Davies Arnold Cooper
UK 200 RESULTS 2010
Movement since 2009
Turnover (£M):
Profit per equity partner (£K):
Earnings per partner (£K):
Equity spread (£K):
Net profit (£M):
Profit margin (%):
Revenue per fee-earner (£K):
Revenue per lawyer (£K):
Revenue per partner (£K):
Revenue per equity partner (£K):
Total number of fee-earners:
Total number of qualified lawyers:
Total number of partners:
Total number of equity partners:
Total number of female partners:
Total number of female equity partners:
Total number of staff:
Leverage ratio (fee-earners per equity partner):
UP
44.1
278
172.98
150-450
8
18
200.5
253.2
575.7
1,531.3
220
174
77
29
13
3
360
5.05
At the end of the 2008-09 financial year Davies Arnold Cooper (DAC) celebrated its
best set of figures in almost a decade, with the firm seeing the full effects of its January 2008 merger with KSB Law, a deal that added £8m to DAC’s turnover.
A year later and growth slowed. But the firm has once again looked to invest by hiring key partners to bolster its core practices of insurance and real estate, while also adding further strength to its employment team.
Turnover fell marginally by 2 per cent at the 2009-10 year-end, from £45m to £44.1m. The firm’s net profit shrank by a much more weighty 25.9 per cent, from £10.8m to £8m. This had a direct impact on average profit per equity partner, which fell by 23 per cent, from £361,000 to £278,000.
DAC keeps its equity tight, with just 29 out of 77 partners being owners of the business. Bottom of equity has remained static for the past three financial years at £150,000, but the top end decreased in 2009-10 from £500,000 to £450,000.
The firm’s insurance clients, which include Zurich and QBE, kept its dispute resolution group busy during the year, contributing 64 per cent of the firm’s turnover, or £28.2m.
UK 200 RESULTS 2009
Movement since 2008
Turnover (£M):
Profit per equity partner (£K):
Earnings per partner (£K):
Equity spread (£K):
Net profit (£M):
Profit margin (%):
Revenue per fee-earner (£K):
Revenue per lawyer (£K):
Revenue per partner (£K):
Revenue per equity partner (£K):
Total number of fee-earners:
Total number of qualified lawyers:
Total number of partners:
Total number of equity partners:
Total number of female partners:
Total number of female equity partners:
Total number of staff:
Leverage ratio (fee-earners per equity partner):
UP
45.0
361
200.0
150 - 500
10.75
24
198
246
600
1,500
227
183
75
30
13
3
380
5.1
Davies Arnold Cooper (DAC) had one of its best years in a decade, with a turnover increase of 21 per cent from £37.3m to £45m.
The year 2008-09 reflects a full year for the KSB merger (DAC acquired the lion’s share of the £6m business but did not acquire the entity), which brought some £4m to the total pot. The extra £4m growth was derived from existing clients.
The dispute resolution business, where key clients include QBE, Astrazeneca Insurance Company and Zurich, contributed a hefty proportion of the total billings – 64 per cent, or £28.8m. Property accounts for nearly half as much again, or 30 per cent (£13.5m). DAC’s housebuilder client base was hit badly by the recession, although Crest Nicholson remains a top client for the firm.
Corporate accounts for a tiny proportion of the overall revenue – 3 per cent, or £1.35m, with all of that work being done out of London. Nevertheless, there was an opportunistic change in investment strategy this year with the acquisition of a four-partner corporate team from Halliwells’ London office.
The Spanish business has been a quiet success for the firm. Its outposts in Madrid, which has some 40 lawyers, and Mexico City now turns over around £7m.
DAC’s presence in the insurance and property markets contributed to its long lock-up. Average work in progress stood at 54 days and average debtor days at 88. The firm has a conservative distribution policy of 12 months-plus.
Net profit rose from £10m to £10.75m, allowing average profit per equity partner to increase from £357,000 to £405,000. The equity is held relatively tightly, with some 30 partners out of 75 being full owners of the business. Bottom equity partners matched last year’s drawings of £150,000, but the top of the equity increased slightly, from £475,000 to £500,000.
Three partners were at the top of the modified lockstep, the points of which go from nine to 28, while 10 per cent of overall net profit is distributed via a bonus pool.
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