Triumph of the mid-market

This was the year of the mid-size. When Berwin Leighton Paisner (BLP) released its 40 per cent profits hike in May, some thought it was a blip. It wasn’t.

The Lawyer’s top 50 is a preview of The Lawyer UK100, out in September. Most figures are still provisional at this stage, so readers should refer to the full report in two months, but already a clear trend is emerging.

The top 50 firms’ revenues and profits table confirms that the magic circle’s dominance of the legal market took a knock last year.
Magic circle firms are still on the whole recording average profit per equity partner (PEP) in the £600,000 range (except for Clifford Chance, which dropped 13 per cent to £558,000), but there are plenty of firms comfortably recording average PEP in the upper £400,000 range – and gunning for more next year.

BLP, DLA, Nabarro Nathanson and SJ Berwin posted significant increases in both profits and turnover. Notably, all four have a good spread of business between corporate and real estate. The dearth of major M&A, not reflected in last year’s figures, has finally been felt by the biggest firms in the market.

However, premier firms Allen & Overy, Clifford Chance, Freshfields Bruck-haus Deringer and Linklaters were not this year’s worst performers in profit terms.

Hammonds and Wragge & Co, two national players which performed strongly up until a couple of years ago, had disappointing profits figures. Wragges’ dropped by 17.6 per cent to £210,000 and Hammonds by 17.5 per cent to £272,000. Yet there is nothing inherently frail about the national model. Eversheds’ profits were up by over 7 per cent, while DLA is consistently able to parlay its small equity partnership into high profits – unlike Wragges, which has all equity partners.

At the other end of the table, the strong profits performance turned in by regional firms such as Osborne Clarke and Shoosmiths, where average partner remuneration rose by 30 per cent and 66.5
per cent respectively, was matched by the new entrants to the leading pack. Leeds-based Walker Morris, Newcastle’s Dickinson Dees, Manchester’s Halliwells and Bristol’s Burges Salmon all enter the charts with solid turnover increases.

Top 50 law firms
Rank Firm 2003-04 Turnover (£m) 2002-03 Turnover (£m) 2003-04 Profit per equity partner(£K) 2002-03 Profit per equity partner(£K)
1 Clifford Chance 941.0 978.0 558 644
2 Freshfields 785.0 800.0 675 700
3 Linklaters 720.0 720.0 640 734
4 Allen & Overy 649.0 647.0 607 675
5 Lovells 377.0 375.0 605 644
6 Eversheds 296.2 284.9 330 308
7 DLA 275.0 233.0 475 460
8 Slaughter and May 248.0 253.5 778 819
9 Herbert Smith 243.0 241.0 700 748
10 Norton Rose 205.0 205.0 370 390
11 Ashurst 193.0 197.0 500 590
12 Simmons & Simmons 178.0 176.9 275 300
13 Denton Wilde Sapte 174.0 177.0 325 313
14 Camerons 165.0 174.0 415 401
15 Hammonds 136.0 137.1 272 330
16 Addleshaw Goddard 125.2 122.0 321 266
17 BLP 102.0 91.0 425 303
18 SJ Berwin 99.2 91.3 510 409
19 Clyde & Co 96.0 90.0 460 400
20 Pinsents 91.6 95.1 276 276
21 Irwin Mitchell 91.0 80.0 485 460
22 Nabarro Nathanson 87.3 84.3 345 293
23 Salans 87.2 83.7 339 397
24 Richards Butler 86.0 91.0 415 450
25 Beachcrofts 81.8 80.0 240 228
26 Wragge & Co 79.3 79.3 210 255
27 Barlow Lyde & Gilbert 77.3 72.1 380 351
28 Bird & Bird 71.2 62.5 327 317
29 Macfarlanes 67.0 66.1 720 773
30= Taylor Wessing 64.0 65.0 348 344
30= Osborne Clarke 64.0 60.9 303 233
32 Masons 62.0 63.7 247 234
33 Olswang 59.3 48.0 345 290
34 Stephenson Harwood 58.5 62.5 234 200
35 Lawrence Graham 57.6 54.9 416 373
36 Shoosmiths 55.0 44.3 227 136
37 Withers 49.3 49.3 310 278
38 Holman Fenwick 48.4 46.0 286 236
39= FFW 47.0 43.9 325 290
39= Reynolds Porter 47.0 40.3 285 241
41 Travers Smith 45.5 43.0 400 390
42 Watson Farley 45.0 48.0 358 358
43 Charles Russell 44.6 43.8 265 255
44 Burges Salmon 42.2 36.5 335 300
45 McGrigors 41.1 41.5 238 236
46 Halliwell Landau 40.4 35.5 370 350
47 Dundas & Wilson 40.0 40.0 237 220
48= Walker Morris 39.5 36.0 520 496
48= Dickinson Dees 39.5 35.8 280 300
50 Trowers & Hamlins 38.7 37.1 250 250
 
Source: The Lawyer

Top 5 profit increases
Firm %
1 Shoosmiths 66.5
2 BLP 40.0
3 Osborne Clarke 30.0
4 SJ Berwin 24.6
5 Holman 21.1
 
Top 5 profit decreases
Firm %
1 Wragge & Co 17.6
2 Hammonds 17.5
3 Ashurst 15.2
4 Salans 14.6
5 Clifford Chance 13.3
 

Top 5 turnover increases
Firm %
1 Shoosmiths 24.1
2 Olswang 23.5
3 DLA 18.0
4 Reynolds Porter 16.6
5 Burges Salmon 15.6
 

Top 5 turnover decreases
Firm %
1 Stephenson Harwood 6.4
2 Watson Farley 6.2
3 Richards Butler 5.5
4 Camerons 5.1
5 Pinsents 3.6