Net profit at Addleshaw Goddard fell 17 per cent in 2010-11 to £34.4m, from £41.2m in 2009-10.
Turnover (£m): 161.9
Average PEP: 328
Equity spread (£k):198-468
Profit margin (%): 21
RPL (£k): 271
Vision – Execution – Governance –
News of the disappointing drop was accompanied by an announcement that the firm had begun a redundancy consultation among its support staff, with 31 eventually losing their jobs.
Turnover also fell, from £167.5m in 2009-10 to £161.9m in 2010-11. However, a proportion of this 3 per cent drop is down to a number of cases Addleshaws is handling on a no-win no-fee basis, including Boris Berezovsky’s multibillion-dollar battle against Roman Abramovich, which have yet to pay out.
In the wake of the profit drop the firm merged its governance board and its executive leadership team to create a single unitary board (there is still a general board) in a bid to reduce the number of partners in management roles and, hence, distracted from fee earning.
Managing partner and senior partner Paul Devitt and Monica Burch also looked to overhaul the firm’s equity structure, ditching the partial lockstep in favour of a more merit-based system. But the proposal was pulled from the partnership meeting agenda following a backlash from partners. This has echoes of the failed attempts in 2009-10 to pass a motion that would allow non-lawyers entry into the partnership.
These hiccups aside, it would be harsh to refer to Addleshaws as dysfunctional. The firm continues to win choice mandates; in-house counsel praise highly its approach, while peers still covet several of its strong practices, such as litigation, property and retail. But sources close to the firm confirm that years of falling profits, together with increased costs such as the firm’s London HQ, have taken a toll on the partnership. Management has yet to heal this rift.