Charles Russell

UK 200 RESULTS 2010

Whereas in 2008-09 Charles Russell’s revenue dipped only slightly, its average property per equity partner (PEP) took a hit of 37 per cent, from £390,000 to £235,000, affected by the cost of its London headquarters move. The 2009-10 financial year reversed that position: PEP inched up to £259,000 and the equity spread stood at £154,000-£285,000 for 2009-10 compared with £130,000-£260,000 the previous year. However, 2009-10 saw turnover drop by 9 per cent, from £69.5m to £63.2m.

The firm says its AIM practice held up relatively well, but the dearth of acquisitions work meant that the corporate group’s turnover of £14.5m (23 per cent of the total) put in the poorest revenue per partner (RPP) showing of the firm at £500,000. Private client – one of the firm’s signature practices – represents approximately 16 per cent of total turnover, or £10.1m.

The best-performing sector was litigation, which contributed £18.96m of total billings (30

per cent) and £903,000 in RPP – a relatively impressive performance given that 10 of the 21 litigation partners are based outside London. However, London does account for the greatest proportion of partners (58 out of 96) and an even greater proportion of equity partners (32 out of 43).

While Charles Russell can be pleased that it increased its margin from last year from 15 per cent, the 2009-10 figure was a still meagre 18 per cent.

Its national spread within the expensive Middle England (offices in Cheltenham, Oxford and Guildford) and two small international offices in Geneva and Bahrain certainly contributes to higher overheads than those at firms such as Farrer & Co, but Charles Russell’s margin is hardly helped by a long lockup of 158 days.

Despite making two rounds of redundancies in 2008-09, the number of qualified lawyers dipped by only 13 to 254 in 2009-10, and the number of total fee-earners actually increased from 330 to 345. The biggest headcount reduction came on the support side, dropping from 589 to 547.

Charles Russell operates three classes of partners: salaried, fixed-share and equity. Profits are shared via a traditional lockstep of seven rungs. Some 30 of the equity partners are on the top rung.

UK 200 RESULTS 2009

Charles Russell has been on the move but its profit pool has taken a hit as a consequence.

The firm recorded a 39.7 per cent drop in average profit per equity partner (PEP) for the 2008-09 financial year, down from £390,000 to £235,000. Total revenue was also down by nearly 2 per cent from £70.7m to £69.5m.

Managing partner James Holder highlighted the relocation of the firm's London headquarters to Ludgate West and an office move in Bahrain as the two main contributing factors to a lower profit pool this year.

He also said the firm’s PEP was affected both by the cost of a redundancy programme it undertook earlier in the year and the loss of an insurance and reinsurance group, which left to set up its own niche practice.

To try to combat a larger hit to its profit as well as more redundancies, the firm put a number of its partners, fee-earners and support staff on a four-day week.

A number of other cost-cutting initiatives were introduced, including tightened budgets in departments such as IT and marketing and a sharper focus on expenses across the board.

Charles Russell operates a seven-rung lockstep, with the top of equity now worth £260,000, 40 per cent less than last year’s £435,000.