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)
Anonymous | 14-Aug-2009 12:51 pm
"Last and least, the partners' financial positions"?
Are you kidding? I spot the Cobbetts partner and claim my £5.
.
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Anonymous | 4-Sep-2009 12:29 pm
I am an ex employee with many friends there. I had a middle management position there.
I find it really curious that The Lawyer - which has given Cobbetts nothing but bad press for years in my recollection - suddenly decides that a mid-ranking lawfirm declining to publish and discuss its interim results, something perfectly legal, merits a big story. I can't see similar stories occurring for some of the more media friendly southern firms who've been through, and are going through, worse situations. The first we will hear about those is WHEN (not if) something dramatic happens.
As to what is going on at Cobbetts, my understanding is that things are not greatly different to what is occurring elsewhere. They are in the same business as everybody else, so are suffering the same issues. Where there may be variance, is that the recent office refurbs and associated investments, and possibly residual merger costs, payoffs etc, are still being felt around the firm, which probably means the unavoidable costs base is higher than most. So, yep, they may well have made losses, and there may well be further hardship to come.
That some of it might have been avoidable, that maybe Birmingham was perhaps a bridge too far, is possibly true. But I don't think you can necessarily slate the management for that; the management is a function of the partners. They elect the management and endorse their decisions, or they remove them.
The partners endorsed the strategy and were happy to bask in the glory when things looked to be going well. Unless the partners want to claim Michael et al were derelict in somehow failing to foresee the global meltdown, I'm afraid I don't think the criticisms have any substance.
I'd be quite happy to discuss any and all of this with the article author, once I recover from the shock of discovering I live in the North East. Meantimes perhaps some of the people here can reflect on their schaudenfraude. The partners and other lawyers will probably find other employment and probably have some reserves if things get really bad, but the reality for the support staff there, if their jobs go, is grim. Perhaps a little less smugness from The Lawyer and other commenters would be opportune; the little people are going to be the ones who cop for the worst of it, and they have done nothing wrong.
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