Poacher or Gamekeeper?

It has been a very good year for most large international law firms with increased revenues and profits generally par for the course. But things have not been quite so good at Philadelphia-based Dechert. The latest results from the AmLaw100 show an unusual disparity in the firm’s performance compared to many of its peers.

True, Dechert’s 2017 revenues increased by a healthy 7% to $977.9m, but the firm’s profits per equity partner (PEP) were down by 10% last year to $2.3m – one of the largest percentage declines of any law firm listed in the Top 50.

The factors affecting a law firm’s financial performance are invariably complex. However, Dechert’s relative malaise is perhaps characterised by the long running problems it has faced in relation to its London-based head of litigation, Neil Gerrard.

A former Metropolitan Police officer in London who later prosecuted for the Department of Trade and Industry, Gerrard read Law at what is now Manchester Metropolitan University in England. By 2011, he had become co-head of litigation at DLA Piper in London. In April of that year, Gerrard left DLA to join the London office of Dechert as co-head of the firm’s global white-collar litigation practice. The move immediately provoked DLA to initiate arbitration proceedings against Gerrard in May 2011.

According to legalweek.com, the issue in dispute was whether Gerrard had “violated DLA’s non-compete policy by failing to serve a period of gardening leave. Having initially informed DLA and his clients that he was leaving the firm on 22 April, Gerrard formally joined Dechert on 23 April – despite DLA requesting a longer notice period that included gardening leave.”

Unusually, Gerrard remained listed as a partner on both firms’ websites for several months as DLA refused to transfer client records to Dechert for matters he had been working on. In October 2011 Dechert went further, filing a writ of summons in a Philadelphia court relating to Gerrard against DLA’s US and UK operations. Eventually in December 2011, DLA and Dechert settled both the UK arbitration and US litigation.

Even so, things did not stop there. Gerrard’s move brought other problems which continue to the present day. Following his arrival, Dechert had taken over a lead role on an internal investigation into allegations of corruption at a subsidiary of Eurasian Natural Resources Corporation (ENRC), a mining company that was then listed on the London Stock Exchange. The allegations were made by a whistleblower relating to the operations of one Kazakh subsidiary. Having originally secured the company as a client of DLA in December 2010, Gerrard brought the ENRC mandate with him to Dechert when he joined.

As well as an anonymous whistleblower letter sent to the UK Serious Fraud Office (SFO) in July 2012, there have since been numerous public allegations of Gerrard colluding with the SFO and leaking confidential information provided to Dechert by ENRC at the time when it was a client. In March 2013, ENRC fired Dechert. A month later, the SFO confirmed that it had taken over ENRC’s internal investigation, and had launched a criminal investigation into ENRC concerning allegations of fraud, bribery and corruption. Since then, ENRC has also been fighting the SFO in the English courts. The most recent Court of Appeal hearing which took place in July may have significant implications for legal professional privilege.

Gerrard’s role has, allegedly, been pivotal throughout, particularly in relation to his conduct of ENRC’s internal investigation in 2011-13. Among the allegations made is that he leaked highly confidential information to a Times journalist in London. As a result, the Times published a story relating to ENRC in August 2011. Recent correspondence from Hogan Lovells, the law firm now representing ENRC, details what ENRC asserts as “clear and cogent evidence establishing that it has potential claims against the SFO arising out of impropriety in its dealings with Mr Gerrard.”

On June 28th 2018, Hogan Lovells wrote to the UK Attorney General in relation to the SFO’s conduct and its relationship with Gerrard. This followed previous letters to which the SFO had not responded. Specifically in relation to Gerrard, the letter states: “It is entirely inappropriate for the very same team at the SFO to be investigating the SFO’s own historic wrongdoing, including serious allegations of collusion with ENRC’s former solicitor (Gerrard), whilst at the same time continuing to conduct the ongoing investigation into ENRC.”

The letter continues:

“In the light of the discovery that Mr Gerrard was responsible for the leak to The Times in August 2011 in order to “kick start” the investigation, and the evidence that ENRC has now obtained from Keith McCarthy, who wrote to ENRC immediately following the appearance of the article in The Times, ENRC maintains that the SFO must have been alerted in advance to the article and may even have encouraged Mr Gerrard’s conduct in leaking its confidential information to the press.

“Amongst other things, ENRC relies on the wider pattern of dealings between Mr Gerrard and the SFO including a series of potentially incriminating and damaging disclosures to the SFO without the company’s knowledge, authority or consent. Numerous examples have come to light of communications between Mr Gerrard and the SFO which call out for explanation, including instances where Mr Gerrard pre-agreed self-serving messages that he wanted the SFO to convey to his client, so as to ensure that the scope of his work was unrestricted and increase the fees that he was able to charge.”

The SFO declined to comment on these allegations.

A Dechert spokesperson said: “We stand by the work we did and look forward to the opportunity of defending it in open court. We note that the criminal investigation by the Serious Fraud Office into ENRC is continuing and deplore ENRC’s attempt to discredit that investigation by seeking now to publicise unwarranted allegations against Dechert and its personnel. We emphatically reject any suggestion of an improper relationship between Dechert/Neil Gerrard and the SFO or that there was any unauthorised disclosure of information to or from the SFO. The work we did during our investigation was with the authority and knowledge of the members of the independent committee of the board which was instructing us at the time. We shall in the ensuing court proceedings fully address these unfounded allegations.”

In addition to addressing these allegations Dechert seem to be willing to throw some mud. When ENRC first began its action against Dechert, a spokesperson for the firm said the following: “We shall in the ensuing court proceedings fully address these unfounded allegations and in the process expose the inner workings and conduct of ENRC and certain of its personnel which precipitated the lengthy and ongoing SFO criminal investigation.”

As Master Rowley concluded in his judgment in the ENRC v Dechert case: “The question of putting confidential information into the public domain in witness statements and their exhibits in circumstances where third parties were clearly interested in that information is, on the face of it, contrary to the case of Nationwide Building Society versus Various Solicitors [1999] PN LR 52 and as such would call for an explanation.”

Such an approach to a former client’s confidential information is unlikely to instil confidence in existing or prospective clients.



The information regarding profits is factually incorrect.
Dechert’s gross revenue in 2017 reached $977.9 million (an increase of 7.3 percent over 2016), revenue per lawyer was $1.054 million (up 5.9 percent over 2016), and profits per equity partner grew 5.3 percent in 2017 to $2.7 million. The numbers cited in this article were taken from an incorrect source.
– A spokesperson for Dechert



Dominic Carman

Written by:

Dominic Carman, journalist, writer and legal commentator.


Author: Dominic Carman