"It feels like a tipping point": Growth fund buys out BCLP's stake in LOD
Growth private equity investor Bowmark Capital is to buy out Bryan Cave Leighton Paisner’s circa 60% stake in LOD (Lawyers on Demand), as the management of the alternative legal services arm looks to accelerate its recent growth and take advantage of a “tipping point” in the market.
LOD, which was co-founded in 2007 by former Berwin Leighton Paisner partner Simon Harper and head of recruitment Jonathan Brenner, was spun out in 2012 – six years ago on 1 June – when BLP held between a 70 and 80% share in the flexi legal resource company.
Two years ago, LOD merged with AdventBalance – the largest ‘new law’ merger to date – and BLP’s share was reduced to 62%, which Bowmark has now acquired in its entirety.
There has long been a desire among the LOD management for further significant investment and it would appear that BLP’s merger with Bryan Cave has acted as a something of a catalyst in achieving that (although see below senior partner Neville Eisenberg’s comments on that point). Speaking to Legal IT Insider, Harper, who is managing director of LOD, said: “We’ve been thinking about this for a long time – well before BLP looked at its merger with Bryan Cave – and it was about acknowledging that there’s a sense that the market is changing. Our main client base is inhouse teams and the way they are looking at doing things differently is accelerating. We felt there is an opportunity and a need to reflect that, which needed investment.”
LOD opened in Dubai last year and Germany this year and Harper said: “We need to continue that international growth.”
Furthermore, LOD’s managed services work is expanding and Harper says: “We’re putting in teams of lawyers and giving it a wrapper of technology and project management and data and that has grown really quickly, so we continue to invest.”
LOD’s core secondment business also continues to grow and Harper says: “It felt like it was an important time in the market. It feels like a tipping point and we wanted to make those investments. BLP has been brilliant but it’s time to take on a different sort of investor and one that has invested in these sorts of businesses before.”
He adds: “One of the nice things is the huge amount of interest we’ve had in the business and alternative legal services, so that we could take time to choose the person that was right. What Bowmark were buying into was the existing team and the plans and the direction the business is taking. There will be no immediate changes – they like the business and the people.”
BLP, which will continue to work with LOD, was the pioneer of the flexible lawyer resource model – one that has been followed by law firms including Allen & Overy, Pinsent Masons and Addleshaw Goddard. Eisenberg told us: “This is about the market opportunity which LOD faces and the best way of equipping them to make the most of that.
“To grow and take advantage of the market opportunity takes finance and the right backing and it was felt by everyone that a new investor would give them the capital they need to help achieve that. The discussions took place before the merger: that wasn’t really a driver. It was far more connected to LOD’s growth strategy and their plans.
“Nothing has changed in terms of our access to LOD’s flexible resource pool and we will continue to be a customer. As LOD thrives and grows we feel that we will continue to benefit from that.”
In August 2017, LOD posted a 15% hike in turnover in the first full year results after the merger with AdventBalance, with turnover up to £35m for 2016/17.