Ashurst, Bird & Bird, Herbert Smith, Nabarro and SJ Berwin are the star performers of the financial year at the half-year stage.
All five firms have increased their fee income by more than 20 per cent during the first half of the year.
Ashurst and Herbert Smith both increased revenue by 25 per cent while Bird & Bird was not far behind with a 24 per cent rise.
Nabarro and SJ Berwin followed with 21 and 22 per cent respectively.
Such was the boom in the first four months of the year that anything less than a 15 per cent rise at this stage is looking distinctly average.
However, although the majority of firms have had a strong first half, many managing partners are cautious in their predictions for the next six months.
For the full report on law firms’ financial health in 2006-07, see The Lawyer UK 200, published in September this year.
That analysis was boosted by online coverage with Top of the PEPs, which was updated daily with law firms’ results as they came in.
Meanwhile, for results from the top 30 UK firms at the 2007-08 half-year mark, and commentary from the firms on the figures, see the table below.
TOP 30 UK FIRMS – HALF YEAR RESULTS(Click a firm’s name to see comments about its results.)
| Rank | Firm | Turnover (% increase) | Turnover (£m) |
| 2006-07 | name | at 2007-08 half-year | at 2006-07 full-year |
| 1 | Clifford Chance | 18 | 1,194 |
| 2 | Linklaters | +20 (est.) | 1,121 |
| 3 | Freshfields | 19 | 986 |
| 4 | Allen & Overy | 18 | 887 |
| 5 | DLA Piper | 20 | 446 |
| 6 | Lovells | 10 | 425 |
| 7 | Slaughter and May | +20 (est.) | 417 |
| 8 | Eversheds | 10 | 356 |
| 9 | Herbert Smith | 25 | 334 |
| 10 | Ashurst | 25 | 275 |
| 11 | Simmons & Simmons | 16 | 250.4 |
| 12 | Norton Rose | 23 | 233 |
| 13 | CMS“>CMS Cameron McKenna | 21 | 197.4 |
| 14 | Pinsent Masons | 10 | 192.4 |
| 15 | SJ Berwin | 22 | 189 |
| 16 | Addleshaw Goddard | 15 | 176.7 |
| 17 | Berwin Leighton Paisner | 20 | 169 |
| 18 | Taylor Wessing | TBC | 161 |
| 19 | Denton Wilde Sapte | 10 | 155.7 |
| 20 | Clyde & Co | 12 | 135 |
| 21 | Hammonds | TBC | 127.6 |
| 22 | Nabarro | 21 | 123 |
| 23 | Bird & Bird | 24 | 115.6 |
| 24 | Wragge“>Wragge & Co | 15 | 112.6 |
| =25 | Beachcroft | TBC | 112 |
| =25 | Salans | 37 | 112 |
| 27 | Macfarlanes | 18 (est.) | 103 |
| 28 | Halliwells | 7 | 86.2 |
| 29 | Olswang | TBC | 83.1 |
| 30 | Osborne Clarke | TBC | 82.8 |
(Source: The Lawyer)
What the firms had to say…
Addleshaw Goddard managing partner Mark Jones said: “It has been a solid first half of the year, with corporate and finance reporting particularly strong performances. We are quietly confident about the next six months, but it’s far too early to make any realistic predictions for the year end, particularly given the current uncertainty in the financial markets.”
The Lawyer’s translation: First six-months? Could do better. Fingers crossed the next six months pick up a bit, otherwise questions will be asked.
Allen & Overy managing partner David Morley: “This was driven by an exceptionally strong first three months, good results from our international offices and a continuing buoyant market for our corporate/M&A practice. Since mid August we have seen a significant slowdown in some areas arising from the so-called ‘credit crunch’. While this could reduce our rate of growth in the second half if it continues, we remain cautiously optimistic.”
The Lawyer’s translation: Thank God corporate has been busier than ever – it might mean no one will notice that our CDO lawyers have nothing to do. We’d better break the £1bn-mark by April or we’ll really be lagging the rest of the magic circle.
Ashurst managing partner Simon Bromwich said: “Activity levels are good and we have plenty of WIP. September was slightly lower but our finance team was largely unaffected. We’re excited about Tokyo, Singapore and the Middle East.”
The Lawyer’s translation: I’m feeling quite smug that we don’t have legions of banking lawyers and we are raking it in right now. Just as well: that Abu Dhabi office launch is going to cost a pretty penny.
Managing partner Neville Eisenberg said: “We’ve seen strong growth, which has been across the board.”
The Lawyer’s translation: It’s not just about real estate you know.
Managing partner David Kerr said: “I think we’ve expanded a lot internationally. We’re finding that cross-border transactions and stronger client relationships are fuelling growth.”
The Lawyer’s translation: Unlike Olswang, Taylor Wessing, Osborne Clarke and Field Fisher Waterhouse, we’ve got offices all over the place nowadays. And thank God for that, cos they’re the ones that are bringing in the cash.
Clifford Chance global managing partner David Childs said: “We had a good first four months of the year and a very strong October so we would expect to be up on the same period last year. We are definitely in double figures.”
The Lawyer’s translation:We’re so big that we haven’t counted all of the revenue from our little offices yet. As far as I can tell, we’ve done pretty well – surely we’ve beaten A&O.
Managing partner Dick Tyler said: “We have made good progress against our targets for the year. We’ve seen significant increases in fee income in all parts of our business. Recent activity levels have been encouraging and we are optimistic about the prospects for the remainder of the year.”
The Lawyer’s translation: 21 per cent growth? 21 per cent growth! Can you believe that? We might even hit £250m by next year.
DLA Piper joint CEO Nigel Knowles said: “We have seen a very significant step up in the corporate group, which is taking more market share. Finance, projects and everything regulatory has also done well.”
The Lawyer’s translation: Litigation’s a dog.
Eversheds chief executive David Gray said: “The second half of the year looks promising as we continue to build on our high profile panel wins with Tyco, Severn Trent, Samsung and Transport for London.”
The Lawyer’s translation: We know 10 per cent growth ain’t that good but fingers-crossed those high-profile panel wins pull us through the next six months.
FRESHFIELDS BRUCKHAUS DERINGER
A Freshfields source said: “We’ve had growth across the board. Every group has done well. We were really busy in the first quarter but no one should assume that the second half will be like the first half.”
The Lawyer’s translation: We needed some good news. And we managed that with a lot fewer partners than last year.
A source within Halliwells said: “The Manchester market doesn’t have the peaks and troughs of the other markets.”
The Lawyer’s translation: Steady as she goes. We’re all a bit tired after those mergers anyway.
A spokesman for Herbert Smith said: “Finance has seen the greatest level of revenue growth and has gone up a lot more than 25 per cent. Paris has done really well and is up by more than 25 per cent. Dubai has already beaten its first year target and we are only half way through.”
The Lawyer’s translation: Last year was pretty dire for us with finance falling way behind our four-year target. If the strength of international markets lets us mask our slumping corporate practice we can push finance to the forefront and everything will be okay.
A Linklaters source commented: “Our first half-year has been stonking and what you expect from the firm. It did tail a little on the last month but is steady and we’re looking at other options to keep us buoyant.”
The Lawyer’s translation: So what if the credit crunch has left us twiddling our thumbs? We can always plunder the mid-market.
Lovells managing partner David Harris says: “The credit crunch is creating real opportunities for the counter-cyclical sides of our practice, particularly dispute resolution and insolvency, as well as in capital markets. Our counter-cyclical strength and international reach means we expect to see changes in the economy working in our favour.”
The Lawyer’s translation: Our corporate practice has been disappointing despite the biggest bull market in years. But hopefully the other practices can pull us out of the mire because 10 per cent looks a bit lame compared to everyone else.
Nabarro senior partner Simon Johnston said: “We’re 21 per cent up on last year, particularly strong in litigation and there’s no slow-downs.”
The Lawyer’s translation: Every day is mid-market day.
Norton Rose chief executive Peter Martyr: “Our books till the other side of Christmas are healthy but more subprime related setbacks could make a difference. At the moment though I’m reasonably optimistic.”
The Lawyer’s translation: Considering the mess we were in two years ago, we’re absolutely rocking but the outlook’s bleak. Please don’t drag us back there!
Pinsent Masons managing partner David Ryan said: “It’s the third year of double-digit growth in a row, and now we’re about a year ahead of our merger plan.”
The Lawyer’s translation: There was nothing in the merger plan about actually increasing revenue but we’re not going to turn it down now that we’re on a roll.
A spokesperson for the firm said: “Current work levels remain high but the ongoing uncertainty means the firm cannot become complacent.”
The Lawyer’s translation: Be afraid, be very afraid. You want £600,000 average PEP? You’d better work for it. Hmmm, it’s been a while since we trimmed the partnership…
SJ Berwin senior partner Jonathan Blake said: “The success of the first half of this year has been driven not only by the London office but also our offices in Europe. Germany and France have been particularly successful in private equity. And finance has also proved to be successful despite the credit squeeze.”
The Lawyer’s translation: Sitting in the mid-market has been rather comfortable for the last few months. The credit crunch has meant the magic circle private equity and finance teams will be worse off than us.
A Slaughter and May source said: “Our performance is in line with expectations.”
The Lawyer’s translation: How dare you ask?! Do you not know how good we are? (But not quite as good as last year.)
Wragge & Co managing partner Quentin Poole said: “We weren’t beneficiaries of the corporate and M&A boom to the extent that the Magic Circle firms were during the last year or so, so we haven’t really been affected by the crunch, at least not yet.”
The Lawyer’s translation: We may not have had the most amazing figures but at least we’re consistent.
Old paradigm
There’s something strangely depressing about these figures and the sad little comments accompanying them. So what if a firm’s fee income is up by 10, 20 or 50%? All the partners in all the firms listed are earning more than any rational person could reasonably need or even wish for, and I wonder what can possibly motivate them to carry on pushing for even more money, year after year. Do any of them think or care about whether they are actually contributing anything to the overall happiness of the nation? It’s a reminder of how so many people know the price of everything but the value of nothing, and I’m deeply grateful to have escaped from this culture of greed.