Herbert Smith Freehills (HSF) has unveiled its first financial results since merging, with revenues of £471.2m in the six months from October 2012.
The firm posted net profit of £137.2m for the same six months between October 2012 and April 2013. This compares to Herbert Smith’s full-year results of £480m in the 2011/12 financial year, prior to its October merger with Freehills.
CEO David Willis said: “We made good progress in respect of our two main priorities in this period, clients and integration. Inevitably however, work flow was impacted by on-going uncertainties about the Eurozone and also challenging market conditions in Asia and Australia.
“It was good to see activity levels picking up across some of our practices and regions in the last quarter of the financial year. This trend has continued into the current financial year. Our priority now is to maintain the momentum. We are committed to making significant further headway across all areas of performance over the next 12 months.”
Legacy Herbert Smith partners voted on a full financial merger with Australia’s Freehills in June 2012 (21 June 2012), with the combined firm launching in October. Legacy Herbert Smith required 75 per cent approval from partners while Freehills required 85 per cent.
However, the firm has been hit with a number of high-profile exits from the disputes practice. In London these included Ted Greeno, who quit for US firm Quinn Emanuel Urquhart & Sullivan (27 March 2013), London corporate fraud and asset tracing head Simon Bushell for Latham & Watkins (7 February 2013) and Kevin Lloyd, who exited for Debevoise & Plimpton (5 December 2012).
One former insider recalls: “Some big litigation players maintained [at the June partner meeting] it wasn’t worth effectively doubling the firm’s size just to get into one more jurisdiction, or at least what is, on the face of it, one more jurisdiction – and a relatively small one at that.”
In May, The Lawyer revealed that legacy Herbert Smith issued a cash call of up to £20m to all equity partners (13 May 2013) in an effort to boost its capital structure as part of the firm’s planned financial integration with Australia’s Freehills. Around 170 equity partners at the firm were affected by the move, with those in the equity asked to contribute £2,000 per equity point.
The merged firm has also made a number of hires this year, adding white-collar partner Rod Fletcher from Slater & Gordon in February (12 February 2013) and launching in Germany with the hire of corporate partner Ralf Thaeter from former alliance firm Gleiss Lutz (13 February 2013).
Legacy Herbert Smith also hired a group of litigators from Chadbourne & Parke, including litigation chief Thomas Riley, ahead of its New York office launch last September (2 August 2012). The firm’s decision to launch in New York was announced to partners came off the back of Project Blue Sky – Herbert Smith’s blueprint for internationalisation.
Read more about HSF exits in our feature: Out of Practice.