Hammonds

UK 200 RESULTS 2010

While Hammonds’ turnover again saw a decline in 2009-10, falling by 6 per cent to £118m, profit bounced back. The firm, which reported a 25 per cent drop in average profit per equity partner in 2008-09, saw that figure leap by 32 per cent to £364,000 in the past financial year. Net profit saw a 17 per cent hike to £22.6m.

The soaring profit was largely a result of the reduction in the firm’s headcount. The total number of staff dropped from 1,297 to 1,015, and the number of qualified lawyers dropped from 614 to 459. The number of equity partners was also slashed, from 73 to 62.

The headcount reduction was not all down to redundancies. There were several high-profile departures over the past year, including Manchester head Jonathan Edwards and international construction chief David Moss, who both joined McGrigors, and Leeds head of litigation David Williams, who joined Walker Morris. Other partner departures include property specialist Paul Groobey, corporate partner Ian Gillis and construction partner Rupert Cowen.

Towards the end of the financial year the firm was forced to abandon its Munich office following a series of partner defections to rivals Eversheds and Reed Smith. However, the firm is now considering plans to open in Frankfurt. It has also made 11 partner appointments in the past year, strengthening areas such as corporate, pensions, insolvency and litigation.

Corporate was a key practice in 2009-10, generating 21 per cent of fee income. The team advised Rensburg Sheppards on its all-share £412m takeover by Investec and Care UK on its £281m acquisition by Bridgepoint Capital.

Litigation remains another key area, accounting for £31m of revenue, higher than any other practice, while pensions and employment continue to perform well.

Despite the departures and falling revenue, Hammonds’ client base remains loyal: 73 per cent of its top 100 clients have been advised by the national firm for at least five years or more.

UK 200 RESULTS 2009

Average profit per equity partner (PEP) at Hammonds dropped by 25 per cent from £367,000 to £276,000 in the past financial year. Turnover dropped by 5 per cent from £132m to £125.4m, while the top and bottom of the equity also saw a dramatic fall, going from £169,000-£486,000 in 2007-08 to £120,000-£363,000 last year.

Real estate was one of the firm’s big casualties during the year, although managing partner Peter Crossley said the planning team, which grew revenue by 15 per cent, performed well.

Crossley added that the firm had seen growth in employment, pensions, asset-based lending and planning. And although the firm undeniably suffered due to the downturn, it was still able to grow other parts of its practice, including the business recovery group, which increased revenue by 27 per cent.

But Hammonds would not be Hammonds without a headline-making row or two. Last year it was its dispute with seven former partners over drawings, which rumbled on throughout the 2008-09 financial year until eight out of the seven settled with the firm in March. Former partner David Jones’ battle with the firm looked set to be settled in court by the end of the calendar year.

Hammonds prefers not to disclose details of the settlement with the seven partners, but the case is likely to have been costly for the firm, both financially and in terms of negative PR.

Similarly Hammonds’ dispute with a group of former and current partners over the lease obligations on the Bradford office used by 
its spun-off conveyancing business Hammonds Direct continued to cause the firm PR headaches into the current financial year.