Addleshaw Goddard has seen revenues drop for the first six months of 2010, with the firm attributing the dip in part to its decision to pursue cases on a “no win no fee” basis.
Addleshaw Goddard has seen revenues drop for the first six months of 2010, with the firm attributing the dip in part to its decision to pursue cases on a “no win no fee” basis, meaning that a percentage of income from current litigation has been deferred until the outcome of each case.
The national firm brought in £78.1m to the end of October, four per cent down on the comparable period in 2009. Last month The Lawyer revealed that the national firm had agreed a conditional fee arrangement (CFA) deal with Russian oligarch Boris Berezovsky meaning that it shares the risk with the client (8 November 2010).
A statement from the firm indicated that the decision to run a number of cases under conditional fee arrangements “has meant that income from those cases in the first half of this year was lower than it would otherwise have been” and that discounting this factor like-for-like income would have been flat.
Addleshaws has also saw its head of litigation Simon Twigden, believed to be one of the contentious practice’s biggest billers, quit at the beginning of the financial year to form his own boutique (23 April 2010).
Managing partner Paul Devitt said: “The start of this financial year was more challenging than we had anticipated after a strong finish to the second half of last year. And whilst market and economic conditions remain uncertain, recent progress gives us confidence for the second half of this year and beyond. We have seen significant developments in key client relationships, good recent wins and our pipeline is encouraging.”
The CFA deal agreed with Berezovsky means that if Addleshaws wins his $4bn (£2.5bn) claim against Roman Abramovich it will be in line to be awarded a success fee running into tens of millions of pounds. It is believed the firm has taken out legal expenses insurance to cover the risk of losing, in which case its fees would be left unpaid.