Herbert Smith sees PEP return to 2006-07 levels as turnover nudges up

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  • That's pretty lame given over half of their partnership is now non-equity. Guess that means their real profit per partner is £420,000, which is faaaaaarrrrrrrr behind their peer firms. Or what used to be their peer firms!

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  • Revenues up 3%.
    Profits down 6%.
    Internet surfing by London corporate partners up 50%.
    Partner satisfaction with Jonathon Scott and David Willis down 75%.
    Number of litigation partners who will be demanding more corporate heads on the chopping block up 100%!

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  • Now now. Let's not get all snarky. This decline in profitability is all a part of the master plan. We're going to address the issue by bringing more partners into the ranks of management, writing numerous papers, hiring an outside consultant, opening more offices in far flung regions and socialising the issue so as to not damage our collegial culture. We're calling it Project Wishful Thinking.

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  • Bloody good idea Willis! Let's make sure to raise it at the next GPM.

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  • Right now I wish I was a partner at Linklaters. Sigh.

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  • Oh sure. Report on our profits being down 6%. You missed the real story, which is that our collegiliality is up 6%!

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  • I should have voted for Tim Parkes for senior partner. What was I thinking?!?

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  • Partnership at Herbert Smith £840,000. Reading these comments, priceless!

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  • I hope Freehills got a due diligence out in the merger agreement!

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  • I suppose this means the minimum track from non-equity to equity will now be extended again from four years to five years.

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  • Wow. PEP down almost 20% from when David Gold was at the helm. Bring back the Gold Standard!

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  • Scotty did you even read the article? profits are down 7% not 6%

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  • Kudos to the partners of Herbert Smith! This shows a real sense of social responsibility with the Herbert Smith partners taking a 7% pay cut and sharing some of the pain with all of the associates and support staff who have been made redundent. Partners at lesser firms would never be so willing to take this kind of pay cut. Good for you noble Herbies!

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  • How long before they drop out of the silver circle?

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  • This ridiculous castigation of a firm at the top of the Bronze Medallion group is pathetic.
    Grow up. All of you.

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  • To the first comment at 12:27 pm. I think is rather the other way around. Same profit divided into less equity partners gives a higher PEP.

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  • Some of the commentary here is a bit hysterical. Herbert Smith is still one of the finest litigation shops in the world, with an excellent corporate and finance practice. The fact that its got the results it has, with such a poor deal environment (which effects everyone) shows the strength of its disputes group. Everyone needs to settle down and stop making irresponsible comments.

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  • Hysterical. But true nonetheless.

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  • The first post at 12:27 am is correct. If half of the firm partnership is non-equity then the real "profit per partner" is roughly half of their reported PEP - which is "profit per equity partner". One half of their reported profit per equity partner of £840,000 equals a profit per partner of £420,000. Firms use non-equity partners to hide the real profitability of the partnership as a whole.

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  • For goodness sake you are all obsessed with profit and PEP levels. Are you capitalist robots? What happened to your real interests before you sacrificed them for the tedium of commercial law?

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  • Not surprised to see profits at the Magic Circle firms increasing by 13% Clifford Chance and 7% Allen & Overy when Herbies is declining. Indeed the gap is widening.

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  • Anyone who wasn't obessed with profit and PEP levels was made redundent by David Willis.

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  • Have they announced how many redundencies will be made after the merger with Freehills? Or will the next round of redundencies be "performance related" ETLs.

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  • What is ETLs?

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