Add a bookmark to get started

Abstract view of canyon
21 July 202050 minute read

DLA Piper calls the tune: “We have the clear intention of building the leading global practice in Ireland”

This news article was originally published by The Currency and is reproduced here with permission.

A year after its Dublin launch, the multinational's ambition of building the definitive international legal services firm in Ireland is undimmed. Managing partner for Ireland David Carthy explains what sets DLA's offering apart from the competition.

When David Carthy Zoom calls me, it is from his holiday home in Waterford. It turns out he is not on annual leave. Instead, he has locked himself away in a room to work full-time while the rest of his family gets on with enjoying a staycation in the not so sunny south east. The perks of remote working. “I swapped one rainy location for another rainy location,” he jokes.

Back in Dublin, DLA Piper’s offices at Stephen Court (which used to house Anglo Irish Bank headquarters) have remained empty for the most part since the government began introducing lockdown measures to combat Covid-19 in March. Staff had only moved into the space weeks earlier having been in temporary digs since the firm’s formal launch in Ireland the previous May, an event marked by a glossy, well-attended drinks reception at the Guinness Storehouse. Former US senator, Northern Irish peacemaker, and indeed one-time DLA Piper chairman George Mitchell was the guest speaker.

DLA Piper is one of the biggest law firms in the world with offices in more than 40 countries and global revenues last year of EUR2.74 billion. When it arrived in Dublin, it was with truckloads of ambition.

The new offices, 10,000 square feet in size, were indicative of the firm’s plans to scale up rapidly towards its goal of having around 100 lawyers on the ground in Ireland.

But for now, the covid era prevails. Homeworking remains the norm for all office workers and to some degree, Ireland’s larger law firms have been feeling the economic chill. None has anything remotely as deep as the pockets of a legal services behemoth like DLA Piper which has been able to honour all its financial commitments to staff.

Being out of the office is familiar territory for Carthy who spent his early days with DLA Piper working from his kitchen table. He says agile working arrangements meant that the firm’s 45-strong legal team, which includes 11 partners, was able to hit the ground running when the pandemic struck. International Zoom conference calls and remote working were already part of their ordinary business lives. He is, however, grateful that the Dublin team had time to gel before the pandemic hit. “We’ll explore ways of getting back into the office over the next while, as things change and as confidence grows,” he says.

Before leading the Irish based team at DLA Piper Carthy earned his chops as a top-class corporate lawyer with experience in foreign direct investment, technology, life sciences, and financial services. Born in Dublin, he studied Law at Trinity, before moving to the USA where he continued his legal studies at the University of Chicago Law School. Barrack Obama was lecturing there at the time but their paths never crossed. Carthy then moved to London to take up a post in the multinational law giant Freshfields Bruckhaus Deringer before returning to the top five Irish law firm William Fry where he worked as a partner.

For the last two years, Carthy has been building up DLA’s full-service law practice, putting together a diverse team that reflects the firm’s global vision. Partner hires include poaches from the likes of Dillon Eustace, A&L Goodbody, and Matheson. But DLA has also brought in UK talent from London based firms Bird & Bird and Norton Rose Fulbright. This chimes with Carthy’s beliefs on the importance of a diverse workforce in a globalized economy. The core offering is in areas such as finance, intellectual property (IP), tax, life sciences, and real estate.

In this interview with The Currency, Carthy discusses:

  • DLA Piper’s business model and the advantages for clients
  • The globalisation of the Irish law market 
  • The business challenges presented by Covid-19
  • Why Irish law firms need to embrace diversity in a global economy
All over the world

Francesca Comyn (FC): What sort of staff figures are you up to now in the Dublin office?

David Carty (DC): We have 58 people in the office at the moment. We’ve grown fairly rapidly, and obviously we took a decision to grow organically not to merge with another firm but to build, person by person essentially. And so we now have 11 partners. I think we have something like 45 lawyers overall and 58 in total in the office. We’re very pleased with how we have grown and also in some ways we may be quite fortunate with the timing. We had grown and had got people together, and had melded as a team. Then covid hit. All that social glue we developed, we’ve been able to fall back on.

As recently as November 2019, DLA’s stated target for the Dublin office was to deliver a practice of 100 lawyers and business professionals over the next few years. Carthy says covid probably will have an effect on projected growth timelines in that while the practice will continue to grow, it will do so at a more modest pace.

FC: So have you had to let go of anyone or have there been salary cuts or anything along those lines since March? Or maybe there have been apprentices for example who have been told, ‘okay, we hoped to take you on but that’s not necessarily looking realistic now’?

DC: Clearly covid is an evolving situation and while we are tracking well at this point in time, who knows what the future might hold in terms of the pandemic and everything else. I’ve had to communicate with staff all the way along not knowing what’s in the future. But we have been fortunate to be able to live up to our contractual promises in full to our staff. We haven’t cut salaries, we’ve committed and we are paying the bonuses that people have contractually earned. In terms of salary review, we’ve postponed that for six months, but otherwise it’s absolutely business in full. We’re busy. The first prime rule in terms of management was the commitment to our people. And we’ve lived up to that. We’ve noted, obviously what’s going on in the market but we always knew we had a very different business model to what’s going on in the market, and we’re happy that thus far our business model has been very resilient both globally and in Ireland.

FC: What makes it different, from an Irish perspective?

DC: So first of all DLA Piper is a global business, and it’s an integrated global business. We are in over 40 countries globally and they’re all on the same balance sheet. We’ve a separate US business but the rest of the world is all one balance sheet, which means unlike say PwC or Dentons or otherwise they’re not separate balance sheets you’re not trying to negotiate with your colleague somewhere else about whether you’ll do it, and who will share the benefit. If I work with Irish clients and we refer work to Brazil or Poland or we continue to work with them, there’s no incentive for me to hang on and do work in Ireland as there might be in other models. So from that perspective an entirely globally integrated business does make us relatively unique. And for those who say it’s not unique, try building a globally integrated business and see how long it takes.

We were using Skype and Zoom constantly anyway as part of our daily working life because our colleagues are all over the world as well as Dublin

FC: What are the benefits to clients of that model? Is it mainly financial?

DC: Better service. It’s not a case of a bunch of people who are not used to working with each other who don’t know each other or otherwise trying to behind the scenes split the benefit in some way that is not apparent to the client. And the other thing we’d say in terms of differentiation is a focus on sector expertise, and obviously if you’re an entirely Irish business, you can’t do that to the same extent because Ireland is a very small country. And while we have our strengths in certain niches, you’re not going to find a mining expert in Ireland. It’s difficult to find the same renewables level of expertise as you might have elsewhere. We have deep sector expertise, and it’s necessarily drawing on that global depth. So there’s different experts all over the world and we can draw on them for clients. Whereas before people would have talked about sectors and said ‘oh that’s very interesting, that’s become really really relevant during the covid crisis because one of the things that come through really clearly is that crises has hit different sectors in radically different ways. There are some sectors which are doing better as a result of what has happened and there are some sectors who are decimated by it.

Feet on the ground

FC: Looking at your partners, they work in intellectual property, tax, and so on. The DLA offering in Dublin, it’s a multinational offering essentially isn’t it? Do you have much engagement with domestic Irish businesses?

DC: People come to DLA because they want to access our global reach. They also come to us because they want global best practice in their sectors. To give you an example of that, we’ve done a lot of work with AIB on their outsourcing. AIB is an entirely Irish focused business but they want best practice in terms of tech outsourcing, and they believe that that requires global expertise and being able to import that.

Carthy won’t go into the nuts and bolts of what a bank like AIB may need in respect of its tech outsourcing. He simply notes the increased focus on tech processes within the financial services sector. No surprises there as traditional financial institutions scramble to take on the challenges of new FinTech technology while grappling with their own legacy systems. Scandals like Wirecard aside, the FinTech sector has been a huge area of growth in recent years from digital payments (PayPal and Stripe) and lending (Affirm, Fundbox, Avant), to RegTech tools to handle compliance issues including offerings from Irish firms like AQMetrics and Corlytics.

DC: To get on to your point, we act for a lot of the multinational businesses. We also act for a lot of multinational large businesses that are trying to do work right around the world. And we act for businesses who are international trying to do work in Ireland and domestic businesses. By and large, there are areas where we can do the work, and other law firms can also have equally good credentials. And then there are areas where we feel that our credentials and our strengths far surpass what’s in the market. That’s the niche we are talking about.

FC: Did you have those clients before landing in Dublin or is that something that’s evolved because you’re on the ground – when you talk about AIB for example?

DC: Both. But we’ve needed to explain our story. I mean it’s quite interesting. People’s understanding of Irish legal services is limited by geography. For clients internationally, Ireland is a very different market in that regard. Ireland is only starting to have global law firms. So, we have the clear intention of building the leading global practice in Ireland and I think we’ve done that so far and we’ll continue to grow and continue to push on. But for a lot of clients, they’re only used to working with a hodgepodge of different law firms. They have their Irish advisors, they have their US advisors. Most people looking at their problem don’t divide it up by geography, they just look at their problem, and how to do it. So that’s why we built ourselves the way we are and that’s why when we talk about a different business model, that’s the difference and it has all sorts of effects. It has an effect on the talent that comes to work with you. It has an effect on the kind of client who wants to work with you, where people perceive advantage. It’s not just a sort of tagline. And it has a huge effect on how you work. We were using Skype and Zoom constantly anyway as part of our daily working life because our colleagues are all over the world as well as Dublin, whereas for people in Dublin working in Irish practice, they had to learn to use those by and large because they were used to working right beside their colleagues and now they are not.

In many ways, the successful Irish law firms could have globalized themselves, but didn’t

FC: You came in on a wave of foreign law firms entering Ireland, whether because of Brexit or otherwise. This appeared to be part of an overhaul of Irish legal services and the trend looked like it would probably continue. Maybe it still will but I’m curious what your opinions are. Do you think firms considering entering the Irish market will put their plans on hold? There’s so much uncertainty. I’ve spoken to other Irish law firms in the last few weeks and while they were saying business is good in certain sectors, it’s not exactly a buoyant time especially when it comes to bringing in new business.

DC: There are a couple of questions in there so just to unpack them a little. In terms of, let’s say, non-indigenous law firms that have come into the market, there were definitely the law firms that appeared to have a Brexit play and were therefore focused on niche sectors. You’ve got your domestic law firms that are Irish and have no intention of growing outside that. They have been profitable over a period of time but now things will have to change. You’ve got the international firms that are really focused on funds and certain districts like Cayman such as Maples and Walkers, and you’ve probably got law firms that have entered Ireland for specific aspects of work, some of the insurance law firms like Simmons and others that are in that area. And then you’ve got your law firms that are global.

So obviously DLA Piper is by far the largest globally [top ten global law firm Dentons has deferred its Irish launch until September]. Brexit was not the reason. We have multiple sectors, as I described to you earlier on, we’re full service. If anything the most enthusiastic people about the Irish offering when we were opening up, was the American practice which had absolutely nothing to do with Brexit. Brexit is a part of the environment we have to deal with. I’m currently president of the Irish Exporters Association. It’s hugely relevant to our business and it’s relevant to our business in what we see in terms of navigating for our client, but it never was the strategic reason why we’re doing things. You know, DLA Piper has a track record of going into lots of markets. The real anomaly is, why had the Irish market not globalized before now?

FC: And your views on that?

DC: Well you know that’s a very complicated question, and in many ways, the successful Irish law firms could have globalized themselves but didn’t. So that’s the first reason. Lots of other Irish tech businesses went abroad and did all sorts of stuff, the Irish law firms didn’t. And therefore the services they were offering the market became more limited to the clients over time. I think one of the bigger reasons why things have changed is the functions that international firms have in Ireland have largely grown from a manufacturing base to further up the value chain services like IP, and you know legal teams, large legal teams started to be built here. Now you have senior decision-makers who are making decisions in Ireland for EMEA, and for Global Services. They are sitting in Ireland and they’re making those decisions here and then they’re looking across the market and saying who do I choose, there’s this contact in London, there’s this contact in New York, and there’s this group of people in Ireland. What we want to do is to bridge those together. And that was the opportunity that we saw, and others have seen that as well and followed in on that.

Your question about whether there will be significantly more firms coming into the Irish market. It’s interesting. I’m not sure that there will be but who knows? I think there will be other people coming in to look after niche offerings, but on a broad base like DLA Piper? We’ll see. I’d say covid may have slowed that down a little bit.

Like most large law firms, DLA Piper takes a sectoral approach to business, cutting its cloth to service the demands of clients. While some sectors like tech and life sciences are thriving, others such as aviation and the hospitality sector are being decimated by the impact of Covid-19. Then there are areas like funds and asset management which have remained largely unhit by the effects of the pandemic. But is there room to develop new business?

Playing the hand that’s dealt

DC: Your point about winning new business, we have been winning new business. There’s no point in saying, ‘oh, let’s just wait until we can meet somebody for a coffee’ because that was clearly not going to happen. We have found access to clients to be really good. Clearly people aren’t traveling as much, they have more time, and they’re available on Zoom. We’ve been talking to clients a lot, helping them a lot, and clients are coming to us because they’ve been looking for expertise on what’s happening in different countries, and how to navigate problems. I mean we’re all in uncharted territory, and therefore the broader the palette you can draw from in terms of trying to get a solution, the better. So, we found that good. Of course it’s a challenge, but it’s about getting your mindset in the right place and about adapting and that’s what we said we would do, and that’s the bar we had to live up to so that’s what we are doing.

FC: As managing partner, you would have a good overview of the challenges faced by clients. Some of course might have shored up reserves and have their eyes on the future in terms of strategising.

DC:I think the first thing is that it is hard to strategise. In normal times, you like to think that you have an ability to plan ahead on the basis that the future is going to look somewhat similar to the past. This has been really challenging, you have a little bit of a greater ability to do it now, but it’s still limited. There’s a whole lot of things we don’t know about. I was talking to a client about the effect of what’s happening in Hong Kong and China on their businesses, there are a whole load of uncertainties out there. So it’s a very interesting time but it is hard for companies to strategise. Companies are cautious. It’s about looking after their people and communicating to their people, that’s a core focus for people. It’s a very mixed bag, and clients are very excited about operational issues, You can only really deal with strategic issues if you’ve got the operational and day to day under control and the operational and the day to day have become hugely more challenging than they were before.

There has been a flood of experts filling our newspapers, with lots of comments, often contradictory about what’s going to happen in the future so who knows?

FC:The recession is expected to be quite lengthy one so there’ll be a battening down of the hatches but say, to take a random example, if you’re in commercial property or something like that and you’re feeling a bit queasy about potential devaluation of property in the coming years, is there not an incentive in some instances to act sooner?

DC: If you look at commercial property, we expect to see a lot more work on the infrastructure side the government is committed to it, there’s a need for it in Ireland so we expect to see a lot of that. And on the data centre side, you can see that Ireland has done well out of that sector and you can see that the increasing global demand, even local demand, for that has grown through all this stuff so you can see the areas that you’re trying to predict that you expect to see a little bit busier and then and then as regards commercial property and offices, I mean who knows? There’s an awful lot of predictions out there. There has been a flood of experts filling our newspapers, with lots of comments, often contradictory about what’s going to happen in the future so who knows? I think we have to sort of watch that and see. A lot depends on, you know, in terms of the office thing for our own staff a lot depends on what is most efficient and what do our people want. Even for ourselves. I mean, you and I, on this call, there’s so much change that it’s hard to get used to. It’s hard to give your informed view on this stuff until you sort of say ‘well let me get back in the office and then I’ll see what balance might make sense for me between the office and home’. So we’re committed to having more flexibility, but exactly where the level is going to be, I think that’s a little unclear yet.

FC: Earlier, you touched on something I thought was interesting. I didn’t want to interrupt you, but you were talking about Irish firms not expanding internationally. You’ve worked in the domestic law market and in the UK and America. Was that in your view a missed opportunity? Because obviously some of the big firms do have outposts whether it be in New York or London, they have offices abroad, but are you saying there is a lack of ambition?

A conservative old-school image

DC: I wouldn’t really comment any further, I think I say I was trying to draw a distinction between the business model that we have, which we’re very confident with which has always been to follow what our clients want and we feel our clients want deep sector knowledge, they want global best standards, and they want an integrated service. So they want the combination of a local relationship and people who can work with them, and they want the ability to do that with global reach. And as I said, the sector knowledge is far more relevant than the geographic distinction. If you talk to an average in-house counsel. It’s just not really relevant. But it’s like going into a shop and realising that to get red paint you have to take all these other paints and put them together so you can get red, it’s a bit like that. And so yeah I wouldn’t comment. The business pursued by the domestic law firms have been extraordinarily financially successful and all the rest but for my part I am far more comfortable with our model going forward in the future.

I mean, people coming from other legal markets look at the Irish legal market and they’re shocked at the lack of diversity.

FC: Do you think the Irish model, the traditional model will be resilient in the future, or do you think it faces challenges?

DC: I think it faces challenges. I mean the premise of coming into this market was always that clients wanted more choice. They were telling us, absolutely directly they wanted more choice. They wanted to see the benefits of technology and innovation. They wanted to see change, and they wanted to see diversity, and none of those phrases hang too easily around aspects of the Irish legal market. So it’s a matter of a period of change and, and I think some of that stuff will come and people will adapt to it, some of the Irish market will adapt to it really well, and those businesses that adapt to all of that will be resilient and the ones that don’t, won’t.

FC: You worked in Freshfields in London. What was the most obvious difference working in a big firm like that outside Ireland? Did that experience influence your decision to join DLA when that opportunity came along?

DC: I think it did. I mean I studied in Trinity, I was brought up in Dublin. I did further education in the US, and qualified in London. I worked in London for a bit and came back – like a lot of Irish people regardless of the sector – with the ability to work abroad. It broadens horizons, it broadens the mind. And it teaches you a few things. It teaches you what you’re good at. It teaches you what you may not be so good at. And it gives you a degree of confidence that you can go toe to toe with the Americans or in the UK or whatever. So that’s what it did I suppose and it gave me a global perspective that I always try to follow with my clients.

Our businesses have gone on a journey of being tremendously more globalized than they were 20 years ago or 30 years ago. So, some of those changes, you asked me why are those changes happening now, why did they not happen 20/30 years ago. Those changes to the Irish legal market are coming from outside the Irish legal market. And like a lot of markets, it needed that choice and change to come from outside because it was very very slow coming from within.

It is nearing the end of the interview and I ask Carthy a somewhat pro forma question about Brexit and whether legal services in Ireland can reap a dividend from the UK’s departure from the European Union. It is a legitimate question given that the last government backed an initiative, chaired by former taoiseach John Bruton, to travel abroad and pitch Ireland as an international legal destination for contracts and dispute resolution. While Carthy believes the initiative is worthy, he thinks several shortcomings in the legal offering need to be addressed first, including the lack of diversity in Irish practice, a point rarely mentioned in the Brexit law debate and one he believes is key when it comes to delivering results for clients.

DC: I think, for it to profit I think you need to have an awful lot more coordination between the industry in Ireland, between the Bar, between solicitors, the different firms etc. But I think the big thing that needs to happen is that you can’t just seek additional global work to come to Ireland, and at the same time, not change. So, if you want to embrace the benefits of globalisation, you need to adapt. There needs to be far greater diversity. I mean, people coming from other legal markets look at the Irish legal market and they’re shocked at the lack of diversity.

FC: When you say diversity, what does that mean? What does that look like?

DC: I mean at the very basic level people coming from different backgrounds, you know, male, female, appropriate combinations that reflect society. But also in lots of other areas. If you look at multinational businesses, if you look at the Irish banks they’ve all been led by Australians and English people and a myriad of people from different backgrounds. You look at the Irish law firms, they’ve all been led by Irish people and very few of them have been led by women.

I think law has a conservative old school image that is going to need to change if it’s going to continue to get the talent that it needs into it. I think from our perspective as a business, we want to take talent from as many diverse backgrounds as possible because we want to avoid groupthink, which can be very prevalent in our society if you take people from the same backgrounds, even the brightest people and put them together. We want to develop people from different backgrounds, different countries because they have different ideas, different ways of thinking about things.

So is DLA Piper walking the walk? After our conversation, I asked the firm to provide a breakdown of its 58 staff in terms of diversity. The reply was as follows: “At DLA Piper Ireland we have 5 nationalities represented among our team which is also very close to a 50/50 male /female split. At more senior levels we are exactly 50/50 when you look at partners & legal directors together (which is our closest approximation to the stat most domestic law firms give for their senior team). Among our partner team (which is all equity) we currently have 7 male and 4 female partners.“

The firm also has trainees joining this September from Scotland and the Czech Republic. Carthy is the first to admit they are not there yet. “Have we a long way to go? Yes, we do. Has law as an industry a long way to go? Yes, even to get people in to train and be educated and to choose to be a lawyer. But if you don’t start delivering results, and start talking about it, there’ll never be any change.”