Osborne Clarke
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):
DOWN
83.7
393
285.32
247-512
19.3
23
201.7
239.1
767.9
1,708.2
415
350
109
49
17
9
613
6.14
Osborne Clarke’s 2009-10 was defined by cost-cutting. After 2008-09 saw turnover drop by 12 per cent and average profit per equity partner (PEP) take a 36 per cent hit, 2009-10’s story was one of consolidation.
The firm pulled in £83.7m in fees, representing a flat performance against 2008-09. PEP rose by 11.6 per cent, with UK partners taking home an average of £393,000. The firm did not supply figures for the German partnership, which brought in around 17 per cent of revenue for the second year running.
While the few redundancies among fee-earners took place in the previous financial year and partner numbers went up throughout 2009-10, a policy of not replacing equity partners who had quit the equity drove up partner profits. Net profit in the UK fell from £19.8m to £19.3m. German profitability was thought to have stayed flat.
The first full year of the firm’s outsourcing arrangement with Integreon helped to drive costs down and boost profitability. The firm even extended the scope of the agreement, which originally saw 75 support staff transfer to the outsourcer, to include events organisation.
The continuing corporate and property slumps continued to affect the firm, with the two practices accounting for more than a third of revenue. But the second half of the year brought a significant upswing, with property workflow alone up by around 20 per cent year-on-year, according to managing partner Simon Beswick.
As part of a spring rebrand, the firm has identified four core sectors and created business groups to drive performance in each. These are digital business, financial services, real estate and infrastructure, and energy and natural resources.
Partners enter the equity on a four-year fixed-share level before progressing to full equity status. Once they move to the lockstep partners start on 60 points and move up 10 points a year until reaching 100, with a gateway in place at the half-way stage.
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):
DOWN
84.0
352
290.4
230 - 450
19.8
24
197
234
737
1,500
427
359
114
56
17
9
712
5.41
With 60 per cent of its business consisting of transactional work it is small wonder Osborne Clarke saw significant falls both in turnover and profitability over the past financial year.
The firm’s 2008-09 results show that turnover dropped by 12 per cent, from £95.3m to £84m, while average profit per equity partner (PEP) plunged by 36 per cent to £352,000.
The results last year were in stark contrast to the 2007-08 financial year, when the firm enjoyed the fruits of a strong deals market.
But the recession and corresponding drop-off of instructions in the firm’s property and corporate practices meant the firm was left making eight fee-earners and one member of support staff redundant.
Managing partner Simon Beswick said the firm managed to avoid any major redundancy programmes by preparing for the worst early and managing headcount from January 2008 by “not replacing any leavers”.
There were other measures, however. In February 2009 the firm announced a £50m deal that will see it transfer 75 support staff to outsourcing company Integreon. Under the deal Osborne Clarke will outsource all middle office services, including IT, shared secretarial services and training facilities.
The firm also revamped its management board following the promotion of two partners to department heads. The new line-up came after the firm promoted 18 lawyers to associate level.
In contrast to the firm’s transactional practices, Osborne Clarke’s litigation group revenue was up on last year’s, while the employment, pensions and incentives group grew by 7 per cent.
In Europe the German office saw turnover rise to €17m (£14.58m), 17 per cent of the firm’s total revenue.
Profit is distributed on a modified lockstep system. Ninety five per cent of total profit share is shared on a four-year lockstep that begins at 60 per cent, progressing by 10 per cent a year until parity. The remaining 5 per cent is distributed on a merit basis.
This year partners at the bottom of the lockstep received £245,000 and those at the top £510,000. This is the lowest the equity spread has been since 2004-05, when the spread was £210,000-£430,000.
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