Nabarro in new redundancy round as PEP drops 35 per cent

Nabarro has launched a second round of redundancy talks with 19 staff after posting a 10 per cent fall in turnover for the 2008-09 financial year.

Turnover before adjustments is £126.5m, a 9.7 per cent drop on last year’s unadjusted total of £140.1m.

The firm’s profit margin dropped from 39 per cent last year to 28 per cent this year. As a result Nabarro equity partners will take home 35 per cent less this year than last, with an average profit per equity partner of £375,000, compared with £574,000 last year. The equity spread has tightened to £215,000 to £600,000 this year compared with £250,000 to £980,000 last year.

Senior partner Simon Johnston told The Lawyer: “We’ve commenced redundancy consultations in London and Sheffield with 10 associates and nine other legal and business services staff. We regret having to go that route but felt it was necessary after reviewing the year in figures.”

After having cut budgeted operating costs by seven per cent, such as corporate hospitality, Nabarro made 22 redundancies last year (24 November 2008)

The costs of these job cuts were absorbed in the 2008-09 financial year, as were investments made in lateral hires, which increased from 123 to 135, investments in the graduate programme and money spent on the firm’s European alliance.

Johnston said that he was “disappointed” that Spanish alliance firm Rodes & Sala had decided to pull out of the European alliance but thought “it was the right decision for them in their market at this time and we’ll keep a non-exclusive relationship with them.” (30 June 2009).

The largest practice area continues to be real estate - accounting for 28 per cent of total turnover. Corporate and commercial accounts for 24 per cent, finance for 11 per cent and other areas, including projects, 21 per cent.

“Those areas in growth mode [such as projects and litigation] aren’t big enough to compensate for the drop-off in transactional areas,” added Johnston.