Berwin Leighton Paisner (BLP) has unveiled its 2012/13 profit figures, revealing a 39 per cent drop in average profit per equity partner (PEP) and a 38 per cent drop in net profit.
In what has amounted to one of the worst-kept secrets in the UK market this year, BLP confirmed that its bottom line had cratered in the face of dwindling deal activity. The firm also blamed a “more aggressive” magic circle for the lower level of deals through its doors.
During the 2012/13 financial year net dropped from £63.6m to £39.4m, giving the firm a profit margin of 17 per cent, while PEP fell from £660,000 to £401,000. A spokesperson for BLP said the firm saw the results as “a blip”.
“We suffered from a reduction in the transactional market which had an impact on turnover,” added the spokesperson. “In addition, we came up against the magic circle more often, who are competing more aggressively on price.
“Our growth over the last five years has been strong and for this financial year Q1 looks good and activity levels continuing into Q2 also looks good. We very much see 2012/13 as a year of integration during which we also invested in overseas offices in Germany and Beijing.”
Last week The Lawyer revealed that Clyde & Co had knocked BLP out of the UK200 top 15 corporate table after corporate revenues fell by 14.2 per cent from £67.9m to £58.25m (23 September 2013 ). Real estate turnover also contracted at the firm, falling by 2.3 per cent from £62m to £60.6m.
There has been geographical expansion at the firm with office launches in Berlin and Frankfurt after poaching a team of lawyers from Linklaters in 2011 (19 September 2011 ). In 2012/13, BLP launched in Beijing, the firm’s first presence in mainland China and third office in Asia (20 February 2013 ).
However, falling profits has also led to job cuts and partner exits. In June this year the firm concluded a redundancy consultation, confirming it would be cutting more than 100 positions (5 July 2013 ), while throughout recent months a significant number of partners have exited the firm.
They include former Managed Legal Services head Patrick Somers, who joined DLA Piper (16 September 2013 ); global private equity head Raymond McKeeve, who left to join Jones Day (20 August 2013 ); contentious tax head Liesl Fichardt, who was hired by Clifford Chance (4 September 2013 ); and acquisition finance partner Andrew Bamber.
On the seemingly high number of partner exits the spokesperson said: “A firm of our size always has partners leave from time to time. People come and go and that’s just how it is. We’re continually assessing partners.”