Number crunching: Wragge & Co
13 February 2012 | By James Swift
8 October 2013
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29 July 2013
According to managing partner Ian Metcalfe, Wragge & Co was once described by one auditor as, “the most conservatively-financed law firm in the UK”.
Looking at the firm’s cash reserves, it is easy to see why. In 2006-07, when turnover stood at £114.8m, it had £21.1m stashed away. That war chest dropped by around £7m in 2009-10, though, as the firm opened new offices and propped up pay.
“We had a cash pile reserved for rainy days and for two years it was p*ssing with rain,” said Metcalfe.
Like many firms, Wragge & Co was forced to take a bath on its turnover in 2008-09. The year before the firm raked in £127.2m, its biggest-ever haul, but then the downturn hit and revenue dropped to £105.8m. The following year it fell even further to £98.3m.
According to Wragges, much of this drop was down to the firm maintaining underperforming practices throughout the recession (although the firm did make around 30 fee-earners redundant in 2008 and then around 30 more, along with some support staff, in 2009). In particular, the firm had a lot of its eggs in the property basket, which accounted for almost 30 per cent of firm-wide turnover.
The two-year dip aside, Wragges has been growing steadily since 2002-03 (the first year for which LLP accounts are available), when revenue hit £79.7m.
In 2010-11 - the most recent financial year - the firm’s turnover rebounded by 15 per cent to £113m. Around half of that growth came from Wragges’ new office in Paris, which opened in 2010.
Half-year figures for 2011-12 also show signs of promise, up by 5 per cent on the same period the previous year.
Operating profit has followed a similar trajectory. After the 2007-08 high point of £49m, it fell to £30.3m in 2009-10. Profit would have rebounded back to a healthy £38.6m in 2010-11, but exceptional costs of £10.5m related to the firm’s new office in Birmingham, as well as other rents, dragged the LLP figures down. Wragges is paying around £3.2m a year on its current offices in Colmore Row, and it is expected the new offices will be more expensive.
Tellingly, Wragges’ highest paid partner took home £734,000 in 2010-11, up from £444,000 the year before. The latter figure was the result of the firm’s efforts to reward partners that put in a star turn.
As with turnover and profit, the number of staff at Wragges peaked in 2007-08 at 1,119, a figure that includes legal and support staff. In 2010-11 there were 958 staff.
The average partner number, however, is one of the few metrics measured by The Lawyer that did not peak in 2007-08. In 2010-11 there were 119 partners at the firm on average, more than there has ever been. That said, numbers have not fluctuated much, with 111 partners in 2007-08.
Since 2002 the firm has also expanded internationally into Paris, Munich, Guangzhou, Abu Dhabi and Dubai. It also has an office in Brussels that is not staffed permanently.
As a result of Wragges’ expansion, management claims that international mandates now make up 30 per cent of the firm’s workload.
A few years ago Wragge & Co was advised that if it was going to open in Guangzhou it would need an office in Hong Kong too. The firm set up a one-partner IP practice in Hong Kong in 2008 in conjunction with German ally Graf von Westphalen. The office cost Wragges £317,000 in the first year and £628,000 in 2009. But Wragges soon discovered that a Hong Kong presence was not the be-all and end-all and that running a small office in one of the world’s most competitive jurisdictions was not efficient.
The office ceased to trade on 30 April 2009.
Top three stats
The highest paid partner in 2010-11 received £734,000, a 65 per cent increase on the the previous year, when the top earner got £444,000.
The highest ever earner since 2002) was in 2007-08, earning £770,000.
The firm incurred exceptional costs of £10.6m in 2010-11 relating to its new headquarters in Birmingham, as well as other properties in the city
Wragge & Co’s managing partner Ian Metcalfe has been in the role for almost seven years. Senior partner Quentin Poole has been in his position for 10 years, since moving over from the managing partner role in 2002