Shoosmiths

UK 200 RESULTS 2010

During 2008-09 Shoosmiths saw its profit plummet, with its average profit per equity partner (PEP) figure down by 54 per cent and net profit taking a 51 per cent hit.

Last year, however, the firm bounced back thanks to a series of cost-cutting measures introduced by new chief executive Claire Rowe. The result was that net profit rose by a staggering 83 per cent to £11m, while PEP made a comeback to reach £256,000.

Impressive as the figures may be, they also need to be placed in context. PEP remains well down on the 2006-07 high of £407,000, while net profit is well short of the £16.1m the posted in that same financial year.

Turnover is another area where the firm has struggled in recent years. In 2009-10 revenue fell for the third year running, down by 9 per cent to £90m. The 2007-08 figure was £103.4m.

It is probably a good thing, then, that Rowe says the firm’s focus is on building up profitability as opposed to turnover.

The firm’s cost-cutting measures have been threefold.

In the past year it made 107 staff redundant and in October 2009 it introduced a voluntary 3.5 per cent paycut for 90 per cent of staff earning more than £25,000. It also introduced an extensive flexible working scheme.

Despite the cuts the firm has continued to build up its Manchester office, bringing in personal injury (PI) specialist Debra Woolfson from Pannone among others. Its plan is to provide a full-service offering in the city within the next few years.

Litigation, which encompasses commercial disputes, recovery work for banks and PI litigation, accounts for around £37m of fee income. The firm’s second-largest practice area is property, which makes up £24.3m of total turnover.

UK 200 RESULTS 2009

After a decent rise in turnover over recent years, from £44.3m in 2003-04 up to £103.4m in 2007-08, Shoosmiths saw a 4 per cent dip in revenue to £99m last year.

In comparison, average profit suffered a 54 per cent decline, from £372,000 in 2007-08 to £151,000, one of the largest drops in the market. Also down was revenue per lawyer, by 6.6 per cent, from £297,000 to £277,000.

Chairman Andrew Tubbs highlighted the opening of a new office in Manchester in January as well as the firm’s recent redundancy programme as contributing factors to the results.

“Our profit was hit hard because we chose to put people before profit,” said Tubbs. “We delayed our restructuring programme for as long as possible last year, which means that the impact of these savings will start to take effect half way through this financial year.”

In total the firm made 25 fee-earners and 44 support staff redundant during its restructuring programme earlier this year.

Shoosmiths’ brand also took a knock last year when the firm deferred trainee start dates without offering any cash to those affected.

Since then managing partner Paul Stothard has stepped down after just one year of his three-year term to be replaced by litigation partner Claire Row.

On the upside, Shoosmiths boosted its Birmingham income by 20 per cent in just six months during the previous financial year after hiring a 31-strong social housing team from Cobbetts along with the team’s entire client list in March 2008.

The firm operates a modified lockstep.