Down but not out
UK200 2009 | By Corinne McPartland
21 October 2013
23 October 2013
6 January 2014
8 November 2013
15 May 2014
While the Bristol heavyweights battled for supremacy, the smaller Southern firms held their own. By Corinne McPartland
Whether you are looking at the South East or South West, legal battlefields do not come much hotter than Bristol. And that is as true in a downturn as it is in a boom.
Legal powerhouses Burges Salmon and Osborne Clarke both saw profitability and turnover take a tumble last year. Burges Salmon, however, managed to overtake Osborne Clarke in terms of average profit per equity partner (PEP).
There has always been staunch competition between the two when it comes to PEP. Burges Salmon was ahead in 2003-04 and 2004-05, but was overtaken by Osborne Clarke in the next two years.
Burges Salmon recorded a drop in turnover in 2008-09, falling by 6 per cent from £68.2m to £64.2m, although with its emphasis on corporate such a drop is negligible in comparison with some of its peers. PEP fell 23 per cent to £409,000.
Given that Burges Salmon’s costs on its one-office operation are famously low, this PEP figure must have been disappointing.
Despite the drop, the firm surged ahead of Osborne Clarke, where PEP dropped by 36 per cent from £554,000 to £352,000.
At £84m, Osborne Clarke’s turnover beats Burges Salmon’s. But unlike the latter, which is an arch-conservative, Osborne Clarke spent the early part of the decade expanding in London and Europe, but is now conspicuously quiet on its international ambitions.
Despite strategic differences and national spread, the two firms have recorded very similar revenue per lawyer (RPL) figures. Osborne Clarke’s RPL dropped from £267,000 to £234,000, while Burges Salmon’s slipped from £274,000 to £228,000.
Clarke Willmott, with its emphasis on property and housebuilding, saw one of the biggest turnover drops in the region, down by 11.2 per cent from £53.2m to £47.2m. The firm made 31 job cuts across its property and commercial services divisions in Bristol, Southampton and Taunton.
Small and steady
The best news is reserved for the smaller players in the South West.
Turnover remained steady for Bristol underdog Bond Pearce. The firm brought in £48m, equal to 2007-08’s figure. Despite the lack of change in turnover, PEP fell slightly from £245,000 to £213,000.
Further down the food chain, Bevan Brittan smashed through its profitability targets, reporting total profit at the 2008-09 year end of £8.6m, up from £6.1m. Revenue at the firm remained flat at £41m.
This is a massive comeback for the firm, much of it down to the careful management of new chief executive Andrew Manning, who replaced former chief executive Stuart Whitfield in September 2008.
Bevan Brittan watchers will note that profitability had been falling at the firm since its demerger from Ashfords in 2004, when net profit stood at £9.4m. But the firm capitalised on the credit crisis after it was drafted in to help local councils reclaim millions tied up in Iceland’s crippled banks.
TLT also managed to secure a number of significant panel wins in the last financial year and was reappointed to Barclays’ business recovery and litigation panels. It recorded a turnover of £39m in 2008-09 from £41m the previous year, a drop of more than 4 per cent.
One firm whose profitability fell through the floor was Southampton’s Blake Lapthorn. The firm abandoned its lockstep after its PEP fell by 68 per cent, dropping to £65,000 from £204,000.
Earlier this year the firm laid off 53 people in two separate redundancy rounds.
Further west, one of the region’s biggest players Foot Anstey saw its turnover rise by 4 per cent from £19.4m to £20.1m, although profit fell largely because of two rounds of redundancies and a move to new premises at Salt Quay House in Plymouth.
Last September it beefed up its corporate, pensions and construction teams as part of a new five-year strategy, which will see the firm focus on organic growth in its four key centres (Exeter, Plymouth, Taunton and Truro) along with a greater push to work with national clients.
But Foot Anstey has a rival in the form of Michelmores, which raided the firm for its insolvency and childcare teams last year.
Under new managing partner Malcolm Dickinson the firm saw one of the biggest turnover growths last year, with an 11.8 per cent increase from £16.9m to £18.9m. Dickinson has also set an ambitious turnover target of £50m in five years.
The firm’s property and corporate teams have managed to come close to budget due to a high volume of central and local government work as well as its longstanding links with Exeter University.
You would expect the region’s legal heavyweights, with their exposure to the transactional market, to suffer the most. But the downturn has allowed the smaller firms in the South West to shine.