Taylor Wessing

UK 200 RESULTS 2010

While there are still lingering question marks over the extent of its international integration, almost a full decade after the Anglo-German merger that created it, there is no doubt that Taylor Wessing continues to be a tightly run ship.

Turnover was down by 5 per cent overall to £177.9m, with UK turnover falling by 7 per cent to £84.5m. Average profit per equity partner, meanwhile, edged up slightly to £385,000 globally and £453,000 in the UK, while net profit held at £56.3m.

The consistent profitability can be put down to the prudent financial management that has always been a Taylor Wessing calling card. One of the shortest average lockup periods in the City was reduced further in 2009-10 to an impressive 86 days.

Managing partner Tim Eyles’ first full year in the top job was dominated by a rebranding exercise that finally went live in the summer. One of the key elements was a paring down of the firm’s core client list, abandoning country-specific rosters in favour of a select line-up that includes Nike, Deutsche Post, Google and RBS.

It is one of a number of moves that speaks of a firm wanting to be seen as a truly international player. Expansion away from Taylor Wessing’s traditional European bases is also on the cards, with Asia and South America possible targets. Partners have been appointed to put together business plans for key jurisdictions, opening up the possibility of further growth.

IP continues as a strength,but the corporate practice has improved steadily, with the firm acting for a healthy slew of private wealth clients on M&A deals.

There are still discrepancies between the partner remuneration systems in Taylor Wessing’s European and UK practices. For example, there are eight equity bands in Germany and 10 in the UK. The latter system starts on 200 points, rising to a plateau of 700.

UK 200 RESULTS 2009

Taylor Wessing has been dogged by accusations that it is not a fully financially integrated firm ever since its 2002 UK-German merger. The intervening years have seen the firm expand considerably internationally, including a launch in Dubai, but its core profit centres remain the UK and Germany, as well as France, which is currently rebuilding after a raid last year by US firm Nixon Peabody.

As in previous years Taylor Wessing supplied The Lawyer with UK and global figures (the latter is used in the table). Again this emphasises the impression of a divided firm, an impression the firm – and its new management – is keen to quash.

“I believe we’re more integrated than other firms,” argues new managing partner Tim Eyles. “Business development, IT and marketing is all shared and there’s absolutely a pooling of profits. None of our offices operate on a branded or licence basis. If you’re in the firm you’re in the firm.”

Under Taylor Wessing’s structure, profits are allocated via a performance-related formula common to each jurisdiction. The one exception to this is Taylor Wessing’s alliance with Polish firm BSJP, which was struck earlier this year.

Globally the 280-partner firm posted a total revenue of £188.4m, a slight drop on 2007-08, £91.2m of which was generated by the UK. The firm’s global average profit per equity partner (PEP) was £369,000 (in the UK PEP fell by 29 per cent, from £614,000 to £436,000).

Eyles admitted it had been “a tough year”, but pointed to positives such as the continued strength of IP, a core Taylor Wessing practice area, and the private wealth group, which counts several Middle East families among its clients.

Eyles added that the firm avoided large-scale redundancies thanks to schemes such as its ‘holiday purchase’ offer, in which lawyers and staff could sign up for two weeks unpaid leave (and a reduced salary). The successful take-up of this scheme led to a cost saving of around £1.6m last year.

The firm also moved to new premises during the year, at a slightly lower rent than its former home at Carmelite on the north bank of the Thames.

Taylor Wessing rejigged its management structure late last year, moving from a 13-person board to one of just three. The new structure, designed to speed up the decision-making process, heads three new conglomerations of practice groups, imaginatively called A, B and C. A, headed by Rodney Dukes, includes real estate, finance, environment, real estate litigation, insolvency and construction. B is fundamentally corporate, while C, headed by Charles Lloyd, consists of litigation and IP.

As part of the management changes Taylor Wessing also looked at the merit-based remuneration system, now set by Eyles in consultation with the three divisional heads. There is also a new supervisory committee chaired by senior partner Martin Winter and three elected partners.

There are nine equity bands in the UK. A proposal to reduce the number of bands to gel with the German end of the practice, which has eight, is currently on hold. France, following the departures to Nixon Peabody, had only seven equity partners at the end of the financial year.

Financial management has long been a priority of Taylor Wessing’s, and indeed for several years it has been recognised in the market as one of the tightest-run firms in terms of cashflow. Last year the average work in progress at the year-end in the UK was 27.5 days and the average number of debtor days stood at 65.2.

Former managing partner Michael Frawley, who was credit control partner for many years, takes much of the credit for this. Taylor Wessing’s current credit control partner is Nick Moser.