This year has been kind to the Geordies, with Watson Burton in particular recording blockbusting financials.
Well clear of their regional competitors and most national rivals, partners at the firm toasted an average profit per equity partner (PEP) for 2005-06 that was up by 38 per cent, blasting from £515,000 last year to an astonishing £712,000 this year.
Turnover at Watson Burton hit £22.9m for the financial year ended 30 April, up a mammoth 42 per cent from £16.1m in 2004-05.
Citing good performance across the board and efficient management of overheads, managing partner Andrew Hoyle modestly described the champagne financials as just “a good year”. He also highlighted growth in the firm’s corporate and construction practices, as well as the success of the 10-partner Leeds office it opened last June.
However, Hoyle predicted that PEP for the 2006-07 financial year would dip due to planned investment. As reported by The Lawyer (12 June), Watson Burton is opening an office in London in August and has signed a 12-month lease for a spot in the city’s iconic Swiss Re building – better known as The Gherkin – last Thursday (13 July). The new base will focus on property, construction and insurance work, and marks the first presence in the capital for a North East firm.
Meanwhile, Tyneside titan Dickinson Dees was also gearing up for action in the Big Smoke. Although still shying away from a full-scale London base (the firm has long been split over the need for a City presence), the Geordie giant has rented a new, larger London facility on Gloucester Place in the West End.
Managing partner Neil Braithwaite said: “What we’re looking at is a London facility more than a Regus-style office, similar to [the London facility of] Burges Salmon. We’ve always had a space in London, but we’re scaling it up very slightly.”
He added: “We’re not employing people to work in London full time, but on any given day of the week there’ll be Dickinson Dees lawyers in London. The reason we’re not opening an office is because it changes the nature of the offering and means different pressures, overheads, recruitment etc.”
Back in Newcastle, however, Dickinsons partners were shaking their heads at the year-end figures.
While turnover was up for the tenth consecutive year, rising by 10 per cent from 2004-05’s £43.8m to hit £47.8m, PEP ebbed from last year’s £326,000 to £320,000.
Neil Braithwaite said the decrease reflected the firm’s £4m move to new premises in Newcastle, and remarked that “without the expenditure, the figure would have been about £340,000”.
Partner numbers at the firm have increased from 64 to 69. Ebullient about the growth, Braithwaite said: “This growth has been fuelled by good performance across the board, but in particular a number of corporate mega-deals. The size of these deals sets us apart from our peer group.
“There has also been particularly strong performance in our property group, which has gone forward in leaps and bounds, and we’ve been building specialist practices.”
Elsewhere in the city, Ward Hadaway saw turnover up, yet profit static. The top-line figure for 2005-06 was £21.6m, a rise of 6 per cent from 2004-05’s £20.6m, but average PEP stalled at £370,000.
Eversheds, whose Newcastle base is the other big-hitter in the region, enjoyed a good year, with PEP rising by a healthy 20 per cent, hitting £420,000 after 2004-05’s £350,000. Rober Muckle is a relative minnow with turnover of £8.1m, but its PEP is healthy at £345,000.
While turnover at Watson Burton remains around half that of Dickinsons’, its PEP dwarves its bigger local rival and another storming year could see it closing the gap. If Watson Burton’s London venture is a success – which is by no means guaranteed – Dickinsons partners could be even more envious of their neighbours. Partners at Eversheds and Ward Hadaway can only dream of such riches.