Macfarlanes’ growth sluggish as corporate and property take a hit

Macfarlanes experienced muted growth over the past 12 months, with turnover rising by 6.7 per cent while average profit per equity partner (PEP) remained static at £1.1m.


<a class=Macfarlanes‘ growth sluggish as corporate and property take a hit” /> Macfarlanes experienced muted growth over the past 12 months, with turnover rising by 6.7 per cent while average profit per equity partner (PEP) remained static at £1.1m.

Despite ;the ;modest results, senior partner Charles Martin said he was satisfied with the total revenue of £110m.

“Given ;the ;market conditions, all our practice areas performed well,” he said.

Macfarlanes traditionally relies on the corporate group for almost half of its revenue and, as a single-site firm, does not have any foreign offices in emerging markets.

Simmons & Simmons, for example, boosted revenue by 15.8 per cent to £290m, and last week the firm announced that PEP had rocketed by 21.6 per cent to £647,000.

Macfarlanes’ ;closest competitor Travers Smith has yet to release its results because its financial year finishes at the end of July.

Last year Macfarlanes achieved ;double-digit growth in both turnover and PEP.

Martin said this year’s figures should be taken in that context, adding: “The revenues show a modest increase, which isn’t bad given how a good deal of our revenue relates to the UK.

“We haven’t had an exchange-rate benefit, and it’s not bad given that the credit crunch happened earlier than halfway through the year.”

Macfarlanes has worked on some of 2008’s largest deals: it represented aluminium miner Alcoa on its share raid on Rio Tinto as well as Pernod Ricard on its acquisition of Absolut Vodka maker Vin & Sprit – two transactions with a combined value of more than £10bn.

The ;firm’s ;property practice has also been affected by the market.

“Property’s ;been ;a challenging market for a little while,” Martin said. “We’re lucky that quite a lot of our property clients are property funds and they’ve been more active than the market as a whole.”

Macfarlanes’ prestigious private client group has continued to do well. The practice, ;which ;counts Richard Branson among its clients, benefited from advising on this year’s tax changes for wealthy individuals.

Although PEP did not grow, it remained at a level matched only by Slaughter and May outside the magic circle.

Martin added that profit was also hit by the firm’s investment in its new Cursitor Street office.