Member Article

Hill Dickinson raising £2.8m by partner capital call

Leading North West law firm Hill Dickinson has issued a £2.8m cash call to its partners to increase capital following a year of significant activity.

Fixed-share partners and full equity partners will be asked to contribute a further £1,000 per equity point, while the one-off contribution of £1,000 by salaried partners will remain the same.

The additional reserves are required after a year of heavy investment that included launching its Monaco office in March to support the firm’s yacht and shipping practices. Overheads also increased when a five-year rent incentive expired on its main office in Liverpool.

The firm’s 107 fixed-share and equity members will now contribute an extra £1,000 per equity point by the end of September, after the move obtained the 75% approval required from partners.

Hill Dickinson operates a modified lockstep which ranges from 28 to 70 points, after the top end was raised from the previous maximum of 60 in 2010. The firm’s 50 salaried partners will not have to make any further contribution beyond their initial £1,000 investment.

Currently, a partner on 60 points would have £300,000 invested in the firm which the firm believdes to be lower than the average partner investment at rival firms.

Managing partner Peter Jackson said: “The plan was raised with partners in a meeting in April and they have been consulted two or three times since then. Nobody likes paying more money but we’ve explained the reasons and everybody understands that it is necessary.”

The cash call has been motivated by a need to cover the costs of a number of investments, including new City offices at Broadgate Tower, the firm’s new base in Monaco, the purchase of a 30-strong defendant insurance team from DLA Piper, and more than £2m on a new IT system. More costs were incurrred as a result of the recent restructuring which saw 14 partners and 69 staff made redundant.

As part of the restructuring, the firm is selling its Chester base to Knights Solicitors. The office’s four partners will not be affected by the call.

Peter Jackson added: “This is all about investment and follows a period in which we have invested heavily in the business in a variety of areas and we need to sufficiently sustain that.”

This was posted in Bdaily's Members' News section by Simon Malia .