Business of Law Firms
Axiom DWFM to acquire Ince​

By Jake Rickman​

What do you need to know this week?

In this week’s Business of Law Firms series, we will look at the announcement that UK law firm Axiom DWFM has reached an agreement to acquire The Ince Group (“Ince”), which was placed into administration a few weeks back.

According to an article published by The Lawyer, the administrator appointed to manage Ince’s administration process “implemented a sale of the Group’s business and certain assets” to Axiom DWFM. Ince will operate as a separate brand and business from Axiom DWFM’s own operations.

Ince’s CEO, Donald Brown, released a statement following the announcement (as reported in The Lawyer article) which observes that the acquisition will provide Ince’s legal business with a “simple and clear corporate and capital structure” to continue trading.

In a separate statement, the managing partner of Axiom DWFM Ltd, Pragnesh Modhwadia, noted his confidence in Ince’s lawyers and its reputation and “market positioning” in certain legal specialisms, likely referring in particular to Ince’s aviation and shipping work, for which the firm is generally well-regarded by professional ranking publications like Chambers.

Separately, LegalCheek has reported that Ince’s trainee solicitors are no longer at risk of their contracts being terminated. This is despite earlier reports which initially stated that the trainee contracts had been terminated following Ince’s financial difficulties.

Axiom DWFM is a relatively small law firm with specialities in mid-market commercial disputes, private client work, and real estate. Likely owing to the comparatively smaller size of its business in terms of revenue, Axiom DWFM does not publish a full set of financial accounts with Companies House, as do larger law firms.

Why is this important for your interviews?

We have addressed in previous articles the commercial basis for distressed acquisitions of law firms and their practice groups. Axiom DWFM’s acquisition of Ince’s various business divisions and assets will doubtlessly serve as a case study for future explorations into distressed sales within the legal sector.

The fact that Axiom DWFM has decided to acquire Ince and keep it as a separate brand under its ownership is an interesting commercial decision.

For one, it indicates that Axiom DWFM’s leadership is confident that the brand itself is worth preserving and flies in the face of the notion that the Ince brand is finished (as certain other commentators have opined). This is because Axiom DWFM would presumably have had the option to simply acquire Ince’s fee-earners, including associates and partners, to port them into its own branded operations.

However, by purchasing much of Ince’s business assets, including its brand, it suggests Axiom DWFM has purchased the firm “as a going a concern”, which is a commercial and accounting term that refers to all the intangible “goodwill” that may ultimately increase the value of Axiom DWFM’s investment than if it had just lifted certain practice groups into its own operations. For instance, as part of the purchase, Axiom DWFM will presumably have acquired the benefit of the firm’s data management system (DMS), which is a vital asset for all law firms because it contains client files and much of a firm’s “know-how” (notes, research, etc.).

Separately, the nature of Ince Group, which was structured as a publicly traded company, suggests that it might have been more straightforward to acquire its various assets than under a partnership model. (In fact, Axiom DWFM is itself structured as a limited company rather than a limited liability partnership).

Finally, it is important to bear in mind that distressed purchases by their nature describe businesses that are purchased because they are in financial difficulty. This almost always entitles the buyer — Axiom DWFM in this case — to a steep discount relative to the potential value of the business because of the upfront risk in acquiring a financially distressed business.

Putting aside the financial difficulties that have plagued Ince for several years to various degrees, it is undeniable that the firm has a strong shipping and aviation practice, competing with the likes of HFW and Stephenson Harwood in this respect. As the new “shareholders” of the Ince brand, Axiom DWFM stands to benefit from a section of the legal market it has not previously had much (if any) standing within.