New Birmingham entrants are not being given an easy ride.
Newcomers include Midlands firms widening their nets, such as Nottingham’s Browne Jacobson and Freeth Cartwright, Leicester-based Harvey Ingram and Northampton’s Shoosmiths. But equally a host of firms that had no previous presences in the region. The latter list includes Bristol’s Bevan Brittan and Beachcroft, Cheltenham’s BPE and Norwich-based Mills & Reeve. Clarke Willmott even went as far as relocating its headquarters there from the South West.
Among the newbies Shoosmiths has the most impressive revenue per lawyer (RPL) figure at £297,000, although this is less impressive when compared with last year’s £303,000. The firm recorded a 9 per cent revenue increase, having experienced year-on-year growth since 2002. Harvey Ingram posted the lowest RPL at £169,000 – a rise of just 0.6 per cent on 2006-07. Among the top 100 firms, Bevan Brittan has the poorest RPL (£180,000), although this is a climb of 8.4 per cent from last year’s figure of £166,000. Some six fee-earners got the chop when the firm announced redundancies earlier this year.
Other firms in the pack had poor RPL results – Freeth Cartwright saw RPL drop by £2,000, although its revenue was up by 7.7 per cent and average profit per equity partner (PEP) by 1.7 per cent.
Mills & Reeve saw RPL fall by £10,000, or 5 per cent, but turnover and PEP results appeared more healthy. The former was up by 10.8 per cent, while the latter edged forward by 7 per cent, albeit this was helped by the firm cutting the total number of equity partners by 3.4 per cent.
This disappointing scenario poses serious question as to whether the second city can sustain such a cornucopia of recent arrivals, with dozens of firms tripping over each other for roles on deals worth less than £5m.
Firms with longer-established presences have fared better. That is either because they have embarked on strategic mergers (such as HBJ Gateley Wareing), aggressively targeted London-based FTSE250 clients (such as Wragge & Co), or because they hold the cream of West Midlands clients (such as Wragges with Cadbury and Martineau with the University of Warwick).
HBJ (which resulted from the merger of Midlands-based Gateley Wareing and Scotland’s Henderson Boyd Jackson) recorded a jump in fees of 29 per cent for 2007-08. PEP might have dropped by 5.6 per cent, but this was accompanied by a significant hike in the number of equity partners – up by 22.7 per cent this year. Net profit rose by 9.6 per cent at the same time as RPL climbed by an undramatic 2.6 per cent, or £5,000. The firm has done well in establishing itself as one of the premier transport firms. First it merged with Shaw & Croft, while at the beginning of this financial year is absorbed niche shipping firm Holmes Hardingham in a bid to expand its contentious shipping expertise. At the end of 2007 the firm opened its first international office, in Dubai, continuing the transport theme with aviation expertise. This means the firm now spans seven offices across three jurisdictions.
Rather than opening up multiple branch offices, which its senior partner Quentin Poole believes duplicates overheads unnecessarily, Wragges has been using its London office to target FTSE250 clients, which take advantage of the lower cost base in Birmingham, this year picking up United Biscuits. PEP has grown by 16.7 per cent this year – an effective measurement of partner profitability given that the firm operates an all-equity partnership. RPL, meanwhile, is up by a comfortable 11.6 per cent and overall revenue by 11.5 per cent.
It was also a good year for two-office Martineau, which increased its PEP figure by 48 per cent, while fees are up by just under 12 per cent. RPL, however, fared less well, nudging forward by 0.5 per cent, while the total number of lawyers increased by 9.7 per cent to hit 113.
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