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Iberian firm Cuatrecasas Gonçalves Pereira and France’s Gide Loyrette Nouel have both reported significant turnover decreases in London for 2012, with both firms making a loss from their City offices last year.
After a strong 2011 for its London office, Gide’s 2012 LLP accounts show a 29.5 per cent drop in revenue last year, from £7.8m to £5.5m. Staff costs and other expenses led to an operating loss of £2.2m, almost four times the £557,000 loss made in 2011 (12 September 2012).
Costs sustained by Gide’s London office last year included £42,000 towards the firm’s onerous lease provision, which has impacted on office profitability for the last three years (24 October 2011). Gide is subletting a significant part of its 125 Old Broad Street space, last year earning £783,000 from this.
Earlier this year new Italian ally Chiomenti took over space in the building, meaning that the amount earned from subletting is expected to rise in 2013 (7 February 2013).
London managing partner Rupert Reece admitted 2012 had been a difficult year for the firm, with several departures including that of litigation partner Nicholas Tse and four associates to Brown Rudnick in February 2012 (13 February 2012). Overall staff numbers fell from 50 in 2011 to 42 in 2012, with the firm cutting its trainee numbers from 10 to seven and paralegals from five to two.
Reece said 2013 had begun significantly better than 2012.
“Since July last year we’ve been trying to get our shop in order, and have done so since the beginning of this year,” Reece said.
The firm promoted finance lawyers Fernand Arsanios, Fiona Gulliford, Karine Imbrosciano and Phung Pham to partner in London in its recent international promotions round.
“We’ve been able to make up a few because our results have been on track,” Reece added. “We’re betting on the younger generation.”
At Cuatrecasas, which last year joined Gide and Chiomenti in a European alliance (26 November 2012), London turnover fell by 64 per cent from £355,251 in 2011 to £125,248 last year. The drop follows a 29.5 per cent fall in revenue between 2010 and 2011, although 2012’s figures are still higher than the £84,837 reported in 2009. Administrative expenses of £712,509 meant the office made a £586,458 loss, compared to £450,842 in 2011.
Managing partner Antonio Baena, who was recently appointed to the role (26 June 2013), said the results were skewed by the way Cuatrecasas distributes work internally, with several deals managed out of Spain. He added that work originating from London was consistent with previous years in a challenging environment.
Baena added that his move to London, alongside that of finance associate Ignacio Buil, was intended to strengthen Cuatrecasas’s on-site execution capabilities.
“We intend that our stronger team, and the improving market conditions, will positively impact our accounts in the next years,” he said.