Wragge & Co

UK 200 RESULTS 2010

Wragge & Co had 23 fewer staff members in 2009-10 compared with 2008-09. But with 32 redundancies, coupled with at least a degree of natural wastage during that period, total headcount would have been even lower had it not been for the firm’s acquisition of a team of 45 lawyers, including 10 partners, from Lefèvre Pelletier & Associés in Paris at the beginning of this calendar year.

The fact that these additions came relatively late in the financial year meant that no uplift was felt on overall turnover. Total revenue fell by 7 per cent, from £103.4m to £96.2m, over the period.

The dip was partly down to Wragges’ exposure to property, which at 28 per cent is one of the highest proportions of any of the major UK firms, and to major corporates, many of which have brought work in-house.

While Wragges has aimed to increase its FTSE100 client base, it has also sought to hedge against the downturn in private sector investment through increasing its presence among public sector clients, particularly in health, waste, transport and education.

Wragges has an all-equity partnership. Remuneration is determined by a committee that comprises the senior and managing partners and three elected members. Partners receive a proportion of the total profit, averaging around 0.75 per cent.

The firm is financed conservatively and has substantial cash reserves.

Other than its Paris launch Wragges has also proceeded cautiously on the investment front, with no major advances on expansion into the Middle East, despite noises to this effect.

For 2010-11 the firm is budgeting a 20 per cent increase in turnover to £115m, largely as a result of the Paris acquisition. This would take it a little south of where it was in 2008.

UK 200 RESULTS 2009

After several years of considerable growth, Wragge & Co saw turnover drop by 18 per cent over the last financial year, coming in just north of £100m.

The firm, which had managed to successfully leverage off a business model that sees City work from FTSE 250 clients such as E.ON channelled up to its Birmingham office, has not managed to come out on top in the current turbulent market.

It embarked on some international expansion, but has been cautious in its approach, holding back from the potential extra overheads this would entail. These investments included a one-partner IP office in Munich and two outposts in China, where it is expecting to tap into growth in the vibrant region between Hong Kong and mainland China.

Wragges has long had a full equity partnership on the basis that this fosters a greater level of quality among partners and operates an entirely merit-based remuneration system. Cash is allocated by a five-member remuneration committee.

The firm made around 30 fee-earners redundant in the autumn, costing it around £3m, and as a result made minimal savings on those taken out of the payroll during the financial year. The cost incurred through redundancy payouts is set to increase this year, with news that it made a further 85 redundancies at the start of the summer.

Nevertheless Wragges still has maintained the profit margin at 30 per cent, assisted by its conservative financing policy, although average profit per equity partner is much lower than in recent years at less than £300,000.