Partner profits at Lovells have nose dived, with average profits per equity partner (PEP) plunging 21 per cent from £541,000 to £427,000.
Meanwhile, the top and bottom of equity has also shrunk, to £502,000 and £201,000 respectively. Meanwhile, the top 10 City firm’s turnover dropped by 3 per cent to £366m in the 2004-05 financial year. Lovells’ London office, which accounts for 56 per cent of overall revenues turned over £205m.
Lovells’ managing partner David Harris admitted that the results were “disappointing”. He attributed the drop in profitability partly to the costs incurred by the restructuring programme which saw the firm axe 25 partners earlier in the year. It is understood that two thirds of the restructuring costs were absorbed in the 2004-05 financial year.
Harris also argued that the level of profitability at his firm is distorted as the firm has more equity partners than some of its rivals. Lovells has just 92 non-equity partners which represents 27 per cent of the partnership.