Growth slows at Stewarts but PEP outshines peers at £1.1m

Growth has slowed at Stewarts Law following a five-year meteoric rise, with revenue increasing by 3.5 per cent from £45.2m in 2012/13 to £46.8m in 2013/14 while net profit stayed flat at £20.4m.

The modest revenue increase is a marked contrast to five years of stratospheric performance for the firm, which had been growing by more than 20 per cent year-on-year since 2007.

By the end of 2012/13 the firm had boosted turnover by 29.5 per cent to £45.2m up from £34.9m in 2011/12. That followed a 22.5 per cent revenue rise the year before from £28.5m.

Between 2007/08 and 2012/13 the firm stormed up the ranks, almost quadrupling turnover from just £11.9m to £45.2m.

Last year’s five per cent drop in net profit from £20.5m was the first downturn in three years after a staggering 70 per cent increase between 2011 and 2013. In 2011/12 net profit stood at £12m increasing to £20.5m a year later.

However the firm has produced an average profit per equity partner (PEP) figure of £1.1m, the same level as a year ago (3 July 2013). Stewarts Law smashed through the £1m barrier in 2012/13, putting it in the same league as the magic circle.   

The £1.1m remuneration package meant that Stewarts’ 18 full equity partners took home more than their peers at Herbert Smith Freehills where PEP stood at £741,000 and Hogan Lovells where PEP was at £721,000.

Stewarts’ managing partner John Cahill commented: ”In many ways 2013/14 was a transitional year for Stewarts Law with focus given to consolidating the extraordinary growth achieved over the last six years and investing in new contingent fee business. The firm has done well in these circumstances to continue its pattern of growth, maintain profitability at a high level and create a balance sheet free of external debt by the year end.

The bottom of equity rose from £500,000 in 2012/13 to £547,000 at the end of the last financial year. The top of equity stuck at £1.4m.

Total remuneration to all the firm’s 49 partners adds up to £24.7m this year, up from £23.8m the year before.

The firm has been reinventing itself as a heavyweight litigation contender over the past five years. Last year it handled several big cases including the ongoing dispute between the Royal Bank of Scotland and its shareholders, heading for court this year (18 September 2013).

The firm is no stranger to flexible billing and is touted as one of the more willing to embrace third-party funding. It is said to have relations with several funders and funded a part of its RBS dispute using third-party funder Argentum (4 April 2013).