Earlier this month Addleshaw Goddard announced that managing partner Paul Devitt would continue for a second term in the role. Devitt breezed back into office in an uncontested election, even though the firm has had a tough downturn.
Partners were perhaps buoyed by the firm’s promising half-year results, with turnover growing by 11 per cent to £86.6m - a welcome respite for a firm that has seen pretty much every figure you want to grow shrink for three consecutive years.
Since its 2007-08 zenith, when the firm raked in £196.8m (including other operating income), turnover has fallen by 17.7 per cent to £161.9m in the most recent financial year.
Likewise, in 2007-08 the highest-paid partner at Addleshaws was rewarded with £800,132, whereas in 2010-11 the firm’s top earner got £467,580 - a 42 per cent drop.
That said, figures for 2010-11 were somewhat dampened by the firm’s decision to take cases - such as the Berezovsky/Abramovich litigation - on conditional fee arrangements. But the LPP accounts also show that over the past four years Addleshaws has been forced to dip into its war chest, and then some.
In 2006-07 the firm had £16.6m cash at the bank and in hand. Steadily that number has shrunk until in 2010-11 the firm was left with less than £1m (£913,000).
At the same time Addleshaws has had recourse to a bank loan. In December 2008 the firm entered into a revolving loan arrangement with a three-year term agreement and an option to request a one- or two-year extension.
At the end of the 2008-09 financial year the firm had drawn down £5.5m. Over the next two years that number increased to £20m, then £25m. Net debt at Addleshaws, as of 30 April 2011, stood at £24.1m.
Addleshaws’ move into a 200,000sq ft single-site office at Milton Gate in 2008 has been its biggest expense over the past few years and the main reason for the loan. The firm has contracted (but not provided for in the financial statements) property fit-out costs of £15.5m in total (£2.14m in 2007-08 and £13.4m in 2008-09).
Amid multiple redundancy rounds and partner culls - the most recent, which only affected support staff, being announced in May 2011 - people numbers have also shrunk across the firm. Again, the 2007-08 financial year represented the firm at its peak: 181 partners and 1,242 staff (630 fee-earners and 612 support staff).
In the most recent financial year there was an average of 1,017 employees (excluding partners): 597 fee-earners and 420 support staff. This has led to an 11.5 per cent drop in staff costs, from £63.9m to £56.6m. The average number of partners at the firm has also fallen, to 157.