Cobbetts coy over profit as figures fall
Cobbetts has declined to comment on its profit and mounting speculation that its margin has plummeted to unprecedented levels.
Michael Shaw
The firm reported a turnover figure of £59.4m for the 2007-08 financial year, while costs during the same period totalled £51m.
During the most recent 2008-09 financial year the firm’s turnover was down by 18 per cent to £48.5m, although unlike the previous year’s figure this has not been adjusted for work in progress.
Assuming that costs remained unchanged on the previous year’s, this turnover figure would result in the firm being £2.5m in the red.
It is unclear whether costs at Cobbetts increased or decreased between 2007-08 and 2008-09. However, the firm made 69 redundancies during 2008-09 and will have had to balance payroll savings against the cost of making redundancy payouts.
It should be noted that Cobbetts had set aside £2m in partner drawings from 2007-08, although it is unclear how or when this sum was used.
Managing partner Michael Shaw refused to confirm the profit figure, with an external spokesperson saying the refusal was “a business decision”.
“LLPs need to be careful because their accounts will be a matter of public record and partner earnings and other figures will be scrutinised,” said Addleshaw Goddard professional risks head Richard Linsell.
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Readers' comments (22)
Ben Haider- MD QC Legal | 12-Aug-2009 11:57 am
My concern, which I know is shared amongst the legal industry in general, is why The Lawyer acts as self-appointed arbiter on matters of commerce. I think it's high time The Lawyer stopped being so sanctimonious! When Catrin Griffiths is in the invidious position of running a £50m+ business with all the pressures it brings, she will have the platform upon which to write such scurrilous comments, but in the meantime The Lawyer ought to observe a more impartial code of reporting, and not take umbrage at being shunned in
wanting to speak with a Managing Partner then resulting in such biased press. Catrin may not be aware, but we're in the middle of a global depression which might also account for the sparsity of advertising in The Lawyer?! I am sure on another day, The Lawyer would be happy receiving healthy contributions and sponsorship from Cobbetts for The Lawyer's annual
flagship events- do we smell hypocrisy?
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Ostrich Farming | 12-Aug-2009 12:40 pm
I've read and re-read this article, yet I fail to see the bias and impartial reporting that Ben Haider suggests is present. All I see are facts and figures and an apparently well-informed assumption based upon such facts.
The speculation in the opening line is surely justified given that while other firms are reporting their figures (no matter how bad, or how reluctantly) Cobbetts has chosen to stick its head in the sand. The truth will emerge in due course and I'll be extremely surprised if this speculation is unfounded.
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Anonymous | 12-Aug-2009 3:13 pm
by failing to disclose these figures, however bad they may or may not be, there is bound to be more intrigue and interest. I cannot understand the reference to the non disclosure being a "business decision" very odd!
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Stringer Bell | 12-Aug-2009 5:30 pm
The numbers are what the numbers are. There isn't much point whatsoever is suddenly turning around and saying you are not going to play anymore just because they are (one assumes) truly appalling. If you didn't like the game then you shouldn't have played in the first place and just kept silent through the good times. Talking to journalists is a game for consenting adults and if you are not prepared to engage as such then please don't whinge when the tough questions start to appear.
A failure to disclose externally is also likely to cover a failure to disclose internally to staff who must be wondering (and potentially panicking) about what the numbers are for their firm - very poor management if that is the case.
Finally, those of us with long memories might want to dig through the dustier parts of the brain and consider what happened to Turner Kenneth Brown in the early to mid 1990s.
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Anonymous | 12-Aug-2009 8:24 pm
Re. the above post, in fairness to Cobbetts they aren't the ones whinging - The Lawyer is!
I don't really see what the issue is here. The figures will be published when they are required to be published.
Quite why The Lawyer seems to think it is entitled to an advance march on that story is anyone's guess.
And if the figures don't show a loss, will the Lawyer write a Leader column about that?
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Anonymous | 12-Aug-2009 9:47 pm
Cobbetts will be concerned with the interests of their:
1. clients;
2. bankers;
3. staff; and
4. last and least, the partners' financial positions.
Heads will not be buried in sand. The only sand around is that whipped up in a swirl by the legal media.
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Anonymous | 12-Aug-2009 10:18 pm
for a so called big firm who were shouting from the roof tops when times were good, it is an embarassment that they are now running scared. Blake Lapthorn released their results which must have been difficult, it is time Cobbetts grew up and did the same
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Anonymous | 13-Aug-2009 11:18 am
I work at Cobbetts and would like to add that I'm not 'wondering and panicking' about what the numbers are as someone above stated. We were all briefed last week about the line that the lawyer intended to take. It's hardly a revelation that profits have been hit and we're in no different or worse a position to many of our obvious competitors. The reality is that the 'Significant Fall in PEP' headline no longer carries any shock or novelty value, because it's hard to identify a firm that hasn't suffered on that basis. So we end up with the 'X has suffered a loss' headline instead (on the basis that they wont tell us their results (yet)).
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Anonymous | 13-Aug-2009 5:00 pm
The novelty here is the possibility that the firm has actually made a loss, hence the newsworthiness.
Many firms are announcing quite significant reductions in profit, but most are are still making a lot of money, but just not quite as much as they were.
The firms which will clearly suffer the most will be those that didn't actually make much money when times were good.
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Anonymous | 13-Aug-2009 5:30 pm
Cobbetts will not have made a loss, but profits must be well down if Michael Shaw will not comment (he likes to talk the talk). I would not like to be one of their employees. Will we soon hear reports of another round of redundancies?
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