LLP Group Governance

The LLP Group Board (the Board) recognises the benefits of a modern and efficient governance structure. High governance standards provide clarity and rigour, but also enable speed and efficiency in the decision-making processes of the Group. The Group’s parent, DAC Beachcroft LLP (the LLP), is a partnership, but the Group governance framework has voluntarily been modelled, where appropriate and applicable, on the FRC’s UK Corporate Governance Code. Not being a listed Group, the governance description that follows has been set out against the Wates Principles.

Our governance has been approved by the equity partners (Members) of the LLP and is set out in the Group’s constitutional documentation. Whilst a small number of decisions remain reserved to the Members, the Board has responsibility for the management of the Group. Anything that is not reserved to Members, the Board, or its committees is a matter for the Managing Partner who is supported by the Group Executive (the Executive).

Whilst the members of the Board are not statutory directors, there are subsidiary statutory directors within the Group. As a matter of good practice and to ensure an aligned consideration of stakeholder interests across the Group, the duty in s172 of the Companies Act to promote the success of the company has been adapted for use by the Board. The Board recognises the importance of ongoing two-way dialogue with our colleagues and other stakeholders, illustrated by the high levels of stakeholder engagement described below under Principle 6.

Principle 1: Purpose and leadership - an effective board develops and promotes the purpose of a company and ensures that its values, strategy and culture align with that purpose.

The Group’s Purpose, Vision and Cultural Principles have been approved by the Board and published on the Group’s website. The Group’s Purpose is to help our clients and our colleagues succeed, creating sustainable value.

Development of strategy is undertaken by the Executive and Board in alignment with the Purpose, Vision and Cultural Principles, as well as with an embedded consideration of risk. Our Purpose, Vision and Cultural Principles have also been written into the role descriptions of all Board members and they have been embedded across the organisation via training, visual reminders and an ongoing recognition of good practice.

We recognise colleagues’ contributions to the support of each other, clients and the community through the Group’s ‘Our Purpose Awards’; every award illustrates how we are achieving ‘Our Purpose’, helping our colleagues and clients to succeed and bringing our values to life. Nominations are put forward by colleagues and awards are made, culminating in an overall award in each category that is presented by the Senior Partner and Managing Partner.

Serving as a protection of our values there is a whistleblowing procedure in place through which colleagues can raise concerns and report any misconduct, wrongdoing, breaches of law or regulations and unethical practice. The Board oversees the management of the reputation of the Group. The strength of the Purpose, Vision and Cultural Principles underpins this together with an embedded consideration of reputational risks in matters considered by the Executive and the Board.

Principle 2: Board composition - effective board composition requires an effective chair and a balance of skills, backgrounds, experience and knowledge, with individual directors having sufficient capacity to make a valuable contribution. The size of a board should be guided by the scale and complexity of the company.

The Board has ten members:

• the Senior Partner (the Chair),
• the Managing Partner,
• the Chief Financial Officer,
• five elected Board members, and
• two independent non-executive Board members (NEDs).

The Senior Partner, Managing Partner and elected Board members are all Members. The non-executive roles are appointed by the Board. Whilst the selection of most of the Board members is by election by the Members, the Remuneration and Nomination Committee and the Board do consider the particular skills needed on the Board in advance of elections and communicate these to the Members.

Equity, Diversity & Inclusion is a fundamental element of our People Strategy and the Group firmly believes that diversity of experience, perspective and thinking is critical to its ability to create sustainable value and this is reflected in the current Board. To measure the outcomes of our Equity, Diversity & Inclusion approach, an internal voluntary target has been set at 40% for female representation across the senior leadership team in our business by 2025. In support of this, attention will be given to addressing any factors within our control that make it more difficult for our female colleagues to progress on merit at the same pace as male colleagues. The gender balance on the Board itself as at 30 April 2023 was 50% female (30 April 2022: 50%). The five elected Board members represent a mix of sectors and legal services in the business.

The NEDs bring independent judgement and their own expertise, one being an accountant and financial expert, and the other an expert in organisational change and leadership. Both devote sufficient time to make a valuable contribution.

Principle 3: Director responsibilities - the board and individual directors should have a clear understanding of their accountability and responsibilities.

The Board’s policies and procedures should support effective decision making and independent challenge.

Our Governance Handbook establishes clear lines of accountability and responsibility between Members, the Board and its committees, the Senior Partner and Managing Partner/the Executive. Full matters reserved and terms of reference are set out in the Governance Handbook, as well as detailed Board role descriptions and election processes. The roles of the Senior Partner (one of whose responsibilities is to chair the Board) and the Managing Partner (who has executive control over the management of the business) are clearly separated.

The Chair ensures that the right information is supplied to the Board in a timely fashion to support effective decision making and that appropriate time is allocated to key matters under discussion at meetings. Guidance is provided on Board paper provision: papers need to be clear, succinct and, among other things, highlight any relevant or material stakeholder or Environmental, Social & Governance (ESG) impacts considered in proposals coming for Board decision. Papers are subject to the scrutiny of the Chair in advance of circulation and are issued in good time in advance of meetings. The Board meets at least nine times a year and holds an awayday with the Executive.

The Chair ensures that all voices in the boardroom are heard and fosters a culture of open debate and constructive challenge.

A tailored induction programme, involving reading material and a phased programme of face-to-face meetings, provides all the information and contacts across the business that a new Board member needs to maximise their contribution as early as possible.

The importance of ongoing Board development is recognised and there are development items planned throughout the year. The opportunities for these have been expanded in recent years via additional breakfast sessions outside the scheduled Board meetings.

The Board is supported by two committees:

the Audit Committee, and

the Remuneration and Nomination Committee (RemCo).

Both committees have clear terms of reference and are chaired by a NED.

As well as attending the Board and committees, the NEDs meet privately and provide support to the Senior Partner and Managing Partner and other senior members of the leadership team.

The appraisals of the Senior Partner and Managing Partner are led by the NED chair of RemCo.

The Chair has regular one-to-one discussions with all the elected Board members providing an opportunity to discuss Board matters.

The Board has the support of the Group Secretary and uses an online portal for access to, and security of, Board papers.

Principle 4: Opportunity and Risk - a board should promote the long-term sustainable success of the company by identifying opportunities to create and preserve value, and establishing oversight for the identification and mitigation of risks.

The Executive meets monthly and via its composition is alert to the risks, as well as future opportunities, that face the Group, and these come up to the Board for discussion where necessary. As per the Group’s Purpose, sustainable value is a key driver in decisions made.

To support the identification of opportunities to create and preserve value, there is a focus on innovation and finding new or alternative ways to continue to service our clients’ needs proactively and effectively. More on our approach to innovation, including some recent examples and award-winning developments, can be found here.

The Group has a dedicated Practice Governance & Risk team (PG&R), responsible for dealing with risk management and compliance within the business. PG&R works alongside all Group entities, both in the UK and internationally, in respect of risk and compliance.

Having established clear channels for the identification of risks, an in-depth Group risk register is maintained in PG&R, which has RAG-rated risks across a number of categories and sets out the status of any mitigation. This register is continually reviewed and updated.

Risk is embedded as part of all discussions at the Executive and Board. The Head of PG&R is a member of the Executive and also attends Board meetings on at least a quarterly basis to discuss the principal risks facing the Group and mitigation required to minimise the Group’s exposure. She also regularly meets and has direct access to the Senior Partner, Managing Partner and each of the NEDs outside the cycle of Executive and Board meetings.

An internal control framework is overseen by the Audit Committee and managed by a combination of PG&R, Finance and IT. Independent assurance is gained from a combination of testing by our external auditors, external assessments (for example, Cyber Essentials+ and ISO9001 and 27001 Standards) and client audits.

Principle 5: Remuneration – a board should promote executive remuneration structures aligned to the long-term sustainable success of a company, taking into account pay and condition elsewhere in the company.

The Group rewards and recognises, at an individual and team level, those outcomes and behaviours which support the achievement of the Group’s Purpose and Vision and the delivery of our strategic objectives.

RemCo plays a significant role, alongside the Executive and Board, carrying out its defined responsibilities relating to Member and senior management remuneration, providing an objective view and working to ensure levels of remuneration take into account Group and individual performance and internal and external benchmarking. Factors beyond financial targets are taken into account, including alignment of behaviours with the Cultural Principles, innovation, collaboration and leadership.

Principle 6: Stakeholder relationships and engagement – directors should foster effective stakeholder relationships aligned to the company’s purpose. The board is responsible for overseeing meaningful engagement with stakeholders, including the workforce, and having regard to their views when taking decisions.

The Group’s Purpose is to help our clients and our colleagues succeed, creating sustainable value. Ongoing dialogue with colleagues, clients and other key stakeholders is considered fundamental to the Group’s success in fulfilling its Purpose.

In all decision making at the Board, when promoting the success of the organisation for the benefit of Members, regard is given to long-term sustainable value, acting fairly between Members, and any significant impact on colleagues, clients, suppliers, the community and environment.

We foster effective stakeholder relationships with some of our key stakeholders in the following ways:

COLLEAGUE ENGAGEMENT

The Board recognises the importance of a healthy workplace culture, underpinned by the Group’s Cultural Principles, which is responsive to the needs of our colleagues and the business. Being a people business, the input and feedback from our colleagues is fundamental to how our business is structured, ensuring that individuals are supported to achieve their full potential, with clear routes for progression.

We are guided by the five strategic pillars set out below:

1. Talent & Succession: transparency in defining and publishing career paths and development opportunities.

2. Skills & Performance: a high-performance culture created through ongoing investment in our colleagues and a culture of continuous improvement.

3. Reward & Recognition: a multi-faceted approach is taken both in terms of measurement and reward.

4. Leadership & Engagement: we regularly seek, listen to and act on feedback received to ensure improvement and development (details of engagement are included below).

5. Equity, Diversity & Inclusion: we seek to understand and eliminate barriers to equality of opportunity and aim to reflect more closely the diversity of the communities in which we live and work.

A strategy refresh is building on these elements, with particular emphasis on leadership, development and growth, belonging and inclusion, and celebrating and rewarding success.

We stand out in the legal sector for our innovative approach to working, known as Flex Forward. Launched in 2021, Flex Forward offers three types of dynamic, location-based working – office-focused, hybrid, and fully flex – to provide each colleague with maximum flexibility for their role. Flex Forward includes a more relaxed approach to working hours to support colleagues with their commitments outside of work, including caring and parental responsibilities. We were named a 'Top 30 Employer for Working Families' for the third consecutive year by the charity 'Working Families' in September 2022.

The Group was pleased to retain 89% of its trainees in autumn 2022 (2021: 87%) with 16 of the newly qualified lawyers staying on in permanent roles. We relaunched our trainee development scheme in 2020, designed in line with the O-Shaped Lawyer principles, to provide our lawyers with a broad skillset beyond technical excellence.

The Group is proud of the levels of engagement with its colleagues. Our culture and style of engagement is one of transparency, openness and honesty. Communicating with our colleagues, keeping them informed on matters of importance to them and developments in our business, and listening to and acting upon feedback from colleagues across the Group are seen as key. This is achieved in a number of ways, including:

• Business updates directly from the Managing Partner to share information on the performance and development of the Group.

• Town Hall meetings hosted by the Senior Partner and Managing Partner to provide updates about the business to all colleagues.

• An internal monthly e-newsletter (DACBspoke), with an opening blog from the Senior Partner or Managing Partner.

• DACB Launchpad, a crowdsourcing platform where colleagues submit ideas, vote and comment on ideas, and collaborate with others, helping to shape the future of the Group.

• Café Connect, a virtual forum where the Managing Partner and other members of the senior leadership team meet with colleagues for an informal discussion about topics relevant to the Group. Topics for past sessions have included belonging and men's mental health.

• Members’ meetings with the Senior Partner and Managing Partner.

• A network of sector, legal service line, team and location meetings.

• A number of colleague-led diversity networks: ACCESS (racial inclusion), Women+, Spectrum (LBGT+), and Parents & Carers.

• Senior Partner Sounding Board which provides a forum for the Senior Partner to benefit from reverse mentoring by colleagues in the early years of their careers.

• Viva Engage, an internal social media platform used by colleagues and as a mechanism for informal updates from members of the senior leadership team.

• Bi-annual colleague surveys using Peakon, a colleague listening tool that helps us better measure engagement. After each survey we discuss the results with our colleagues and action accordingly. Current areas of focus include reward, career progression and wellbeing.

• Analysis from the various methods used to engage with colleagues outlined above is fed back to the Executive and Board and helps inform and enhance effective decision making and the Group’s People Strategy which is approved by the Board.

More detail on the demographics and diversity of the Group’s workforce can be found in the Equity, Diversity & Inclusion section of our website.

CLIENT ENGAGEMENT

The Group’s Client Engagement Programme is designed to forge effective and sustainable client relationships and in so doing to gain insights enabling us to deliver a supportive, value-added and bespoke service now and in the future.

Via our Client Listening Programme we seek formal feedback from clients at various stages in their relationship with us (tender debriefs, on-boarding reviews, relationship reviews and post-matter reviews). Feedback is considered and actioned at an individual client level after each review, supporting a cycle of continual learning and improvement. Aggregated feedback and insights are shared with the Executive and Board to inform and support the Group’s strategic decisions. The results of our Client Listening Programme in 2023 were extremely positive, with 94% of client responses rating their ease of engaging with the Group as good or excellent.   

Our Client Engagement Programme also facilitates regular informal conversations with clients throughout the year and feedback is captured and responded to.

To better support and service our clients, we accelerated the pace of our international expansion in FY23, opening two new offices in Milan and Rome, signing a strategic co-operation agreement with BLD in Germany, and strengthening our presence in Singapore. We have also had a presence in Argentina since August 2023 and have more international projects in the pipeline for FY24.

In response to client needs, we constantly review our investment in technology and where we can automate the legal process to drive efficiencies, enhance the direct access of clients to our work and provide useful resources to save them time.

Recent innovations and investments in response to client needs include the following:

• The launch of an internal training series to enhance the capability of the firm’s lawyers in supporting clients on ESG considerations. The training is being delivered by a specialist legal ESG education and advisory consultancy.

• Regular publication of our Lawcast podcast, examining legal topics across the full range of business sectors to address questions and challenges faced by business professionals in the UK and internationally.

• The launch of our NHS Health Law Booster Training Programme, a rolling schedule of topical webinars and face-to-face sessions focused on key legal issues primarily relevant to our NHS clients.

• Publication of a report on the legal challenges presented by the use of artificial intelligence (AI) in the delivery of healthcare.

• A two-year partnership with the Association of British HealthTech Industries (ABHI), under which the firm co-sponsors the ABHI US Accelerator programme, supporting a cohort of UK healthtech organisations looking to upscale their US businesses.

• Thought leadership for the global insurance market via publication of predictions across the full spectrum of insurance risks, identifying key opportunities and challenges that the global insurance industry may face in the year ahead. The 140 predictions are set out under six themes: class actions, climate change, global risk, modernising the workplace, regulation and technology. The predictions are also grouped by insurance line and jurisdiction. An interactive guide to ESG issues for the Insurance industry was also published in 2022.

• The launch of a new Corporate Insurance & Risk (CIR) division in the firm's Claims Solutions Group to service and manage liabilities and risk for corporate clients.

• An award-winning development of an automated fraud risk detection tool developed jointly with global insurer Zurich Insurance (Analytics).

• Continued use of DACB Launchpad and hackathons to generate ideas in response to client needs.

We are proud to have received a number of awards over the last year, including:

• Two awards at Legal Week’s annual Legal Innovation Awards: one for Outstanding Training Innovation and the other for Leading PR & Communications Innovation.

• The gold prize in the ‘Best Internal Communications from the Professional Services Sector’ category of Communicate magazine’s Internal Communications and Engagement Awards for the firm's 'Noisy Innovation' campaign, an internal communications initiative that set out to raise the volume about innovation within the firm and equip colleagues to talk confidently about the innovative solutions and approaches the firm offers its clients.

• Legal Advisors of the Year (Public Sector) at the HealthInvestor Awards for the second successive year.

• Arbitration Team of the Year at the British Legal Awards. The team was praised for championing a “model for future commercial disputes”, where cutting-edge English law advice was delivered with a thorough understanding of the client’s business and culture.

• A silver award for Business Partner of the Year at the Insurance Times Awards 2022 for our whiplash reforms support programme which focuses on supporting insurers around the whiplash reforms and the Official Injury Claim (OIC) portal.

SUPPLIER ENGAGEMENT

Fostering strong relationships with supply chain partners is of great importance to helping support our wider engagement activities and deliver one of the principal objectives of the Group strategy: operational excellence. Executive-level engagement is part of the supplier relationship framework, with Board oversight on matters and relationships of strategic importance.

We have a dedicated procurement team and have continued to invest in technology to help manage our supplier relationships, contract compliance and early identification of risks (including sanctions, financial and cyber security). Our procurement colleagues have completed an ethical procurement certification - “Corporate Ethical Procurement & Supply” - from the Chartered Institute of Procurement & Supply, which is renewed annually.

A robust procurement process is followed at on-boarding. The Procurement team works in collaboration with PG&R to ensure early clarity on the required commercial terms for a mutually beneficial relationship and the protection of both parties, as well as detailed due diligence around supplier practices. ESG-related requirements have been introduced into our standard supplier agreements and suppliers are expected to have appropriate ESG-related policies and procedures in place. The due diligence process seeks assurance on a wide range of commercial and other considerations, including modern slavery, diversity, sustainability and payment of the UK National Living Wage.

Our Modern Slavery Act statement is available here.

Supplier relationships are managed through regular governance meetings and via risk monitoring tools. Critical relationships are subject to annual revalidation, with plans to broaden the scope of review to provide greater assurance surrounding supplier relationships at all levels. Opportunities are provided for both parties to feed back on the relationship and discuss innovation and development in the products and services available.

Analysis of the sustainability and resilience of the supply chain is undertaken by Procurement and PG&R. They assess the suitability of suppliers, and any significant risks or issues are raised with appropriate senior colleagues and, where necessary, escalated to the Executive and the Board.

As required, payment practices for our English entities are published on a half-yearly basis on the Government’s online facility.

ENGAGEMENT WITH OUR REGULATORS

In making strategic decisions, due consideration is given to the relevant regulatory environment in the jurisdictions in which we operate to ensure we are compliant with local legislation and regulation. For those entities within the Group based in England and Wales, there is regular dialogue with the Law Society, our representative body, and the SRA as our regulator. We work with them in respect of changes and initiatives impacting the profession and the community.

Horizon scanning is undertaken to check for changes to other law and regulation which impact the Group to ensure that compliance is maintained through effective planning, response and implementation.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) AND RESPONSIBLE BUSINESS: STAKEHOLDER ENGAGEMENT

The Group has developed a Responsible Business Strategy with wider sustainability objectives in recognition of our role in society. The Board is updated on progress at least once a year and the Head of ESG reports directly into the Senior Partner.

The strategy connects directly to our Purpose as a firm, which is focused on creating sustainable value for our clients, our people and our communities. Our Responsible Business activities are reflected in the way we recruit and look after our people, the way we do business with clients and suppliers, our impact on local communities, and our environmental footprint.

The Group’s Responsible Business programme is delivered through four workstreams: social mobility and inclusion, sustainable procurement, community investment, and environmental sustainability. More information on these workstreams can be found in the Responsible Business section of the website.

In July 2022 we launched our ESG Strategy, which identifies our ESG commitments as a business and what our key sectors are doing to support clients on their own ESG journeys. The strategy, which is hosted on an ESG microsite, is the culmination of a project to identify what the Group and its clients consider as key areas of focus. As part of the project, we engaged with clients and colleagues to uncover priority themes and, with input from a steering committee of senior leaders within the Group and the help of an external consultancy, created a strategy that is focused on a series of commitments around climate change, talent & leadership, wellbeing, and Equity, Diversity & Inclusion. Our growing ESG advisory work for clients has included recent publications such as the 'Risk Register 2023 - Special Edition: ESG and what it means for law firms', 'ESG Decarbonisation in the Shipping Industry', 'ESG in Health and Social Care', as well as the firm's 'Informed Insurance' collection of thought leadership and predictions for the insurance sector.

For several years we have reported on our carbon emissions through the Legal Sustainability Alliance and we deploy a number of carbon reduction initiatives, including e-signature document production and renewable energy procurement policies. Our Carbon Reduction Plan was first published in April 2022. We have now committed to more ambitious carbon reduction measures, expanding the scope of our environmental reporting to enable submission to the Science Based Targets Initiative (SBTi), the world-leading framework for setting targets which are aligned with the Paris Agreement. Our new commitments submitted to the SBTi are to reduce Scope 1 & 2 by 42% by 2030 and Scope 3 by 25% by 2030, aiming for Net Zero by 2050.

We have published an updated Equity, Diversity & Inclusion report on our website which is based on diversity data from colleagues in the UK & Ireland as at July 2023 and outlines the key elements of our Equity, Diversity & Inclusion Strategy FY21 - FY25. Analysing the composition of our workforce in this way helps to inform our People Strategy so that we make sure that people from all backgrounds and with the widest possible range of experiences bring their views and knowledge to our business.

On Equity, Diversity & Inclusion, developments in the year included:

• The signing of the Legal Apprenticeships Pledge to recognise UK legal apprenticeships as an equal pathway into a legal career.

• Setting up a network of Accessibility Champions as a support network for our colleagues in relation to disability or neurodiversity.

• The introduction of gender-neutral drafting in correspondence and documents.

• The signing of the Menopause Workplace Pledge and the training of Menopause Champions in the business as part of a commitment to ensure everyone going through the menopause is supported.

Developments which illustrate our engagement with stakeholders relating to the community include the following:

• Our ongoing corporate partnership with Action Tutoring, which involves a multi-year grant to fund the project's expansion. A significant number of colleagues volunteer as tutors to provide support to disadvantaged pupils in English and mathematics.

• The firm's volunteering programme with Change Please, a social enterprise which helps homeless people through its coffee business. As part of the programme our volunteers have helped 40 people through six employability workshops, with 85 per cent going into onward employment. The programme has been recognised through two award shortlistings.

• Partnering with Big Issue eBikes in Bristol on a bike-sharing solution with social impact. The firm sponsored 20 eBikes for exclusive use by colleagues as part of a scheme being run by ShareBike UK in partnership with the Big Issue Group. The scheme operated as an employability project for homeless and vulnerably-housed people by recruiting and retraining people who were previously unemployed and supporting them back into work.

• A partnership with the Sustainable Hospitality Alliance to work collaboratively on ethical employment in the hospitality sector. The firm's lawyers provide pro bono legal advice to support the Alliance’s new Net Positive Hospitality strategy, which includes a Taskforce on People.

In FY23, more than a quarter of our colleagues volunteered for one of our Responsible Business programmes.

The Group’s energy and carbon report can be found in the Group report and accounts.