Herbert Smith lays down the gauntlet

Looks like Herbies got in first for a reason. It’s usually the earliest to declare its results simply because its financial year ends in March. But this year, I reckon it was on a mission – to dispel the notion that it had dropped off the pace. With PEP over a million for a first time, it’s thrown down the gauntlet to Ashurst.


Top of the PEPs Revenue PEP Table

Looks like Herbies got in first for a reason. It’s usually the earliest to declare its results simply because its financial year ends in March. But this year, I reckon it was on a mission – to dispel the notion that it had dropped off the pace. With PEP over a million for a first time, it’s thrown down the gauntlet to Ashurst.

About time too. Last year Herbies posted the worst PEP improvement of any major City firm – it actually dipped, for goodness’ sake – and managed a mere 12.8 per cent increase in turnover.

After such a poor performance (after all, its rivals were crowing about double-digit increases last year) Gold and co were under pressure to show Herbies hadn’t lost the plot.

And yet with 25 per cent increase in turnover I’m wondering why profit didn’t rise even higher. Costs remained predictable, so in normal circumstances you’d expect the vast majority of that extra revenue to go straight to the bottom line. Last year, for example, Allen & Overy converted 83 per cent of its turnover rise into pure profit.

Meanwhile, only seven firms managed average PEP of over a million last year. Who’s next to join? Ashurst, surely?

Previous blogs:

27-June-2008, Walker Morris: Turn down the volume

27-June-2008, Hill Dickinson: A tale of two cities

20-June-2008, LG: “frustrating and disappointing”

13-June-2008, Trowers & Hamlins: set back, or de-railed?

12-June-2008, Stephenson Hardwood: joining the club

11-June-2008, Ward Hadaway, Leeds and Hoyle: the long game

10-June-2008, Lewis Silkin: credit where due?

09-June-2008, Freshfields: equity cull pays off

06-June-2008, Martineau Johnson: mission accomplished?

05-June-2008, Addleshaw Goddard: babies and bathwater

04-June-2008, Technology firms: RPP reveals all

02-June-2008, The magic circle – a new ring leader to emerge?

30-May-2008, Berwin Leighton Paisner: could do better

29-May-2008, Links to take CC’s crown?

28-May-2008, FFW: surprise performer

22-May-2008, Herbert Smith lays down the gauntlet

19-May-2008, Second tier is out to impress