The boss of the world’s largest law firm has more targets in his sights

Britain’s most ambitious legal empire-builder bounces into one of his firm’s 11th floor meeting rooms in its modern London headquarters near St Paul’s – Sir Nigel Knowles, who has built DLA Piper from humble beginnings into a global powerhouse, is in the middle of completing another merger. Luckily for us, he is keen to talk.

The sprawling international firm announced it would merge with Australia’s DLA Philips Fox, with whom it has had a referral relationship for four years, at the end of last month. The deal will make DLA Piper the largest law firm in the world by revenues, with annual sales of $2.2bn (£1.4bn) and 4,000 lawyers in 70 offices across 31 countries.

“We have known these guys for a long time,” says the stout, silver-haired Knowles, crackling with energy. “We have worked together for years. There have been no surprises or shocks in this one.”

Around 1,000 of the firm’s partners will conclude voting on the deal today, and if over 75 per cent of them approve it, as expected, the merger is set to be completed on 1 May.

The Australian firm will join DLA Piper’s international business, which covers everything outside the US, and which Knowles heads as one of the firm’s two co-chief executives. The other is Lee Miller, who leads the firm’s American practice.

But there should be little doubt that Knowles is the beating heart of the outfit. When he became managing partner of Broomhead & Neals in 1996, after joining from university in 1978, it was a local Sheffield law firm with 600 staff and annual sales of £52m.

But Knowles embarked on a dizzying series of deals over the next 15 years that grew the firm in the UK, Europe, the US and around the world. The key deal that put the firm on a global stage came in 2005 when DLA (as the UK business was then called after a number of acquisitions) merged with US rivals Piper Rudnick and Gray Cary Ware & Freidenrich.

Although Knowles is proud of the size the firm has grown to, he is clear that its goal is not to merely imitate leading US White Shoe practices or one of the five Magic Circle firms in the City, who specialise in large complex mergers and acquisitions or capital markets transactions.

“Our ambition is not to become the sixth Magic Circle firm,” he says. “We want to be the leading business law firm. We want to service the local, regional and multinational needs of large corporates.”

He adds: “We don’t want to be the firm that comes in for the odd job. We handle lower profile work like a company’s real estate portfolio, or litigation, or employee pensions issues. Magic Circle firms do not have the diversity we have – nor do they want to.”

DLA Piper hopes to achieve this balance through its organisation into seven practice groups, with its top four – corporate, finance and projects, real estate and litigation and regulation – accounting for 73 per cent of the partnership’s sales.

And even though the ink is not yet dry on the Australian merger, Knowles has an eye on where he might go next.

He says: “No one firm has more than one per cent of global legal market spending. There is plenty of room for consolidation. I feel that is the direction of travel. And if this is the case, I would rather lead than follow a trend.”

Knowles makes no secret that he would like to see the firm grow to 5,000 lawyers across 75 offices, although he does not commit to a timeframe.

He points out that 85 per cent of the world’s wealth is in G20 countries and that top law firms “have to follow your clients” into these countries. He says he is looking at opportunities to get into Mexico and Canada. The firm is also monitoring the legal market in fast-growing economies in India, South Korea and Indonesia, which currently operate restrictions on foreign law firms operating in their domestic markets.

Knowles thinks the financial crisis will have a lasting effect on the legal business. He says the decade-long run of fat fees for banks and law firms for M&A and capital market deals “will never be repeated”.

He adds: “Three to four years ago the boot was on the foot of law firms, but now the boot is on the foot of the client. Corporates have cut their rosters, and inhouse teams are doing more work themselves to save money.

He continues: “That means a law firm has to develop a closer relationship with the client. If you can become a trusted business adviser, they are more likely to tell you what’s on their mind earlier. You must become part of their team.”

Post the financial crisis, Knowles thinks we will see “a two or three speed recovery” over the next 18 months or so, with the US growing at around four per cent. He says that the UK market will be flat, but adds that his strategy means that he is “confident we can grow by taking market share”.

In G20 countries in Latin America and Asia he expects growth to continue at the rate of between eight and 10 per cent we have seen in recent years – Knowles says he’s actively looking for deals in these regions.

With St Paul’s winking in the sun behind him a restless Knowles insists: “There’s a lot more to see from us yet.”

Few would bet against that.

Age: 54

Work: Joined Yorkshire firm Broomheads as a trainee in 1978; became a partner in 1984, specialising in corporate finance, private equity and mergers and acquisitions; appointed managing partner in 1996; led the firm on a series of mergers, the most significant coming in 2005 when DLA tied up with US firms Piper Rudnick and Gray Cary Ware & Freidenrich; merger with Australia’s DLA Philips Fox made group the largest law firm in the world by sales

Education: University of Sheffield, read law

Family: Married, three children

Lives: House in East Sussex, flat in Chelsea

Hobbies: Theatre, cinema, dining out, a member of Wentworth golf club and plays off a nine handicap