Mixed fortunes: M&A firms ride the wave, litigation firms fall behind

Although 2005-06 was a bumper year for most of the top 50, there were some firms that did not enjoy outstanding financial success.

Many of these had insurance and EC3 practices rather than premium-billing M&A businesses and are traditionally less able to capitalise on the corporate bull market.

Among the firms that did less well in 2005-06 was Reynolds Porter Chamberlain (RPC), the only firm in the top 50 to post a drop in profit.

In 2005 profit per equity partner (PEP) stood at £295,000, but last year that figure fell by 3 per cent to £286,000. However, it should be noted that RPC is one of the few all-equity partnerships in the top 50.

Clyde & Co, which added £13m to turnover, was one of three firms to post a static profit. Its 2005 acquisition of aviation boutique Beaumont & Sons, which had an average PEP of £280,000, plus continued overseas expansion accounted for the disappointing result.

Litigation specialists Barlow Lyde & Gilbert - an all-equity partnership - and struggling regional firm Cobbetts also saw no growth in PEP last year. (For more on Cobbetts, see Analysis page 21.)

Cobbetts' PEP of £190,000 was the lowest in the top 50, trailing the second-lowest, Beachcroft's, by some margin.

The poorest performers in turnover terms were Denton Wilde Sapte (down 4 per cent), Barlows (down 1 per cent), Richards Butler (up 1 per cent), Salans and Norton Rose (both up 3 per cent).

Those firms posting the biggest rises in PEP included a number that had recovered from disappointing performances in the previous couple of years. Hammonds increased PEP by 61 per cent, but only to £328,000. Stephenson Harwood, which has been quietly restructuring, had a PEP increase of 45 per cent to £407,000.

top 50 firms by turnover