Simmons & Simmons

UK 200 RESULTS 2010

Simmons & Simmons’ highlights over the past year included litigation partner Philip Vaughan’s work on the Buncefield case, which resulted in a Court of Appeal victory for client Shell, and fellow litigation ace Colin Passmore’s win for Barclays in the landmark bank charges case. As a result litigation grew as a proportion of firmwide income, from 27 per cent in 2008-09 to 33.6 per cent in 2009-10. IP was also up. Despite the success, absolute income for contentious work grew by only 6 per cent on the previous year as turnover for the firm as a whole dropped by 14 per cent to £251m.

The reduction in total income was largely the result of a 22 per cent drop in revenue for the financial institutions practice, where clients include Bank of America, Deutsche Bank and Standard Chartered, and which accounts for almost half of firmwide revenue.

The decision to demerge the Portuguese practice, implemented on 1 May 2009, also took approximately £6m out of the coffers and reduced staff by 60. Simmons now operates an associate relationship with the firm of former Portugal managing partner Pedro Rebelo De Sousa. The closure of the Moscow office in October, with eight staff made redundant, also led to a (smaller) dip in revenue.

Meanwhile, Simmons centred its international attention on China, making lateral hires and applying for a Beijing licence. Central to that focus were the merger talks with Mayer Brown. The US firm has an extensive East Asia presence, but discussions were eventually abandoned after concerns were raised over office duplication and differences in profitability.

Simmons overhauled its salaried bonus system during the year after no bonuses were paid out in 2008-09 because of a failure to hit budget. It also took the decision to break associate lockstep, replacing it with a merit-based arrangement from 1 May 2010.

The firm moved some partners out of the equity partnership, which was 5 per cent smaller than in 2008-09. The profit pool is split 80:20 between a 12-rung lockstep and an additional allocation of either one, three (the norm), six or 10 points. Equity partners enter the lockstep on seven points and are expected to progress up a level each year for the first seven rungs, accumulating 1.5 points per year. Progress is managed more actively in the top five rungs. A remuneration committee is comprised of managing partner Mark Dawkins and four elected members.

Simmons put corporate responsibility at the heart of its 2009-12 business plan through increasing cooperation with clients, rewarding employees with time off in lieu and recognition in the appraisal process.

UK 200 RESULTS 2009

After four consecutive years of impressive growth, Simmons & Simmons saw its average profit sink by nearly 20 per cent in 2008-09.

The figure is now roughly the same as it was in 2007, a harsh blow for a firm that worked hard to recover from a period of stagnant profitability in the early part of the decade.

Having spent three years and some £25m reducing costs in its business services group, Simmons was forced to wield the axe again in February, putting 20 associates and 49 support staff on redundancy consultation.

That said, the firm did manage to increase its revenue from £289m to £291m, a considerable achievement given its historic focus on banking and finance.

In fact, the financial institutions group managed to grow in spite of the banking crisis. Simmons markets itself as a high-quality alternative to the magic circle, and counts among its clients UBS and Barclays, which recently named the firm on its new panel.

Across its large international network, France and Italy performed strongly, although the Middle East, in which Simmons has invested heavily over the past few years, had a difficult year.

Simmons reshaped its Dutch practice during 2008-09, closing the Rotterdam office and moving all its lawyers to Amsterdam, leading to a number of partner departures.

The firm also split from its Portuguese practice, which will revert to an alliance.

The international network nevertheless remains key to Simmons’ progress, but it must expand in Germany and transform its fortunes in the Middle East and Asia in order to achieve the global success it craves.

Another priority is the continuing drive to reduce costs. At the end of the financial year, managing partner Mark Dawkins revealed he was looking closely at legal outsourcing, a move that could have dramatic consequences across the firm.

Simmons partners are remunerated through a modified lockstep with seven levels. This provides 80 per cent of pay, with the remainder coming from a performance-related payment of one to 10 profit points.