CLOSE-UP: LIVE ISSUE/LEAGAS DELANEY - The sale that allows Leagas Delaney to go global. The Envoy deal means that a top-level rejig is timely, Francesca Newland writes

When Leagas Delaney announced its management restructure a couple of weeks ago, there were whispers that it was preparing the ground to sell out. Few predicted how quickly that would happen.

When Leagas Delaney announced its management restructure a couple of weeks ago, there were whispers that it was preparing the ground to sell out. Few predicted how quickly that would happen.

With pounds 60 million in its pocket from the Canadian communications company Envoy, Leagas Delaney now aims to speed up its international expansion. The agency already has offices in San Francisco, Paris, Hamburg and, of course, London.

The cash will help it open offices in Spain and the Far East and, eventually, New York.

The decision to sell to Envoy follows only two years after the agency bought itself out of Abbott Mead Vickers BBDO. AMV had bought a majority share of Leagas Delaney in the mid 80s.

Tim Delaney, who founded the agency with Ron Leagas in 1980, does not believe the Leagas Delaney approach will change because of the new ownership.

And a character such as Delaney, a highly opinionated workaholic, is unlikely to let a new parent change the outlook of his agency. It will maintain its name and, although there is a four-year earn-out period, Delaney states: 'I'm not going anywhere.'

He believes that Envoy is the perfect match for Leagas Delaney as its digital focus can now be matched and enhanced by the agency's branding capabilities. 'We've jumped into the new economy from the old economy,' he says.

Envoy already owns two ad agencies: Hampel Stefanides in New York and Communique in Toronto. It also owns the retail design agency Watt International; Fusioncreative, a corporate branding specialist; Sage Information Consultants and Devlin Applied Design.

Delaney says: 'We have always aimed to be ahead of the market in advertising creative terms. This merger gives us the opportunity to move even further ahead by working with like-minded professionals in areas like digital technology and retail design that are of increasing importance to our clients.'

The pounds 60 million cash injection comes at an important juncture for Leagas Delaney. Although it has been performing well overseas, with San Francisco picking up prestigious awards and accounts, and its appointment to handle vast European tasks including Lycos and Telecom Italia, there is a feeling that foreign success has been to the detriment of its UK performance. Eighty per cent of the agency's revenue comes from abroad.

Nasty stories about the London agency have been doing the rounds. Reports of a sweatshop run by the infamously tyrannical Delaney have been fuelled by criticisms from the swathe of staff who have recently quit the agency.

Certainly, the evidence of recent departures is pretty damning. Among those that have headed for the exit are such high-ranking figures as Tom Hudson, a creative director, Neil Hurman, the media director, and the marketing director, Lucy Meredith.

But as the criticism mounted two weeks ago, the agency announced its management restructure. The rejig of the London office is designed to free the deputy chairman, Nick Hough, formerly the managing director, to co-ordinate the agency's European growth.

It also puts a new London management in place, which will free the top management's time for international expansion. Four creatives, Ian Ducker, Will Farquhar, Dave Beverley and Rob Burleigh, have been promoted to joint creative directors.

At the same time, Justin Bairamian, a board account director on the BBC, and Colin Clarke, a board account director on Adidas, have been made joint managing directors.

The restructure has itself had important implications for the internal morale of the agency, bringing sweeping changes to one of the most static management structures in the business. As Hough says: 'There's an impression in the market that it is difficult to develop a career at Leagas Delaney. The more positive you are about career prospects the more likely people are to stay.'

Neil Simpson, Adidas's global advertising director, calls the four new creative directors 'top bananas'. He believes their promotion is a useful way for Delaney to keep them on and prevent them leaving for start-ups.

Bairamian and Clarke are not particularly used to working together. Their pairing is designed to cover off all ways of working, with their differences in style highlighted by their personal tastes. Bairamian, a Bob Dylan fan, will handle the agency's more traditional accounts. Clarke, who DJs in his spare time, will focus on more youth-oriented business.

The pair faces challenges on several key accounts as they look to take the agency forward. Leagas Delaney is being forced to share its billings for the prestigious Adidas account with the Dutch hotshop 180. Clarke remains relaxed about the relationship and Simpson is adamant that Leagas Delaney is not losing its grip on the business. But the fact remains that 180 is producing top-quality international campaigns that overshadow those of Leagas Delaney.

Fanta is reviewing as part of Coca-Cola's massive UK marketing rethink. Bendicks is also in the advanced stages of a review. Harrods is thought to be taking more of its advertising in-house. The BBC is reviewing, and Nintendo is emerging as the weaker player in the games console market.

Bairamian, who will focus on the agency's marketing needs, will have to apply pressure to the new-business effort of the agency, particularly in the domestic arena.

If that's Bairamian's first challenge, Clarke's is to make Leagas Delaney a happier place to work. And the move to new offices in January looks like the perfect opportunity to relaunch the agency. 'We would be crazy not to use the move as an opportunity to determine what we want to be within the Leagas Delaney principles,' he says.

'Change is exciting. People can see the possibilities and with our appointment they can see that loyalty is being rewarded. It's down to us to keep that alive. Justin and I are very approachable.'

Giving London its own management should be a crucial step in providing value for money to Leagas Delaney's new ownership and enabling the agency to perform as well in the UK as it does abroad. Simpson explains: 'Leagas Delaney has to be more than just Tim if it is to prosper.'


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