Number crunching: Wragge & Co
21 January 2013 | By Matt Byrne
The tail-end of Wragge & Co’s 2012 was marked by the departure of banking head and asset finance specialist Paula Laird, who joined US firm Squire Sanders, and a three-partner City team including former managing partner Richard Haywood and current corporate chief Maurice Dwyer, who joined RPC. The exits serve to bookend a turbulent period for the Birmingham giant that has seen its key numbers and metrics roller-coaster.
While there were exits throughout the past six years there was some good news for Wragges on the headcount front in its most recent full financial year. In March 2012 the firm said it was calling time on its partner promotions freeze by making up three new members. Dispute resolution specialist Patrick Arben, corporate lawyer Richard Goold and pensions expert Jane Kola all became partners on 1 May 2012. Wragges had made no internal partner promotions in 2011, instead focusing on bringing in external talent.
Last year’s financials also showed at least a partial return to form, with the firm posting a 5 per cent rise in turnover, from £113m to £118.2m. A comparison of margins in recent years - 37.6 per cent in 2007 and 24.7 per cent in 2011 - highlights the difficulties firms in a tightening market have faced in making a profit. Again, however, last year’s numbers looked a little better for Wragges, with the firm posting a 32.5 per cent margin (£38.4m) on its turnover of £118.2m.
Back to headcount. The LLP accounts show a big jump in the average number of members between 2010 and 2011, from 110 to 119 (there was, however, a far bigger jump in the profit share allocated to the highest-paid member over the same period, from £444,000 to £734,000. Wragges is an all-equity partnership which means that unlike at most firms all LLP members are also full-equity partners). Curiously, while the average number of people employed by Wragges also grew between 2010 and 2011, the split between legal staff and support staff in 2011 was precisely 50:50, at 479 each. The previous year’s accounts showed a big drop in total staff numbers, from 1,034 to 916, reflecting the impact of the recession on the Birmingham firm.
The higher number was itself a drop on the 2008 headcount of 1,119, the firm’s peak in terms of staff numbers. Last year total staff numbers grew slightly to 988, just over half of whom (496) were support staff. In 2007, when Wragges’ turnover of £114.7m was closest to its current level, the firm employed 1,076 lawyers and staff.
The representation of women in Wragges’ promotions and hires is patchy, with, for example, both of its two 2011 laterals being female but just two women among the 15 partners who joined the partnership the year before, including three promotions (one woman) and 12 laterals (one woman).
Wragge & Co’s most recent LLP accounts, filed in September last year, may show a positive bump in turnover and profit, but groupwide they reveal remarkably little change in either debtors or creditor figures. In 2011 the former (due within one year) was £46.7m and this rose to £47.3m last year, while the latter figure remained unchanged, at £17m.
The firm’s 2011 accounts do, however, reveal a 50 per cent hike in the amount Wragges’ LLP owed to creditors - up from £10.8m to £16.2m.
Elsewhere, the profit share paid to the highest-paid member in 2011-12 dropped to £648,000 - down from £734,000 in the 2010-11 financial year.
Top three recent strategic moves
- In October 2010 Wragges hired Peter Flint, former head of international arbitration at Barlow Lyde & Gilbert (now Clyde & Co), to head the international arbitration practice.
- In the same month Wragges launched in Paris with a team of 10 partners, five directors and 18 associates. From day one, the Paris-based lawyers focused on corporate, real estate, funds, tax, finance, dispute resolution, corporate recovery, IP, commercial and projects matters.
- Two years earlier Wragges had ramped up its finance team when it hired Clifford Chance senior associate Kieron Dwyer. A structured finance lawyer, Dwyer advised Challenger Infrastructure Fund on its acquisition of LBC Group from One Equity Partners and handled deals for Deutsche Bank, Standard Bank and RBS.