Addleshaw Goddard

UK 200 RESULTS 2010

It was a middling year at Addleshaw Goddard. The profit margin fell from 26 to 25 per cent, but average profit per equity partner increased by 5 per cent, from £405,000 to £426,000, largely as a result of an equity partner cull: the firm had on average 14 fewer equity partners and 19 fewer partners than in 2008-09. However, unlike in 2008-09, Addleshaws is paying out bonuses on a discretionary basis this year.

It was a particularly impressive year for the contentious department, which grew fee income by 25 per cent and which now accounts for almost a third of firmwide revenue. This was boosted by the ongoing Berezovsky litigation and partner David Engel securing more than 30 settlements from media outlets for Robert Dee, the ‘world’s worst tennis player’. The question remains as to whether this performance will be sustained next year given that former department head Simon Twigden is set to leave, along with partner Pietro Marino, to set up a claimant-focused boutique.

Speculation arose that Twigden’s exit was linked to his failure to win the chairman election, in which he ran against Malcolm Pike, the head of the contentious and commercial division, and litigation partner Monica Burch. Burch won, becoming one of just a handful of women to lead a City firm.

It was a good year for the professional services practice set up last August by former managing partner Mark Jones.

It advised on the tie-up between offshore firms Mourant du Feu & Jeune and Ozannes.

However, three of the firm’s four major practice areas saw their incomes drop: finance made £38.5m compared with £41.5m a year before; real estate brought in £34.6m, down from £40.2m; and corporate generated £40.2m, a drop from £48.5m.

The equity runs from 50 to 150 points with 10-point increments. It is split into three bands, the first of which, 50-80 points, is lockstep. Thereafter it is performance-based. No partner currently has more than 130 points.

UK 200 RESULTS 2009

Even before the recession hit Addleshaw Goddard’s management was anticipating the moves it would need to take to help maintain its profit margin at as healthy level as possible. These included slashing headcount through a mixture of redundancies, natural wasteage and an effective hiring freeze.

The firm was one of the first to make job cuts – 16 went last summer – and as a result these employees were removed from the payroll early on. It followed this with cutting 19 partners in January this year. There was some surprise about the people and areas that were targeted, with some countercyclical practices affected. However, litigation appeared to survive unscathed.

This prudent approach to financial management in the short term, combined with a relatively conservative long-term financing policy, means that the profit margin only dropped from 33 to 25 per cent, although average profit per equity partner dropped to £405,000.

One of the main costs has been that associated with taking on new London headquarters at Milton Gate in the City. The move actually took place in the 2009-10 financial year, although the firm had to take out a seven-year loan to cover around 80 per cent of the fit-out cost.

Addleshaws continued to make great strides in its building societies practice, with partner Adam Bennett advising Catholic on its merger with Chelsea, Cheshire and Derbyshire on their mergers with Nationwide, Barnsley on its merger with Yorkshire and Scarborough on its merger with Skipton.

It also has a market-leading LLP practice led by professional risks partner Richard Linsell, which took on Allen & Overy lawyer Rachel Khiara as a partner. And this offering has recently been boosted by the addition of a consultancy practice led by chair Mark Jones, who has been succeeded by former head of corporate Paul Devitt in his role as managing partner.

Projects has also been improving its profile, with the firm scooping the role of adviser to the lenders on the Greater Manchester Waste PFI – Europe’s largest waste project. It continues to eye the private sector and banking clients as it seeks to grow that practice further.

As might be expected, commercial property had a bad year, with revenues across the property division dropping by 27 per cent. The firm continues to count Sainsbury’s among its major clients for that group. What was less expected was the slight drop of 3 per cent in income in the contentious and commercial department, which includes litigation, IP, IT and employment.