expressed its intention to scale their model through organic growth, expanding geographically, introducing new service lines, and investing in breakouts from larger firms. This acquisition is a clear indication of DSW’s strategy to integrate diverse professional services, aiming to create a robust multidisciplinary organisation.
The acquisition of DR Solicitors by DSW Capital represents a calculated step into the legal sector, aiming to establish a diversified and resilient platform. By aligning with DR’s business model and leveraging its unique consultancy approach, DSW anticipates significant growth and expansion opportunities, thus reinforcing its presence in professional services.
